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.
Crypto-bulls and crypto-skeptics agree: This week was one of the most brutal in the industry's history. The sector's market cap dropped nearly 30 percent or around $500 billion, according to one estimate, and Bitcoin briefly crashed below $27,000 per coin. The plunge was fueled by the collapse of algorithmic stablecoin TerraUSD, which was supposed to maintain a one-to-one peg with the U.S. dollar. The peg broke amid a massive sell-off that completely undermined the stablecoin's complicated and opaque algorithm-based peg. Bitcoin recovered some of its losses Friday, while fellow stablecoin Tether managed to hold its peg, but the crypto market might not be out of the woods yet.
MUSK'S TWITTER TANGLE
If you thought it was a settled fact that Tesla CEO Elon Musk had purchased Twitter, think again. With his usual dramatic flair, the billionaire is keeping observers on the edge of their seats. Musk on Friday said he was putting the $44 billion deal “temporarily on hold” until he can determine the exact number of spam/fake accounts on the platform. But he quickly tempered the announcement with a tweet saying he is “still committed to acquisition,” so it's still anyone's guess if the "hold" presents a serious threat to the deal going through.
RIVIAN'S WILD RIDE
Meanwhile, Elon's EV rival Rivian had its own wild week as major investors Ford and JP Morgan Chase sold off large chunks of their shares in the automaker. The stock dropped to a low of around $20, but in its Q1 earnings, Rivian wooed investors back with some positive guidance. Dan Ives at Wedbush called the company a "black eye" for the industry and a "train wreck" but noted it seemed to finally be on the "right track." As the week came to a close, Rivian and other EV automakers received a substantial bump as markets rallied to claw back some losses.
ROBINHOOD AND THE CRYPTO KING
Sam Bankman-Fried, CEO of crypto exchange FTX, has bought a 7.6 percent stake in Robinhood, the popular retail investing app. It's unclear what exactly Bankman-Fried plans to do with the stake (the SEC filing is pretty open-ended), but it's clear investors are happy about the match-up. The stock rallied 26 percent on the news.
Bankman bought the large stake, which is worth $648 million, despite reportedly losing nearly half of his net worth in 2022, due to huge losses in the crypto market.
AMC started the week normal enough. The movie theater chain reported a larger-than-expected bump in revenue due to the success of tentpole films such as The Batman and Spider-Man: No Way Home, even as the company continues to operate at a net loss. The report gave the stock a boost in after-hours trading, but shares continued to fall throughout the week. Then AMC got a dose of that meme-stock magic: Shares jumped as high as 7 percent on Thursday for no clear reason other than the fact that this happens sometimes to the retail-friendly stock. Fellow meme-stock GameStop, meanwhile, got an even bigger boost, rising as much as 30 percent and having traded halted for volatility, before sinking back into negative territory for the week.
No such magical intervention came to prop up Disney's stock price this week. Shares of the entertainment giant slipped Thursday despite Disney+ adding 7.9 million new subscribers in the quarter, and the company's parks, experiences, and products segment doubling its revenues to $6.7 billion from last year. Investors seemed to latch onto the fact that subscriber growth had actually slowed a bit compared to previous quarters, the overall streaming market is getting pretty crowded, and Disney has projected slowing growth for the coming quarter.
Elsewhere in the Magic Kingdom:
Elon Musk is backing an effort by Republican Senator Josh Hawley (R-Mo.) to limit Disney's copyright on Mickey Mouse to 56 years, which would effectively hand the iconic character over to the public sphere.
If you haven’t nabbed a PlayStation 5 or Nintendo Switch yet, you might have a hard time getting one in the next few months. Both Sony and Nintendo this week revised downward their console forecasts for the coming quarter, citing supply constraints. Specifically, executives from the companies told investors that a shortage of semiconductors was behind the projected drop in output. Still, it wasn’t all bad for the console makers. Sony is predicting a 56 percent year-over-year increase in Playstation 5 sales, and Nintendo announced a 10-for-1 stock split aimed at making itself more appealing to retail investors.