The Week's Top Stories is a guided tour through the biggest market stories of the week, from winning stocks to brutal dips to the facts and forecasts generating buzz on Wall Street.
BED BATH & BEYOND DEFAULTS
Bed Bath & Beyond is keeping investors on the edge of their seats. Roughly a week after admitting that bankruptcy was a real possibility, the long-struggling home goods retailer has defaulted on sizable lines of credit with JPMorgan and lender Sixth Street. Now the company is trying to figure out what's next. In an SEC filing, it said bankruptcy is one option. It's also seeking an acquisition and negotiating with landlords to lower its rent burden. "These measures may not be successful," the firm admitted. Shares of Bed Bath & Beyond shot up around 5 percent following the news but are down more than 20 percent for the week.
HIRING AND FIRING
There was another round of high-profile layoffs this week and not just from Big Tech. Spotify is cutting 6 percent of its global workforce and overhauling its corporate structure to make up for growing too fast earlier in the pandemic. IBM is cutting 3,900 employees or 1.5 percent of its workforce in anticipation of declining cash flow in 2023, and toy manufacturer Hasbro rounded out the week with plans to terminate 1,000 employees or about 15 percent of its workforce. On the upside, Chipotle announced plans to hire 15,000 workers ahead of "burrito season," the period between March and May that culminates in Cinco de Mayo. The Commerce Department also released the latest gross domestic product numbers, and the U.S. economy grew 2.9 percent in the fourth quarter of 2022, marking a deceleration but still a healthy level of growth.
ACTIVIST INVESTOR VS. SALESFORCE
Activist investors have piled into Salesforce, sparking speculation about the future of the software giant. Both Elliott Investment Management and Inclusive Capital bought large stakes in the company. Right now, the new investors are trying to put a positive spin on the development.
"We look forward to working constructively with Salesforce to realize the value befitting a company of its stature," tweeted Jesse Cohn, managing partner at Elliott. However, these kinds of relationships can often be contentious. In addition, the company is in a sensitive position. It cut about 10 percent of its workforce earlier this month after admitting to over hiring.
WINNERS AND LOSERS
Earnings season is well underway, so there were several companies that got either a boost or a ding this week based on the results. On Friday, shares of Intel sank after a report showing declining revenues, profits, and outlook projections. Microsoft shares, meanwhile, popped around 3 percent for a mix of reasons, with one being excitement around Buzzfeed's announcement that it plans to use artificial intelligence for content. Just last week, the software giant announced plans to cut staff and double down on its investments in AI. Shares of Tesla also shot up at the end of the week more than 10 percent as investors continued to process its strong earnings.