The daily business briefing: August 8, 2023

1. Paramount reaches deal to sell Simon & Schuster to KKR

Paramount on Monday announced a deal to sell Simon & Schuster to the private-equity firm KKR for $1.6 billion. The sale will give KKR one of the biggest U.S. publishing houses, with big-name authors including Stephen King and Bob Woodward, increasing the presence of financial firms in the publishing industry. Jon Karp, chief executive of Simon & Schuster, told The New York Times that he was "thrilled" with the deal. "They plan to invest in us and make us even greater than we already are," he said. "What more could a publishing company want?" Karp will remain the company's CEO. An attempt to sell Simon & Schuster to rival publisher Penguin Random House was disrupted by government antitrust concerns.

The New York Times

2. Tesla shares dip after CFO steps down

Tesla shares closed down nearly 1% on Monday after the electric-vehicle maker announced that Chief Financial Officer Zach Kirkhorn had stepped down as the company prepares to launch its Cybertruck electric pickup. Kirkhorn had been in the position for more than four years, working behind the scenes to execute the plans of the EV maker's billionaire CEO, Elon Musk. Tesla had a market value of $50 billion when Kirkhorn took the job, and it's now worth more than $780 billion. Kirkhorn's departure fueled questions about the company's succession plans, because some board members had suggested him as a potential eventual successor to Musk, The Wall Street Journal reported. Tesla said Chief Accounting Officer Vaibhav Taneja was replacing Kirkhorn.

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Axios The Wall Street Journal

3. Moody's downgrades 10 U.S. banks

Moody's on Monday cut credit ratings for 10 small to mid-sized banks. The ratings agency also said it might downgrade some of the biggest U.S. lenders, including U.S. Bancorp, Bank of New York Mellon Corp., State Street Corp. and Truist Financial Corp., under a continuing review of the strength of the industry. Moody's said in a series of notes that its review of the banks was prompted by higher funding costs, potential regulatory capital weaknesses, and rising risks tied to commercial real estate loans amid weakening demand for office space, according to Bloomberg. "Collectively, these three developments have lowered the credit profile of a number of U.S. banks, though not all banks equally," Moody's wrote.

Bloomberg Reuters

4. Stock futures fall after Monday's surge

U.S. stock futures fell early Tuesday after Monday's strong gains. Futures tied to the Dow Jones Industrial Average, the S&P 500, and the Nasdaq were all down 0.5% at 6:30 a.m. ET. The Dow rose 1.2% on Monday, and the S&P 500 and the tech-heavy Nasdaq gained 0.9% and 0.6%, respectively, as blue-chip stocks gained. Berkshire Hathaway led the way, closing at a record high after swinging to a second-quarter profit. Stocks have benefited from a strong earnings season. About 85% of the S&P stocks have reported second-quarter earnings, and almost 80% of them have exceeded analysts' expectations, according to FactSet. Bank shares came under pressure on Tuesday after Moody's downgraded 10 small and mid-sized lenders. Investors are waiting for July's consumer price index report, which comes out Thursday.

CNBC The Wall Street Journal

5. Zoom tells workers to return to the office

The post-pandemic return to the office has reached a milestone, with video communications company Zoom telling employees it wants those who live near an office to work in-person at least two days per week. Zoom, which became a household name during the pandemic as companies used its video-conferencing service to let employees work from home or while traveling, said the mandate would apply to anyone living within 50 miles of an office, according to an emailed statement first reported by Business Insider. "We believe that a structured hybrid approach" works best for the company, Zoom said. "As a company, we are in a better position to use our own technologies, continue to innovate, and support our global customers."

The Washington Post Business Insider