From Wall Street to Silicon Valley, these are the top stories that moved markets and had investors, business leaders, and entrepreneurs talking this week on Cheddar.
Coronavirus Cancels Convention
An unexpected victim of the coronavirus outbreak was the Mobile World Congress in Barcelona, an annual trade show focused on mobile technology and cell phones. Organizers canceled the trade show after a long list of companies, including Amazon, Intel, ZTE, and LG all said they would pull out of the event. Here's a broader look: the number of coronavirus disease cases, now called COVID-19, crept closer to 70,000 this week, with China reporting spikes in cases on Thursday and Friday, in part because of a change in how cases are diagnosed and reported. China's status as the world's top tech manufacturer could have a ripple effect on industries from electronics to autos ー with experts noting disruptions could resound all the way into the 2020 holiday season.
Tesla Tries for Two Billion
Tesla says it will sell common stock at $767 a share ー a secondary offering designed to raise more than $2 billion for the company. The Thursday announcement sent its current stock price plunging to a five-day low of $741.84 a share ー although it's worth noting Tesla's quick recovery that same day puts its new common stock price at a slight discount to the Thursday close. Tesla has recently been enjoying a rally, with shares up more than 83 percent this year and the stock seeing a boost of more than 5 percent after the announcement.
Fed Chair...Shelton?
Here's one for anyone hoping for an apolitical Fed: President Trump's nominee for the Fed's Board of Governors, Judy Shelton, testified before the Senate Banking Committee on Thursday. The economist and former Trump campaign advisor remains a controversial figure for advocating a return to the gold standard, her opposition to deposit insurance ー and concerns that her nomination would further politicize the central bank. It's clear President Trump is no fan of his last pick for Fed Chair, Jerome Powell, and if confirmed, Shelton could be the front-runner to take over Powell's seat. Lest we forget what's at stake here: The Fed is currently considered one of the few truly apolitical institutions, and beyond maximizing employment, stabilizing prices, and moderating long-term interest rates, it also acts as a lender of last resort to banks.
Return of the JEDI
Just when you're on the verge of forgetting, drama surrounding the Joint Enterprise Defense Infrastructure (JEDI) returned with a vengeance. Here's the latest: The Court of Federal Claims has ordered Microsoft to stop work on the government contract it was awarded by the Department of Defense ー this after intense legal maneuvers from Amazon. Amazon, if you recall, was previously considered the front-runner for the contract, and says the decision to reject its offer was influenced by President Trump because of his animosity both to Jeff Bezos and the paper he owns, The Washington Post. You can't really blame Amazon for fighting the decision tooth-and-nail with a lucrative government contract worth $10 billion at stake. The JEDI project is meant to bring the military into the cloud.
Holy Matri-Phone-y
And turning now to the latest in corporate wedding news: On Tuesday, the merger between wireless network giants Sprint and T-Mobile finally won approval from Judge Victor Marrero of the United States District Court in Manhattan. It's a landmark merger worth $26 billion ー but one that came under intense criticism over antitrust concerns. T-Mobile and Sprint both say the whole point is to offer better, faster service, but 5G technology is still a while off and the two companies currently operate on incompatible types of network technology. Worse, Sprint-T-Mobile's promise not to raise prices for consumers (as part of the deal) expires after only three years. But let's not break out the wedding bands just yet ーthe deal still needs approval by the California Public Utilities Commission before it can truly close.
