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(Bloomberg) — ABB Ltd. expects proceeds of at least $750 million from selling shares in its profitable electric-car charging business it plans to list during the second quarter. 

The funds will be invested for further growth to expand the business amid high demand for fast and normal charging, Chief Executive Officer Bjoern Rosengren said Thursday. ABB plans to hire a leader from the tech industry who has “dealt with fast growing companies,” Rosengren said. 

Sales for battery-powered vehicles are taking off as consumers respond to generous incentives and more attractive models from a range of carmakers. EVs accounted for nearly a fifth of deliveries in Europe last year, including plug-in hybrids, driving concerns over availability of sufficient public charging points. 

The e-mobility business has so far seen “very strong growth,” Chief Financial Officer Timo Ihamuotila said on a call with analysts. “It’s actually a profitable business.”

The Swiss industrials company offers a range of chargers and related installing and maintenance services, used by operators like Ionity GmbH and Electrify America. 

Facing pressure from shareholders including Cevian Capital to increase profitability, Rosengren has been revamping ABB’s conglomerate structure. Late last year, the company finalized the sale of its Dodge mechanical power transmission unit for $2.9 billion, and a final decision on a spinoff of its turbocharging unit will be made toward the end of the first quarter, ABB said Thursday. 

“He’s done a really solid job executing on restructuring,” said Morningstar analyst Denise Molina. “If anyone in industrials are going to be able to overcome the inflationary pressure, it’ll be them.”

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(Bloomberg) —

Lithium-ion batteries and the electricity they store represent the lifeblood of modern electric vehicles, much like gasoline was for 20th-century cars. With China expected to continue dominating production of lithium-ion cells, the West is now hoping to win the race for a vastly improved successor.

European automakers spending billions of euros in pursuit of battery breakthroughs are increasingly focusing on solid-state cells, a technology the industry hopes will hasten EV adoption because it promises to be more powerful, safer and cheaper than the current standard.

Germany’s Mercedes-Benz last week signed a deal with ProLogium to develop solid-state batteries and invest a “high double-digit million euro” sum in the Taiwanese startup. Mercedes and Stellantis last year said they’re investing in Massachusetts-based battery maker Factorial Energy, and BMW has thrown its weight behind Colorado-based Solid Power, which went public by merging with a special purpose acquisition company late last year.

Volkswagen was Europe’s solid-state pioneer. In 2012 — years before it admitted to rigging diesel engines to cheat on emissions tests — VW invested in QuantumScape, a secretive Silicon Valley startup attempting to make cells promising to increase driving range by as much as 50% and reduce charging times to 15 minutes.

QuantumScape went public in 2020 in a SPAC deal and, in a sign of the investor frenzy that gripped the nascent sector, briefly surpassed the valuation of Ford without generating any meaningful revenue.

Batteries are the most expensive component of an EV, representing roughly 40% of a typical car’s cost, according to Bloomberg Intelligence. It’s also key to performance, so mastering the technology is crucial. It’s understandable Europe’s carmakers are chasing this next big thing. But the battery industry is renowned for its secrecy, rendering decisions on which horse to bet on all the more difficult.

Beyond holding tightly to proprietary materials and trade secrets that are key to beating rivals, startups also generally keep battery performance data private. That’s a potential headache for investors and has already sparked short-seller activity. Activist firm Scorpion Capital called QuantumScape a “scam” in a report released last April. While the battery maker’s CEO Jagdeep Singh said the paper was filled with “lies, misinformation and innuendo,” QuantumScape’s shares are down some 87% from their peak in late 2020.

To grasp the potential of solid-state batteries, it’s helpful to understand that all batteries have a standard configuration that hasn’t changed in more than two centuries.

The battery industry is eager to solve the problem of dendrite, the spiky structure formed by lithium ions as a cell charges. They can grow long enough to reach the other electrode and short-circuit the battery, potentially causing a fire. And when EVs are set ablaze, extinguishing them is terribly difficult. It took firefighters four hours and more than 30,000 gallons (113,560 liters) of water to douse a Tesla Model S after a fatal crash in Texas last year.

Solid-state batteries would do away with that problem by replacing the liquid electrolyte with something — you guessed it — solid. QuantumScape, for example, uses what it says is a dendrite-resistant ceramic. Moreover, solid-state cells open up opportunities to use different anodes and cathodes, potentially resulting in higher energy density. Producing them also can be simpler because several steps, including the electrolyte filling, are no longer needed.

Right now, it’s difficult to say who’s ahead. QuantumScape and Solid Power are both expanding production facilities to scale up manufacturing around the middle of the decade. South Korea’s SK Innovation plans to deliver solid-state batteries by 2025, potentially vaulting yet another Asian producer to the forefront. Tesla, the leader among carmakers when it comes to EV battery technology, has been notably absent from the solid-state race, instead pushing its 4680 cells that it expects to go into Model Ys this quarter.

BloombergNEF expects automakers to deploy solid-state cells first in higher-priced models.

“We don’t expect cost-competitive cells and mass-market adoption until supply chains and manufacturing technologies mature,” BloombergNEF analysts wrote in a recent report. “We expect this will occur closer to 2030.”

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(Bloomberg) — The record surge in U.S. auto prices — which helped drive inflation to a four-decade high — may finally be over, say two firms that sell cars online.

Used-car prices, which have risen at an annual rate above 50% at times during the pandemic, went into reverse last month, according to a new report from CoPilot, a car-buying app. They peaked in the two weeks after the Christmas holiday, and have since declined about 1.4%, the firm’s data show. 

Truecar, a digital marketplace that helps auto buyers connect with dealers, says there’s been a drop in new-car prices too. They fell 2% in January from December, while remaining about 16% higher than a year ago, according to its data. 

To be sure, some caution is required, because it’s not the first time there’s been an apparent peak. Used-car prices posted some monthly declines last summer, according to one widely-used measure — but then resumed their upward climb. 

The industry is still struggling with supply-chain disruptions. But some automakers say those problems may be easing. The semiconductor shortage is less acute in the current quarter than the last one, and should start to really diminish in the second half of this year, General Motors Co. Chief Executive Officer Mary Barra said on an earnings call this week.

The lack of chips held back production of new cars. That’s had a knock-on impact in the used-car markets, as buyers who couldn’t get the latest model looked for a fairly recent one instead — driving prices up. 

CarPilot says there’s been a bigger drop in prices for used cars that are three years old or less — making them a better substitute for new ones — as dealers have expanded their inventories. The decline in that category is 2.1% since the early-January peak, while tor four-to-seven year-old models it’s about 1%. 

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(Bloomberg) — Apple Inc. had its strongest quarter for iPhone sales in India yet, a sign the Cupertino, Calif.-based company is finally making progress in the world’s fastest-growing smartphone market. 

Sales increased to 2.3 million units in the fourth quarter, up 34% from a year earlier, according to numbers from the market research firm Counterpoint. China’s Xiaomi Corp. and South Korea’s Samsung Electronics Co. sold 9.3 million and 7.2 million smartphones for the quarter respectively, leading in terms of units. 

Apple appears to have pulled in more revenue than any of its rivals, however, because of the iPhone’s high price tag, according to Counterpoint’s calculations. The U.S. company took in an estimated $2.09 billion for the quarter, edging aside Samsung with revenue of about $2 billion.

“It’s a turning point for Apple in India,” said Neil Shah, the Mumbai-based partner and research head at Counterpoint Technology Market Research. “Indians were willing to lavish money on premium phones during the pandemic because everyone’s lives revolved around their devices and there was nothing else to spend on.” 

While Apple has become the most valuable company in the world on the popularity of its iPhone, it has struggled in the 1.3 billion-person India market. Pricey iPhones are far beyond the reach of many local consumers, a situation aggravated by stiff import tariffs Apple had to pay on devices made outside the country.

Apple Is Said to Lose Key Execs as Strategy in India Falters

In 2018, the company stumbled through multiple top-level executive departures in the country, sliding sales and irate retail partners who protested its online discount practices. Apple sold 1.8 million iPhones for the entire year, fewer than it sold in the most recent quarter. 

Since then however, the technology giant has made an about-face in strategy. It’s opened its own India online store, streamlined discounts and started local manufacturing of iPhones. It’s planning to open company-owned retail outlets in multiple cities in the coming quarters. 

Apple Names New India Chief as Troubles Pile Up in Key Market 

During the recent October to December period, India’s festival buying and gifting season, the phone maker priced its basic iPhone 12 model at less than 50,000 rupees ($668), offering cashback incentives and easy payment plans. 

Apple is still a tough sell in a country where per-capita income was under $2,000 in 2020, according to World Bank data. For the most recent quarter, the average iPhone selling price in the country was $908, while Samsung’s was $278 and Xiaomi’s was $172, according to Counterpoint.

Apple has resisted introducing a cheaper device just for the local market, a common strategy for foreign brands such as Netflix and Kellogg’s. While Apple’s market share has climbed, it remains in the single digits at just over 5% for the quarter. Indians purchased 44 million smartphones in the period. 

It has challenges beyond price in the market. Apple manufacturing partners, Foxconn Technology Group and Wistron Corp., have faced blowback in India because of their treatment of workers. The U.S. company took the unusual step of placing a Foxconn factory near the southern Indian city of Chennai on probation after protests about food safety and accommodation standards.

In addition, the country’s antitrust regulator, the Competition Commission of India, has begun a probe into app store fees. 

(Updates with context in 10th paragraph)

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(Bloomberg) — The most political moment of the 2022 Winter Olympics is upon us.

The opening ceremony, which start Feb. 4 at 8 p.m. in Beijing, will give President Xi Jinping his best chance to use the games to burnish his country’s image. Almost immediately afterward, the competitions will take over the spotlight, but for a few hours on Friday, China will have the attention of a worldwide audience to itself. 

“The Olympics can be useful for bolstering China’s image because they draw attention from viewers who don’t necessarily pay lots of attention to global politics and foreign policy, where coverage of China’s behavior has been much more critical,” said Sheena Greitens, an associate professor at the University of Texas at Austin whose research focuses on East Asia. 

Even with the advantage of viewers’ general excitement and enthusiasm, Beijing has an uphill battle. Reports of human rights abuses in the country’s Xinjiang region, the suppression of dissent in Hong Kong and saber-rattling over Taiwan have pushed opinions about China to historic lows in the West, fueling opposition to its rise as a global power. 

Western TV networks including NBC and the BBC, have come under pressure to address China’s human rights record during live broadcasts of the opening ceremony, and some athletes may not participate as a form of protest. Against that backdrop, the pageantry is one way Beijing can make its appeal. 

Last summer, Xi told senior officials the country needed a more “trustworthy, lovable and respectable” image internationally. To put that on display during the opening ceremony, Beijing tapped Zhang Yimou, China’s best-known film director. Zhang, whose movies include “Hero” and “House of Flying Daggers,” also directed the 2008 opening pageant, a four-hour spectacle that involved a cast of 15,000. 

 

 

This year’s opening ceremony will also take place at Beijing National Stadium, also known as the Bird’s Nest, which held the event in 2008. By contrast, it will be “simple, safe and splendid,” organizers have said, just over an hour and a half with a mere 3,000 participants. About 90% will be students.

“China will seek to use the Games to present a positive view of Chinese culture as something apolitical,” said University of Texas’s Greitens.

Domestically, Beijing will make its appeal to an audience exhausted by strict Covid restrictions and worried about a worsening economy. The property market, where many Chinese have the majority of their personal wealth, is slumping, just as Xi readies for a Communist Party congress later this year, where he’s expected to secure a precedent-defying third term. 

The opening ceremony will showcase technologies like 5G and artificial intelligence, according to the official Xinhua News Agency. Cathy Wu, an assistant professor at Old Dominion University whose research focuses on Chinese foreign policy, sees that as an attempt to demonstrate that China continues to achieve breakthroughs and make progress. “It’s kind of like sending a message to China’s domestic audience that we are doing fine,” she said.

China’s general challenges will be underscored by the sparse crowd at the opening ceremony. Attendance is limited as a precaution against Covid, and a U.S.-led diplomatic boycott of the games has persuaded many world leaders to stay away. There will be 21 world leaders in Beijing for this year’s festivities, compared with 68 in 2008, and of those in attendance, only one — Luxembourg’s Grand Duke Henri — represents a “full democracy.”

In the end, there may be few truly open minds in the audience, noted Jules Boykoff, a professor at Pacific University in Oregon and author of several books on the Olympics. “Olympic boosters will be ready to praise the ceremony almost regardless of what actually transpires,” he said. “Critics will be sniffing out opportunities to platform their critiques.”

In the long run, the data is mixed on how the Olympics can affect a country’s image. Activists also recognize the power of the Olympics to market their causes, and polls and surveys by Anholt-Ipsos Nation Brands Index, Gallup Inc. and the BBC suggest perceptions of China may have suffered after the 2008 games.

“The effect of the Olympic games on national image is complicated and unpredictable,” said Susan Brownell, a professor at the University of Missouri at St. Louis and author of “Training the Body for China: Sports in the Moral Order of the People’s Republic.” “Soft power does not inevitably follow the hosting of Olympic games.”

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(Bloomberg) — Saudi Arabia’s sovereign wealth fund deepened its bet on video games, fresh from a face-saving deal that turned around its investment in Activision Blizzard Inc. 

The fund took a stake worth about $883 million in a Japanese firm that makes titles popular in South Korea and has a tie-up with Hollywood directors behind the Avengers movies to turn their films into computer games.

The Public Investment Fund disclosed a 5.02% stake in Nexon, the company behind role-playing games like MapleStory and Dungeon&Fighter, according to a filing on Thursday. It said the purpose for holding the shares is “pure investment,” and the filing showed the latest purchases were made in the market from Jan. 25 to Jan. 27.

The PIF, as the $500 billion fund is known, has been building up stakes in video game makers and e-sports over the past two years. Its purchase of about 37.9 million shares in Activision Blizzard Inc., which it began acquiring in late 2020, was losing money until Microsoft Corp. agreed to buy out the studio behind the Call of Duty series. 

The Saudi fund also has stakes in Electronic Arts Inc and Take Two Interactive Software.

Chaired by Crown Prince Mohammed bin Salman, the Public Investment Fund has earmarked about $10 billion to buy global stocks based on a thematic strategy that focuses on areas including e-commerce and renewables, people familiar with the matter said last month.

Tokyo-based Nexon recently made a $400 million investment in AGBO, the independent film production company co-founded by “Avengers” directors Joe and Anthony Russo, while last year it bought $100 million of Bitcoin

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(Bloomberg) — Nasdaq 100 Index futures tumbled as disappointing earnings and forecasts from technology bellwethers halted a rally in global stocks. The dollar strengthened before rate decisions in Europe and the U.K.

Contracts on the tech-heavy gauge were down 2% Thursday, even as Facebook parent Meta Platforms Inc. plunged in premarket New York trading on a weaker-than-expected revenue forecast. S&P 500 Index futures were 0.9% lower. Technology stocks were the worst performers on Europe’s benchmark gauge. The euro and British pound lost at least 0.1% against the dollar. 

Weak numbers from Meta to Qualcomm Inc. and Spotify Technology SA jolted investors who had bet a strong earnings season would keep equities attractive and counter some of their lingerintg worries including Federal Reserve tightening and stubborn inflation. That’s stalled the biggest four-day gains in MSCI Inc.’s gauge of world stocks and refueled traders’ switch into less expensive value stocks.

“What people care about is earnings and inflation,” said Ipek Ozkardeskaya, a senior analyst at Swissquote. “Disappointing Facebook results, and a plunge in Meta shares in the afterhours trading calls for a red session in the U.S.”  

 

Meta shares, which had plunged 22% in late New York trading, trimmed their losses to 19% in Thursday’s premarket session. NVidia Corp. and Qualcomm lost more than 3%. Amazon.com Inc., which will post its financial results after U.S. market hours, also slid 3%.

Europe’s Stoxx 600 gauge fell close to its 100-day moving average. A rally in energy and commodities companies limited the decline.

The focus in Europe was rather on the European Central Bank’s rate decision. A record regional inflation print is adding pressure on policy makers to act amid concerns they may be too slow in fighting inflation. 

Meanwhile, The Bank of England is on the verge of a historic decision to deliver the first back-to-back interest-rate increase since 2004 and take the initial steps toward unwinding some of its 895 billion-pound ($1.2 trillion) stimulus program.

The poorly received earnings reports from the U.S. tech giants are a challenge for dip buyers hoping that corporate performance will ease worries about central bank interest-rate hikes. Markets have swung sharply and stocks are nursing losses this year as officials pare stimulus to curb inflation.

“Volatility is here to stay,” Anna Han, equity strategist at Wells Fargo Securities, said on Bloomberg Television. “Our outlook for 2022 was that we’d see more spikes in volatility. With that choppiness, with that unpredictability, investors are going to express that by compressing multiples.”

Oil fell from a seven-year high eased from a seven-year high as traders waited to see whether OPEC+ can deliver on its latest promised increase in supply.

Meanwhile, ADP figures before Friday’s offical jobs report showed employment at U.S. firms shrank in January by the most since the early days of the pandemic. The omicron virus variant dealt a swift yet likely temporary blow to the labor market.

For more market analysis, read our MLIV blog.

What to watch this week:

• Earnings are due from Amazon, Ford Motor
• Bank of England, European Central Bank rate decisions, Thursday
• Fed Board of Governors confirmation hearing, Thursday
• U.S. factory orders, initial jobless claims, durable goods, Thursday
• U.S. payrolls report for January, Friday
• Winter Olympics kick off in China, Russia’s President Vladimir Putin due to attend opening ceremony, Friday

Some of the main moves in markets:

Stocks

• The Stoxx Europe 600 fell 0.6% as of 9:46 a.m. London time
• Futures on the S&P 500 fell 1%
• Futures on the Nasdaq 100 fell 2%
• Futures on the Dow Jones Industrial Average fell 0.3%
• The MSCI Asia Pacific Index fell 0.4%
• The MSCI Emerging Markets Index was little changed

Currencies

• The Bloomberg Dollar Spot Index rose 0.2%
• The euro fell 0.2% to $1.1287
• The Japanese yen fell 0.2% to 114.74 per dollar
• The offshore yuan fell 0.1% to 6.3664 per dollar
• The British pound fell 0.1% to $1.3557

Bonds

• The yield on 10-year Treasuries was little changed at 1.78%
• Germany’s 10-year yield was little changed at 0.04%
• Britain’s 10-year yield advanced two basis points to 1.27%

Commodities

• Brent crude fell 0.9% to $88.70 a barrel
• Spot gold fell 0.1% to $1,804.11 an ounce

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(Bloomberg) — Facebook’s user growth faltered in the latest quarter, the first stagnation in the social network’s history, part of dire earnings that caused Meta Platforms Inc.’s stock to collapse 20% in pre-market trading on Thursday, wiping about $200 billion from its market value.

The company also gave a disappointing sales forecast for the current period, and Chief Executive Officer Mark Zuckerberg, who saw his personal wealth potentially plummet about $24 billion, acknowledged that Meta is facing serious competition for user time and attention, particularly from viral video-sharing app TikTok. 

The dour outlook and stalled user momentum is a dramatic turnaround for a company that has posted share gains in every year but one since its 2012 IPO, stoking concern that Meta Platforms flagship product and core advertising moneymaker has plateaued after years of consistent gains.

Zuckerberg said Meta’s rival to TikTok, Reels, is growing quickly, but monetization has been slow, and he asked investors for patience as the product ramps up.

“Over time we think that there is potential for a tremendous amount of overall engagement growth” with Reels, he said on a conference call Wednesday. “We think it’s definitely the right thing to lean into this and push as hard to grow Reels as quickly as possible and not hold on the brakes at all, even though it may create some near-term slower growth than we would have wanted.”

The misses come at a critical juncture for the company, which is fighting regulatory battles on multiple fronts and also trying to justify a costly shift in corporate strategy to bet on the metaverse, Zuckerberg’s vision for an immersive internet that may take years to realize. For the better part of a decade, it has seemed like Facebook would never stop growing. Now young users — the future consumers of its advertising — are choosing platforms like TikTok and Google’s YouTube for entertainment and community instead.

Rarely, if ever, has Meta been confronted by so many substantial threats at the same time. Aside from user growth woes and intensifying competition, Meta is also contending with a crackdown on targeted advertising by Apple Inc., which it said may trim $10 billion in revenue this year, and cutbacks by advertisers that are paring budgets because of rising costs and supply chain disruptions.

The company, which changed its name to Meta last year to indicate its future direction, also said it will be taking on the META stock ticker in the first half of the year. Shares plunged as low as $244 in late trading, after closing at $323 in New York. The stock, which currently trades under the ticker FB, had declined 4% so far this year through Wednesday’s close.

Meta’s Reality Labs division, which includes the company’s investments in the metaverse and virtual reality, reported an operating loss of $3.3 billion for the fourth quarter, as the company disclosed its contribution for the first time.

On the company’s call, Zuckerberg was asked when parts of the metaverse will begin to arrive for users. He replied that some aspects — like digital avatars — are already here. He also reminded analysts that while the metaverse will be best experienced using a virtual or augmented-reality headset, people will still be able to access the digital environment through Meta’s existing apps, like Facebook and Instagram.

Facebook reported 2.91 billion monthly users in the fourth quarter, flat compared with the prior period. The main app’s daily active users in North America — the company’s most lucrative market — declined slightly from 196 million to 195 million users.

Meta said revenue in the current period will be $27 billion to $29 billion, compared with the $30.3 billion analysts estimated on average. Changes to Apple’s mobile software that require user permission to gather data for ad tracking are significantly crimping revenue by limited targeted advertising, Meta said.

Sales are also taking a hit because Meta doesn’t make as much money from Reels video clips as it does from other products, like News Feed and Stories. Still, executives painted an optimistic picture, saying Reels will one day make as much money as those other products. 

Net income in the fourth quarter was $10.3 billion, or $3.67 a share, Meta said, falling short of the $3.84 per share analysts projected. Revenue was $33.67 billion, compared with the $33.43 billion average estimate.

Wednesday’s earnings report was the company’s first since changing its corporate name from Facebook late last year. When Meta announced the change, the move was criticized for being a distraction from the many problems Facebook has been asked by regulators to fix with its existing networks. But it’s not just branding — resources and talent within Facebook have shifted to the new focus. Meta had said in October that it would see a $10 billion reduction in operating profit for the year because of investments in Reality Labs.

It was also the first financial report since Zuckerberg declared that attracting young people — 18- to 29-year-olds — was the company’s new “North Star.” The company hasn’t said how it plans to disclose its progress toward that goal, and there was little shared Wednesday to address this new push besides a heightened focus on Reels. Young people in particular have been drawn to apps such as ByteDance Ltd.’s TikTok and Snap Inc.’s Snapchat, raising concerns within Meta. That was spotlighted by internal research and communications released by whistle-blower Frances Haugen last year, a trove of documents known as the Facebook Papers.

Meta doesn’t regularly break down users by age. It also doesn’t say how many people use Instagram or messaging service WhatsApp, or how much revenue those properties generate.

The company gets about 97% of its revenue from advertising on its social platforms. It warned again about the impact of recent changes to Apple’s iOS software for iPhones, which requires that companies like Meta ask users for explicit permission to gather data about them. Early estimates show that most users decline this tracking, which makes targeted advertising — Facebook’s main selling point to businesses — harder. 

“We believe the impact of iOS overall is a headwind on our business in 2022, on the order of $10 billion,” Chief Financial Officer David Wehner said on the conference call.

Chief Operating Officer Sheryl Sandberg said the Menlo Park, California-based company is working on ways to help advertisers target people with messages that require less personal data. 

“There are also a lot of things that small businesses and large businesses can do to take advantage of the many targeting and measurement tools we have,” Sandberg said on the call.

(Updated with shares.)

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(Bloomberg) — After a month of controversy involving podcast host Joe Rogan, Spotify Technology SA disclosed a more immediate business problem: a slowdown in its growth to start the year.

The company said it would end the first quarter with 418 million total users and 183 million paid subscribers, shy of Wall Street forecasts on both numbers. Spotify shares slipped as much as 23% in after-hours trading, erasing much of the gains made over the past two years, though partly recovered to an 8.7% drop at 4:37 a.m. in New York on Thursday.

Spotify blamed the forecast on its strong end to 2021. The company had its biggest quarter yet in the final three months of the year, adding 25 million users and 8 million paid subscribers. Spotify’s business has boomed during the pandemic, with 135 million users added since 2019. Almost half now pay for the service. But the uneven return to business as usual has made it hard for companies to predict their growth. Netflix Inc. also forecast a slow start to 2022, blaming a pandemic hangover.

The first quarter is becoming “a smaller part of overall subscriber picture,” Chief Financial Officer Paul Vogel said on a call with analysts Wednesday. “It has become less important for growth.” Vogel said the company also shifted some of its promotional plans so that more growth happens in other quarters. Its biggest campaign, Spotify Wrapped, occurred in early December.

Spotify Chief Executive Officer Daniel Ek said it’s too soon to know whether a recent artist boycott is impacting its business. This week David Crosby and Stephen Stills joined fellow musicians Neil Young and Joni Mitchell in pulling their music from Spotify to protest Rogan, whom they say is peddling misleading information about the pandemic and Covid-19 vaccines. 

Spotify has pledged to put advisories on podcasts that discuss Covid-19. But now podcast hosts have joined the boycott and social media users have said they are deleting the app.

“Usually when we have controversies in the past, they are measured in months not days,” Ek said. “But I feel good about where we are.”

Podcasting boosted the company’s advertising business. Advertising sales accounted for 15% of revenue in the final quarter of 2021, a new high for the company. Spotify said advertising rates were going up and that its growing audience has created more ad inventory.

The company’s results for 2021 also exceeded analysts’ forecasts. It closed the year with 406 million users, and delivered positive operating income last year for the first time. Spotify credited India, Indonesia and Latin America with driving a lot of the growth in the most-recent quarter.

Ek urged investors and analysts to adopt a long-term view for the company, which is seeking to become the dominant service for people who make and listen to audio. He estimated Spotify would one day serve 50 million different people who create audio, and would sign up 1 billion users. 

(Updates share move in second paragraph.)

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(Bloomberg) — Virgin Wines UK Plc shares tumbled the most on record after the online wine retailer said Christmas deliveries were hurt by the omicron variant. 

Labor shortages because of staff calling in sick or self-isolating meant that “the business had to ‘cut off’ for Christmas delivery 2 days earlier than planned to ensure all customers received their orders,” the company said in a statement Thursday. It now sees revenue and profit for the fiscal year ending in June to be slightly below consensus market expectations.

Shares in Norwich, England-based Virgin Wines plunged as much as 23%, taking its market capitalization down to 86.5 million pounds ($117 million). The stock has fallen 21% since going public in March 2021. 

“This will likely be taken as a negative read-across” for peer Naked Wines Plc, Jefferies analyst Andrew Wade wrote in a note to clients. Shares in that company fell as much as 5.5% to the lowest since November 2020.

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