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EQT in Talks to Acquire Radius Global Infrastructure

30 Nov 2022 1 Dec 2022

(Bloomberg) — EQT AB is in talks to acquire Radius Global Infrastructure Inc., which leases cell sites to wireless-tower companies and mobile-network operators, according to people with knowledge of the matter.

Radius’ shares rose as much as 24% on the news.

The Stockholm-based investment firm is speaking to banks about financing, said the people, who requested anonymity discussing private information. No deal has been reached and talks could still collapse, the people said.

Radius shares rose 20% to $12.09 at 11:44 a.m. in New York trading Wednesday, giving the company a market value of about $1.3 billion.

The company, led by Chief Executive Officer Bill Berkman, has been exploring strategic options including a sale since at least May, Bloomberg News reported.

Representatives for EQT and Radius declined to comment.

A deal for Radius would add to EQT’s digital-infrastructure portfolio, which includes Zayo, GlobalConnect and EdgeConneX. This month, the firm emerged as a front-runner to acquire a stake in French telecom tower owner TDF.

Read more: EQT Looks to Digital for Next $20 Billion Buy

(Updates with stock move starting in the third paragraph)

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EU Targets Big Plastic With Rules to Cut Packaging Waste

30 Nov 2022 1 Dec 2022

(Bloomberg) — The European Union is targeting coffee pods, hotel toiletries and throwaway water bottles with a set of proposals meaning to save space at landfills and reduce carbon-dioxide emissions.

The measures released Wednesday by the European Commission seek to decrease packaging waste 5% from 2018 levels by the end of this decade and 15% by the end of next. All packaging products would have to be recyclable, and items such as teabags and apple stickers would have to be compostable.

“If we don’t change current trends, the volume of plastic waste could increase by 46% by 2030,” said Virginijus Sinkevicius, EU environment commissioner.

Five percent may seem small, but the amount of waste — and corresponding emissions — is surging as e-commerce becomes more prevalent and companies search for innovative ways to sell their products. The effort could have knock-on effects globally, given the EU is the largest single market.

“It’s world-leading,” said Piotr Barczak, senior policy officer for circular economy and waste at the European Environmental Bureau, a coalition of citizens’ organizations. “The fastest-increasing stream of waste is packaging waste.”

The rules would have ramifications for industries ranging from food production to consumer electronics to chemical manufacturing. In the EU, about 40% of plastic and half of paper is used in packaging, and the design often makes reuse or recycling difficult.

Certain sectors — such as the beer industry — will face targets for reusing packaging, according to the regulations. That could lead to bottle shapes being more uniform.

Companies from Nestle SA to Carlsberg AS broadly welcomed the proposals and said that they were already undertaking efforts to reduce waste. Brewers of Europe, a trade body for the beer industry, said that they wanted to see proportionate regulation and one that isn’t discriminatory to a particular sector.

The proposals likely will face some opposition from the packaging industry and its customers, who may have to pay more to set up recycling systems or find alternative materials.

The European Organisation for Packaging and the Environment said any mandates must include incentives for investing in the required infrastructure.

Under the measures, countries would have to set up systems for recycling bottles and cans in which consumers pay extra for the item upfront and then get that money back when it’s returned. The goal is for a 90% collection rate. If states can prove they’ve hit that goal through other means, they could be exempted from the new measures.

(Adds company responses in eighth paragraph.)

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Meta Scales Back NYC Hudson Yards Offices in Cost-Cutting Pivot

30 Nov 2022 30 Nov 2022

(Bloomberg) — Facebook parent Meta Platforms Inc. is giving up some offices at Manhattan’s Hudson Yards as the company seeks to slash expenses and cull its workforce.

Meta will return its space at 30 and 55 Hudson Yards to landlord Related Cos., according to people with knowledge of the plans, who asked not to be named because the matter is private. Meta, which leases more than 250,000 square feet (23,000 square meters) across the two towers, has declined the option to renew its lease, which runs through 2024, the people said.

The social media giant in 2019 agreed to rent more than 1.5 million square feet spread among three towers at the development on Manhattan’s far west side. Most of the space is at the third building, 50 Hudson Yards. Meta is subleasing a small amount of space at that tower, according to spokesperson Tracy Clayton.

Bloomberg reported in July that the company halted plans to further build out its offices at 50 Hudson Yards while it evaluates its real estate in New York, which includes about 730,000 square feet at the redeveloped Farley Building across from Pennsylvania Station.

“We remain firmly committed to New York City as evidenced by the opening of the Farley Building, further anchoring our local footprint,” Clayton said.

A representative for Related couldn’t immediately comment.

Meta is scaling back its real estate as Chief Executive Officer Mark Zuckerberg embarks on a wide reorganization of the company, cutting thousands of jobs while pausing hiring. On its third-quarter earnings call, Meta said it expects to take a roughly $2 billion hit related to consolidating its offices and exiting space.

Large tech companies have driven office leasing in New York during the pandemic, even as they allowed flexible, remote-working options. Some firms have since pulled back in the wake of broad stock-market declines and growing fears about the US economy heading into a recession.

Earlier this year, Meta backed out of a deal to add 300,000 square feet to its space at 770 Broadway, a building near Astor Place. The firm also is shutting down its offices at 225 Park Ave. South.

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Binance Hires Accountant Mazars to Reassure Clients of Reserves

30 Nov 2022 1 Dec 2022

(Bloomberg) — Digital-asset exchange Binance Holdings Ltd. has appointed accounting giant Mazars to verify its token reserves, as the meltdown of its former rival FTX triggered increased demand for more transparency from cryptocurrency exchanges.

A Binance spokesperson confirmed the appointment, which was first reported by The Wall Street Journal, adding that “it is working with Mazars to conduct a third party financial verification as part of the Proof of Reserves updates.”

“Mazars is reviewing all information that we have shared publicly to date on Proof of Reserves (BTC) and will also be verifying future updates and tokens,” the spokesperson said in an emailed statement to Bloomberg News. “The first verification update for BTC will be completed this week.”

The collapse of Sam Bankman-Fried’s FTX empire has investors seeking more transparency from the usually opaque crypto exchanges. Earlier this month, Binance disclosed its holdings of major tokens and said more data will be shared later in a “full audited report.” The move comes as other exchanges also vowed to provide more detailed disclosures to clients on the tokens they hold.

Mazars is a global accounting firm headquartered in Paris, France. Its US division, Mazars USA LLP, worked for former US President Donald Trump’s company. A representative from Mazars did not immediately respond to a request to comment.

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From Amazon, Meta, Twitter: Here Are the US Tech Companies Cutting Jobs

30 Nov 2022 1 Dec 2022

(Bloomberg) — Tech companies are trimming staff and slowing hiring as they face higher interest rates and sluggish consumer spending in the US and a strong dollar abroad.

The tech industry shed 9,587 jobs in October, the highest monthly total since November 2020, according to Challenger, Gray & Christmas Inc., a consulting firm that tallies job cuts announced or confirmed by companies across telecom, electronics, hardware manufacturing and software development.

In recent earnings reports, Alphabet Inc., Amazon.com Inc., Meta Platforms Inc., Microsoft Corp. and others fell short of projections, sending shares plunging and shaving hundreds of billions of dollars from their market valuations. Meta, for instance, has lost more than 67% of its value so far this year.

Read More: It’s White-Collar Jobs That Are at Risk in the Next Recession

Here’s a running list of who’s cutting jobs and pulling back on hiring.

Amazon

The e-commerce titan plans to cut about 10,000 jobs. The layoffs will likely target Amazon’s devices group, responsible for the Echo smart speakers and Alexa digital assistant, as well as the retail divisions and human resources, Bloomberg News reported.

In November, Amazon halted “new incremental” hiring across its corporate workforce.

Apple

The iPhone maker has paused hiring for many jobs outside of research and development, an escalation of its plan to reduce budgets heading into next year, according to people with knowledge of the matter. The break generally doesn’t apply to teams working on future devices and long-term initiatives, but it affects some corporate functions and standard hardware and software engineering roles.

Chime

The digital-banking startup Chime Financial Inc. is cutting 12% of its staff, or 160 people. A spokesperson said the company remains well-capitalized and the move will position it for “sustained success.”

Cisco

Cisco Systems is beginning a restructuring plan that will affect about 5% of employees. The company says it will incur pretax charges of about $600 million for severance, termination and other costs. The employees will be given a chance to move to other jobs within the company, Chief Financial Officer Scott Herren said in an interview.

“This is not about reducing our workforce — in fact we’ll have roughly the same number of employees at the end of this fiscal year as we had when we started,” Herren said. Cisco had more than 83,000 employees as of July 30.

Dapper Labs

Dapper Labs Inc. founder and Chief Executive Officer Roham Gharegozlou said in a letter to employees that the company had laid off 22% of its staff. He cited macroeconomic conditions and operational challenges stemming from the company’s rapid growth. Dapper Labs created the NBA Top Shot marketplace for nonfungible tokens, a digital asset class that has seen a steep drop in demand since the crypto market downturn.

Digital Currency Group

Cryptocurrency conglomerate Digital Currency Group embarked on a restructuring last month that saw about 10 employees exit the company. As part of the shake-up, Mark Murphy was promoted to president from chief operating officer.

DoorDash

DoorDash Inc. is cutting about 1,250 jobs, acknowledging that its rapid expansion during the pandemic has led to mounting losses. The cuts will affect about 6% of the company’s workforce, a mix of US and non-US based staff, according to reporting by Bloomberg.

“While our business continues to grow fast, given how quickly we hired, our operating expenses — if left unabated — would continue to outgrow our revenue,” Chief Executive Officer Tony Xu wrote in a letter to staff.

Galaxy Digital

Galaxy Digital Holdings Ltd., the crypto financial services firm founded by billionaire Michael Novogratz, is considering eliminating as much as 20% of its workforce. The plan may still be changed and the final number could be in a range of 15% to 20%, according to people familiar with the matter. Galaxy’s shares have plummeted more than 80% this year, part of a rout for cryptocurrencies.

HP Inc. will cut as many as 6,000 jobs over the next three years as declining demand for personal computers cuts into profits. In addition to reducing its workforce by about 10%, the company will reduce its real estate footprint.

Intel

Intel Corp. is cutting jobs and slowing spending on new plants in an effort to save $3 billion next year, the chipmaker said. The hope is to save as much as $10 billion by 2025, a plan that went over well with investors, who sent the shares up more than 10% on Oct. 28. Bloomberg News reported earlier that the headcount reduction could number in the thousands.

Lyft

Lyft Inc.’s cost-saving efforts include divesting its vehicle service business. It’s eliminating 13% of staff, or about 683 people. The company had already said it would freeze hiring in the US until at least next year. It’s now facing even stiffer headwinds.

“We are not immune to the realities of inflation and a slowing economy,” co-founders John Zimmer and Logan Green said in a memo. “We need 2023 to be a period where we can better execute without having to change plans in response to external events — and the tough reality is that today’s actions set us up to do that.”

Yellen Says She ‘Misspoke’ in Downplaying Musk-Twitter Probe

30 Nov 2022 1 Dec 2022

(Bloomberg) — Treasury Secretary Janet Yellen said Elon Musk’s purchase of Twitter Inc. would warrant a government review if deemed to raise national security concerns, walking back her previous comments that played down the need for scrutiny.

If there are risks in general, “it would be appropriate for Cfius to take a look,” she said Wednesday at a New York Times event in New York, referring to the Committee on Foreign Investment in the US, which she leads.

She added she previously “misspoke” on the matter, referring to an interview with CBS News earlier this month, when she said she saw “no basis” for a review.

Read more: Yellen Says She Sees ‘No Basis’ to Probe Musk’s Twitter Deal

“I’m not going to say specifically what we are looking at,” Yellen said Wednesday. “We don’t comment on what’s in progress.”

Her earlier comments raised eyebrows as they closely followed comments from President Joe Biden that Musk’s connections to foreign governments, particularly China and Saudi Arabia, warranted closer looks.

In the CBS interview, Yellen acknowledged she was “not sure precisely” what Biden had been referring to, but added “we have really no basis — to the best of my knowledge — to examine his finances of his company,” and “I’m not aware of concerns that would cause us to.”

Musk’s $44 billion takeover of Twitter is still facing US government scrutiny over national-security concerns that his foreign partners may be able to access user data, people familiar with the matter said after her CBS News interview.

Read more: Musk’s Twitter Deal Still in Focus for Data-Security Review

The potential for action by Cfius emerged amid mounting concerns over how Musk’s various business interests overlap with top US national security priorities. Musk’s Starlink satellite internet network, for instance, has been used in Ukraine to maintain communications during its fight against Russia, a service he briefly threatened to cut off last month.

Asked separately about Chinese-owned video app TikTok, which is already under government focus, Yellen said, “Well, that’s something that’s a case in progress,” and “I think there are legitimate national security concerns.”

The Biden administration is weighing a proposal to allow TikTok to continue to operate in the US under the ownership of Chinese parent ByteDance Ltd., an arrangement that would include routing US user traffic through servers maintained by Oracle Corp.

Read more: FBI’s Wray ‘Extremely Concerned’ About TikTok Data Issue

Yellen also addressed a slew of other topics from the collapse of crypto trading platform FTX, to China and the global economy.

Yellen called the FTX debacle “the Lehman moment within crypto,” referring to the collapse of investment-banking giant Lehman Brothers in 2008 that crippled global credit markets.
- “We have consistently urged regulatory gaps be closed,” Yellen said. “This experience with his firm, or set of firms, just couldn’t provide a better illustration. These are very risky assets, but the good piece of an explosion like we saw is it hasn’t spilled over to the banking sector.”
The Treasury chief said China’s zero-Covid policy that enforces strict lockdowns appears to be “threat to the progress we’ve made on human supply-chain difficulties.”
- “We can see that their economy is slowing, perhaps to the point where it will really negatively impact the entire global outlook,” she said of China.

(Updates with additional comments on FTX, China)

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FTX’s Blowup Reinvigorates Push for New US Crypto Legislation

30 Nov 2022 1 Dec 2022

(Bloomberg) — The head of the Senate Banking Committee urged Treasury Secretary Janet Yellen to work with lawmakers to craft crypto legislation that tackles risks exposed by FTX’s spectacular collapse.

“As we continue to learn more details, the failure of this crypto exchange brings to mind the litany of financial firm failures due to the combination of reckless risk taking and misconduct,” Sherrod Brown, an Ohio Democrat, said in a Wednesday letter. “Congress and the financial regulators must work to get all of this right.”

Brown asked Yellen to work with lawmakers on ways to ensure that crypto risks “do not spillover into traditional financial markets and institutions.” The FTX turmoil highlights many of the issues that regulators raised in a recent report on the asset class, he said.

Top US financial officials, including Yellen and the head of the Federal Reserve, said last month that the government has limited ability to regulate crypto assets that aren’t covered by securities laws. The dynamic means that investors in those markets lack robust investor-protection rules to prevent conflicts of interest and market manipulation. Congress should give regulators new powers, their report said.

On Wednesday, Brown also urged federal agencies to enforce the rules and laws that are already on the books. “Regulators can take on the significant noncompliance with current law among crypto asset firms and minimize, if not eliminate, the opportunities for regulatory arbitrage,” he said.

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FTX’s Japan Unit Drafts Plan to Return Client Funds

30 Nov 2022 1 Dec 2022

(Bloomberg) — The Japanese subsidiary of Sam Bankman-Fried’s failed crypto empire FTX has put together a draft plan for clients to withdraw funds, in what would be one of the rare cases of investors getting money back from the collapsed exchange.

The proposal, which has yet to be finalized, centers on using a platform called Liquid to facilitate the return of assets starting in January, according to people familiar with the matter.

Bankman-Fried’s sprawling tangle of FTX group companies slid into a chaotic bankruptcy on Nov. 11, potentially bilking more than a million creditors around the world and fomenting turmoil in the crypto sector. The fallen crypto exchange owes its 50 biggest unsecured creditors a total of $3.1 billion, according to court filings.

FTX Japan customer balances would be transferred to Liquid after a verification process so that users can withdraw their money, said the people, who asked not to be identified discussing a private matter. The plan would need approval from the country’s regulator. FTX bought the operator of the Liquid platform this year to boost its presence in Japan.

FTX’s Japan unit referred questions to the parent company, which didn’t respond to an emailed request for comment. An official from Japan’s regulatory office declined to comment.

FTX Japan K.K. currently holds about $94.5 million in crypto assets and $46 million in fiat currency in designated client accounts, according to a draft of the proposal seen by Bloomberg News.

The proposal in Japan is in contrast to other countries where it’s unclear how much investors will recover from the bankruptcy. There’s already tension between liquidators in the Bahamas, where the global FTX operation was based, and US bankruptcy proceedings under the firm’s new Chief Executive Officer John J. Ray III, a turnaround and restructuring expert. A major source of conflict has been the Bahamas regulator’s move to seize FTX’s digital assets.

Roadmap

In Japan, the Financial Services Agency is seeking a road map and timeline for the return of customer assets as soon as possible, according to the document.

Under the proposal, client withdrawals could begin as early as the week of Jan. 9, according to the draft. The plan consists of phases including: data acquisition, authentication and data transfer, balance confirmation, and distribution and withdrawal, the document shows.

Because FTX Japan is under the oversight of a US bankruptcy judge in Wilmington, Delaware, the proposal may require court approval before the money can be returned to customers.

–With assistance from Steven Church.

(Updates with US court proceedings at end)

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Yellen Says She ‘Misspoke’ in Downplaying a Musk-Twitter Review

30 Nov 2022 30 Nov 2022

If there are risks in general, “it would be appropriate for Cfius to take a look,” she said Wednesday at an event in New York hosted by the New York Times, referring to the Committee on Foreign Investment in the US, which she leads.

She added she previously “misspoke” on the matter, referring to an interview with CBS News earlier this month, when she said she saw “no basis” for a review.

Read more: Yellen Says She Sees ‘No Basis’ to Probe Musk’s Twitter Deal

“I’m not going to say specifically what we are looking at,” Yellen said Wednesday. “We don’t comment on what’s in progress.”

Read more: Musk’s Twitter Deal Still in Focus for Data-Security Review

Ask separately about Chinese-owned video app TikTok, which is already under government focus, Yellen said, “Well, that’s something that’s a case in progress,” and “I think there are legitimate national security concerns.”

Read more: FBI’s Wray ‘Extremely Concerned’ About TikTok Data Issue

(Updates with additional comments, context throughout.)

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Stocks Retreat in Countdown to Powell’s Speech: Markets Wrap

30 Nov 2022 30 Nov 2022

(Bloomberg) — Stocks dropped, with traders parsing economic data and awaiting Jerome Powell’s speech for clues on whether the Federal Reserve will slow the pace of rate hikes to prevent a hard landing.

Despite the losses in the equity market, the S&P 500 is still on track to notch its second straight monthly advance — the longest winning streak since August 2021. Bond yields rose, while the dollar fluctuated.

As the Fed Chair gets ready to take center stage at an event scheduled for 1:30 p.m. in Washington, analysts expect him to remind Americans that the central bank’s fight against inflation will run into 2023.

“We don’t expect an overly hawkish tone, but if we had to make a choice about a potential surprise from Powell’s comments today, we’d say that a more hawkish surprise is more likely than a dovish surprise,” said Matt Maley, chief market strategist at Miller Tabak.

That doesn’t mean the equity market would get “clobbered” as it did following Powell’s Jackson Hole speech in August, Maley added. “However, given what we see as the Fed’s real goals right now, a strong rally into the end of the year is less likely than a lot of people are thinking.”

Traders also waded through a slew of economic data on Thursday, with key gauges of US activity painting a mixed third-quarter picture. Job openings fell in October — a hopeful sign for the Fed as it seeks to curb demand.

Key events this week:

S&P Global PMIs, Thursday
US construction spending, consumer income, initial jobless claims, ISM Manufacturing, Thursday
BOJ’s Haruhiko Kuroda speaks, Thursday
US unemployment, nonfarm payrolls, Friday
ECB’s Christine Lagarde speaks, Friday

Key events this week:

S&P Global PMIs, Thursday
US construction spending, consumer income, initial jobless claims, ISM Manufacturing, Thursday
BOJ’s Haruhiko Kuroda speaks, Thursday
US unemployment, nonfarm payrolls, Friday
ECB’s Christine Lagarde speaks, Friday

Some of the main moves in markets:

Stocks

The S&P 500 fell 0.3% as of 10:19 a.m. New York time
The Nasdaq 100 rose 0.2%
The Dow Jones Industrial Average fell 0.6%
The Stoxx Europe 600 rose 0.5%
The MSCI World index rose 0.1%

Currencies

The Bloomberg Dollar Spot Index was little changed
The euro rose 0.2% to $1.0348
The British pound was little changed at $1.1948
The Japanese yen fell 0.8% to 139.75 per dollar

Cryptocurrencies

Bitcoin rose 2.2% to $16,828.4
Ether rose 3.7% to $1,264.3

Bonds

The yield on 10-year Treasuries advanced five basis points to 3.79%
Germany’s 10-year yield advanced four basis points to 1.96%
Britain’s 10-year yield advanced eight basis points to 3.18%

Commodities

West Texas Intermediate crude rose 2.8% to $80.38 a barrel
Gold futures were little changed

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Sujata Rao and John Viljoen.

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