Twitter’s lawsuit to force Elon Musk to complete his $44 billion buyout bid is set to go to trial on October 17, a US judge has ordered, in a case with major stakes for both sides.
The trial is due to open in a court in the eastern state of Delaware and is set to last five days to decide whether Musk can walk away from the deal.
The Tesla boss wooed Twitter’s board with a $54.20 per-share offer, but then in July announced he was “terminating” their agreement on accusations the firm misled him regarding its tally of fake and spam accounts.
Twitter has countered by saying Musk already agreed to the deal and can’t back out now.
An order from the judge handling the case, Kathaleen McCormick, lays out an expedited schedule to resolve a fight that has left Twitter in limbo.
She reminds both sides that they “shall cooperate in good faith” on matters like handing over information to each other, a key topic that can result in delays.
Billions of dollars are at stake, but so is the future of Twitter, which Musk has said should allow any legal speech — an absolutist position that has sparked fears the network could be used to incite violence.
Twitter blamed disappointing results last week on “headwinds,” including the uncertainty imposed on the company by Musk’s chaotic buyout bid.
What’s with the slowdown in Canada’s tech ecosystems this year?￼
Canadian venture funding cooled in Q2 2022, but Alberta is still seeing record-level funding.
As BetaKit reported at the end of 2021, that year was “undoubtedly a landmark year” for Canada’s tech scene. The sector broke an all-time venture capital funding record previously set in 2019, with firms raising a staggering $11.8 billion in Q3 alone.
So what’s with the slowdown this year?
BetaKit is reporting that the BC, Waterloo Region, and Toronto tech sectors are all showing signs of cooling in Q2, as tracked by briefed.in.
On the west coast, BC’s venture funding and deal volume dropped to a six-quarter low, with startups raising $204.3 million collectively — a decrease of 62% compared to Q1 2022. Toronto saw a 69% drop from Q1 — a fairly dramatic drop after the banner year that was 2021.
Waterloo is a bit of a different story. While the region did see its lowest quarter for deal volume in three years, there was still an increase in investment over Q1. That said, most of this (96% according to BetaKit) was from one $537.7 million Series G extension closed by Faire, a retail startup.
The one Canadian ecosystem that’s still flying high? Alberta. In Q2, companies raised $268.6 million through 12 deals – a 31% increase quarter-over-quarter, BetaKit reports. It remains to be seen if they’ll be hit with the same cooling as other ecosystems.
Speaking to BetaKit, Golden Ventures partner Ameet Shah explained “if 2021 was the party, then 2022 stands to be a sobering experience for founders, employees, and investors alike.”
What contributed to this slowdown? Unsurprisingly, stock market slumps, the cryptocurrency rollercoaster, inflation, and overseas conflict all play factors in the current volatility. After the booming decade of the 2010s, this year seems to be an overall bust for the global tech sector, including Silicon Valley, with repeated announcements of layoffs.
According to global labor trends aggregator Layoffs.fyi, 140,388 workers lost tech jobs since the start of the COVID-19 pandemic, as reported by BNN Bloomberg.
The Canadian tech sector is also facing layoffs — including the news that Shopify is letting go of approximately 10% of its workforce. Back in June, Wealthsimple laid off 13% of its staff.
As Deena Shakir, a partner at Silicon Valley-based VC firm Lux Capital explained to CBC News at June’s Collision Conference, “right now everyone who is innovating and/or investing in tech or in startups is trying to understand what exactly is happening in this moment.”
“We’re the topic of conversation at every partner meeting, and every lunch and coffee.”
DX Journal covers the impact of digital transformation (DX) initiatives worldwide across multiple industries.
Sony trims annual profit forecast after Bungie purchase
Sony trimmed its annual net profit forecast on Friday, partly due to acquisition expenses including the purchase of US game studio Bungie, creator of hits like “Halo” and “Destiny”.
The PlayStation maker announced in February it would buy Bungie for $3.6 billion, weeks after rival Microsoft unveiled a landmark pact to acquire “Call of Duty” maker Activision Blizzard.
Microsoft says its massive merger, valued at around $69 billion, will make it the third-largest gaming company by revenue, behind Tencent and Sony — marking a major shift in the booming gaming world.
Sony Group now predicts net profit for 2022-23 will total 800 billion yen ($6 billion), down from the 830 billion yen previously forecast.
It said the expected increase in acquisition expenses was “mainly due to the acquisition of Bungie, Inc. being completed earlier than the assumed timing”.
Lower sales of games by non-house developers will likely dent its overall sales figures this financial year, it said, but this would be “partially offset” by a weaker yen.
Exchange rates also boosted the conglomerate’s movie segment, chief financial officer Hiroki Totoki told reporters.
Customer traffic at US theatres has returned to pre-pandemic levels in some weeks, and Sony Pictures is hoping to score another box-office win after the runaway success of “Spider-Man: No Way Home”.
“We have high hopes for ‘Bullet Train’ featuring Brad Pitt,” Totoki said.
The movie division expects higher sales for anime streaming, “including the impact of the acquisition of Crunchyroll”, the world’s largest online library of Japanese animation.
– PlayStation 5 sales steady –
In the April to June quarter, the Japanese conglomerate posted a three percent year-on-year rise in net profit to 218 billion yen, with sales up around two percent to 2.3 trillion yen.
Sony has faced challenges rolling out its PlayStation 5 console, which remains difficult to get hold of more than 18 months since its launch in November 2020, in part due to pandemic supply chain disruption and the global chip shortage.
Sony sold 11.5 million PS5s last year, and in May Totoki said the firm was adapting to try and weather ongoing supply chain issues, including Covid-19 lockdowns in China.
For the PS5, “the problem is more about supply than demand. The company is also facing problems transporting its products,” Hideki Yasuda, senior analyst at Toyo Securities, told AFP before the earnings release.
Meanwhile “the yen has turned lower in this quarter. This should be positive for the company,” he said, adding that a US economic slowdown could open up shipping spots, even though it poses risks overall for businesses like Sony.
In the first quarter of this financial year, Sony sold 2.4 million PS5 units, similar to the same period last year when it sold 2.3 million.
Sony also said last month it is launching a new brand that will offer PC gaming gear.
The gaming peripherals market of items used by players was valued at $3.88 billion globally in 2019 according to Grand View Research.
Asian markets rise as US data boosts hopes of slower Fed hikes
Asian stocks rose Friday after data showing another contraction in the US economy boosted hopes that the Federal Reserve will slow its pace of interest rate hikes.
After an extended period of pessimism on trading floors fuelled by soaring inflation and the central bank’s monetary tightening campaign, investors are beginning to speculate that the market may have reached its nadir.
The world’s top economy shrank 0.9 percent in April-June following a 1.6 percent retreat in the first quarter as it was buffeted by the four-decade spike in inflation and rising borrowing costs.
But the reading was taken as a sign of good news, as it could give the Fed room to take its foot off the pedal, with Treasury yields — considered a barometer of future interest rates — easing.
Officials are expected to continue lifting rates, but analysts estimate they will announce a 50-basis-point rise in September, compared with 75 at the past two meetings.
And analysts said the quick, sharp pace of increases would allow the bank to begin cutting sooner in 2023 while others said any recession would likely only be shallow and short.
The news saw all three main indexes on Wall Street rally more than one percent, with tech firms — which are susceptible to higher rates — leading the way.
The gains extended a rally Wednesday that came after Fed chief Jerome Powell hinted that the bank could start to take it easier in its tightening.
Most of Asia followed suit, with Tokyo, Sydney, Seoul, Singapore, Taipei, Jakarta and Wellington all up. However, Hong Kong dropped and Shanghai struggled.
The prospect of US rates not rising as fast as previously expected hit the dollar, which has soared in recent months against most other currencies.
The greenback dropped below 135 yen Thursday for the first time since July 6, having hit a 24-year high of 139.39 yen just two weeks ago.
A second successive contraction is widely considered a technical recession, though it is not officially considered so in the United States until identified as such by the National Bureau of Economic Research.
But while debate rages over that issue, the general consensus is that the economy is struggling.
“The more important point is that the economy has quickly lost steam in the face of four-decade high inflation, rapidly rising borrowing costs, and a general tightening in financial conditions,” Sal Guatieri, of BMO Capital Markets, wrote.
The retreat in the US economy comes as China also struggles, hit by painful Covid-induced lockdowns in major cities including Shanghai and Beijing that hammered all sectors and supply chains.
On Thursday, the country’s leadership offered a dour assessment of the world’s number two economy but offered no plans to stimulate growth, leaving traders disappointed.
– Key figures at around 0230 GMT –
Tokyo – Nikkei 225: UP 0.5 percent at 27,944.55 (break)
Hong Kong – Hang Seng Index: DOWN 1.4 percent at 20,343.08
Shanghai – Composite: DOWN 0.4 percent at 3,269.18
Dollar/yen: UP at 134.36 yen from 134.25 yen Thursday
Euro/dollar: DOWN at $1.0193 from $1.0197
Pound/dollar: DOWN at $1.2167 from $1.2177
Euro/pound: UP at 83.77 pence from 83.70 pence
West Texas Intermediate: DOWN 0.8 percent at $97.16 per barrel
Brent North Sea crude: UP 0.3 percent at $107.50 per barrel
New York – Dow: UP 1.0 percent at 32,529.63 (close)
London – FTSE 100: FLAT at 7,345.25 (close)
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