The daily business briefing: April 4, 2018
U.S. and China hit each other with more tariffs, Spotify makes a successful debut on the NYSE, and more
Stock futures plummet as U.S., China hit each other with more tariffs
The Trump administration on Tuesday announced that it would impose 25 percent tariffs on Chinese industrial technology and other goods, accounting for about $50 billion in annual imports, unless China promptly makes trade concessions. China responded Wednesday by announcing plans to hit $50 billion worth of U.S. products, including soybeans, with tariffs of up to 25 percent, escalating trade tensions between the world's two biggest economies and sending U.S. stock futures plunging early Wednesday. The list of targeted items unveiled by the U.S. Trade Representative's office includes 1,300 products, including chemicals, motorcycles, and dental devices. The U.S. said the proposed tariffs are a response to China's policies forcing American companies to transfer their technology to Chinese partners before doing business in the country.
Spotify stock price fluctuates in successful NYSE debut
Spotify's stock made a successful debut on Tuesday and closed at $149.60 in its first day of trading on Wall Street, down from an opening price of $165.90 but 13 percent higher than the $132 per share reference price set by the New York Stock Exchange. The streaming music service's first day closing price gave it a valuation of $26.6 billion. Analysts had predicted early volatility for the stock, because the company bypassed a traditional initial public offering of stock. Instead, it offered no new shares, simply letting employees and investors sell existing shares. The move left new buyers to haggle over what the stock's price would be, and meant that Spotify itself raised no money in the IPO.
Tesla's Model 3 becomes top-selling U.S. electric car despite setbacks
Tesla released production numbers Tuesday showing that its new Model 3 has become the nation's best-selling electric car despite the company's nagging troubles ramping up production of the sedan, its first mass-market vehicle. Tesla said it delivered 8,180 Model 3s in the first quarter of 2018, beating Toyota's 6,468 deliveries of its Prius Prime plug-in hybrid, and General Motors' 4,375 Chevy Bolts. Tesla fell short of its goal of 2,500 Model 3s per week by the end of the quarter, but Wall Street analysts were moderately pleased with the latest figures. "Good enough," wrote Robert W. Baird & Co. analyst Ben Kallo, while KeyBanc Capital Markets Inc.'s Brad Erickson called the data "better than feared."
CBS offers to buy Viacom
CBS has offered to buy cable TV and film giant Viacom, CNN reported Tuesday, citing a person familiar with the matter. A deal would reunite the companies more than a decade after they split. CBS reportedly offered Viacom less than its $12.5 billion market value and called for having CBS CEO and Chairman Leslie Moonves run the combined company. The family of media mogul Sumner Redstone controls about 80 percent of both CBS and Viacom, which owns cable channels MTV and Nickelodeon, and movie studio Paramount. The family has discussed bringing the companies back together for years, although an attempt to do so failed in 2016. Jason Schloetzer, a Georgetown University business professor, said the new push was likely an attempt to "keep up with Disney."
Ad giant WPP looks into allegations against CEO Martin Sorrell
Advertising giant WPP's board is investigating allegations of misconduct and misuse of company assets by longtime Chief Executive Martin Sorrell, The Wall Street Journal reported Tuesday, citing people familiar with the matter. The company released a statement confirming the inquiry after the news was leaked to the Journal. Sorrell issued a denial. "Obviously, I shall play no part in the management of the investigation under way," Sorrell said in his statement. Sorrell founded the London-based WPP three decades ago and built it into the owner of blue-chip agencies Ogilvy & Mather, J. Walter Thompson, Y&R, and Grey, but the company has lost a third of its market value in the last 12 months as reduced spending by major clients has challenged the industry.