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.
RALLY PETERS OUT
U.S. stocks faltered on the back end of the week, stalled by the ongoing will-they-or-won’t-they stimulus deadlock in Washington. Not helping matters: weekly unemployment claims that showed more than 850,000 Americans filed for jobless benefits in the week prior, a sign that whatever economic recovery has been ongoing has lost major steam as the pandemic accelerates across the country. Even still, the Dow, S&P, and Nasdaq all notched record highs in the past few days as investors looked forward to the prospect of a coronavirus vaccine. An approval from the FDA on the Pfizer-BioNTech shot appears imminent.
IPO GOES BOOM
First it was DoorDash. Then came Airbnb. Two absolutely massive IPOs capped off a record year for public offerings, with several more still on the way. DoorDash closed higher by 85 percent on its first day of trading, while Airbnb followed that up by closing higher by 112 percent in its debut. That kind of single-day price action is a sign that both companies could have raised much more money for their early investors and founders than they did before letting shares loose on the public markets, and has Wall Street analysts increasingly concerned that the red-hot IPO market for tech stocks is becoming eerily reminiscent of the 1999 dot-com euphoria. But both DoorDash and Airbnb were able to take advantage of the strangeness of 2020 to transform themselves. DoorDash was valued at around $15 billion just this past summer. Airbnb was valued similarly in the spring, when the conventional wisdom assumed the company would be a big loser in a prolonged pandemic (the opposite happened). After their IPOs, Doordash’s market cap rose to $66 billion and Airbnb’s hit $100 billion.
CLEARED FOR TAKEOFF
The Boeing 737 Max is back in the air. The troubled jetliner made its first commercial flight with paying customers this week — a short hop from Sãao Paulo to Porto Alegre, courtesy of Brazil’s Gol Airlines. Gol says it plans to have its fleet of 737 Max jets back in regular service by the end of the month, and other airlines are following suit. American is slowly reintroducing the Max to service over the coming weeks, and Southwest — one of its biggest customers — will follow in Q2 of 2021. The first flight came after Brazil’s aviation authority followed the FAA’s lead in lifting the grounding order for the planes that had been in effect since March 2019, following two deadly crashes that killed nearly 350 people.
IS FACEBOOK TOO BIG?
The U.S. government is asking the courts to force Facebook to sell off Instagram and WhatsApp. That’s the focal point of one of two landmark antitrust cases that were filed concurrently by the FTC and a group of state attorneys general this week against the social-media giant. Federal regulators are arguing that Facebook abused its market power by snatching up smaller competitors. Facebook argues that there’s plenty of competition in social media, and noted that the government didn’t raise any issues with either of those two acquisitions when they happened during the Obama administration. The suits will begin a long legal battle over whether Facebook is an illegal monopoly
The CEO of AT&T spent the week defending the extremely controversial decision by the company’s WarnerMedia unit to break the theatrical window and premiere of all their scheduled blockbusters on HBO Max the same day they hit theaters. John Stankey told an investor conference that the studio had to change its business model in 2021 because what the industry has been doing during the pandemic is just not working. The comments came after Tenet director Christopher Nolan slammed Warner, calling HBO Max “the worst streaming service,” amid reports that much of Hollywood felt blindsided and furious by the decision. Meanwhile, Disney clearly sees its future in streaming. The Mouse House announced a slew of new projects in the pipeline, including 10 Star Wars shows and a new Star Wars film to be directed by Patty Jenkins (the first woman to direct a movie in the Star Wars universe). The company is also working on 10 Marvel shows and 15 other movies, from a live-action Pinocchio starring Tom Hanks as Geppetto to another Sister Act installment with Whoopi Goldberg. Disney’s Pixar unit is also producing new Toy Story, Cars and Up spinoffs that will premiere directly on Disney+, which is approaching an astonishing 90 million subscribers after just one year. The monthly price for that service will go up to $8 in March.