Terraforms Labs Files for Bankruptcy Protection,
Editor’s Note: Happy Hump Day, friends! Is it Friday yet?
The Latest in the Terra Saga
Remember cryptocurrency Terraform Labs?
Back in May 2022, the company’s so-called “stablecoin” TerraUSD failed to hold its peg to the U.S. dollar… spectacularly. The coin’s plunge to roughly 30 cents led to a market value wipeout of more than $40 billion for both TerraUSD and its sister coin, Luna.
But the plunge had a far bigger effect than originally thought. Within two weeks of the crash, roughly $500 billion had been erased from the crypto market as a whole… ushering in the “crypto winter.”
And thanks to another spectacular disaster — involving FTX — the market value of cryptos plunged from $2.8 trillion in November 2021 to about $800 billion at the end of 2022.
The crypto market is still trying to gain lost ground, currently being worth roughly $1.6 trillion.
Anyway, Terraform Labs sprung back into the headlines this week after announcing that the company is filing for Chapter 11 bankruptcy protection in a Delaware court.
“The filing will allow [Terraform Labs] to execute on its business plan while navigating ongoing legal proceedings, including representative litigation pending in Singapore and U.S. litigation involving the Securities and Exchange Commission (SEC),” a statement from Terraform Labs said.
Oh yeah, about that litigation… The SEC is trying to prosecute Terraform Labs and its founder, Do Kown, for financial fraud. But in order to do so, the agency wants to extradite Kwon, who is currently in a Montenegro jail for attempting to flee the country on a fake Costa Rican passport.
Some people never learn, do they?
According to a statement, Terraform Labs is hoping to use the bankruptcy process as a way to rebuild and continue its Web3 efforts.
Disney Prepares for War
Who’d have thought Disney (NYSE: DIS) would become a battleground?
OK, anyone older than 12 and who understands how money works.
The House of Mouse is currently under attack from activist investor — and Disney shareholder — Nelson Peltz, who through his Trian Fund Management firm is trying to get on the company’s board of directors.
Disney has been struggling quite a lot lately… the COVID pandemic took a big bite out of many aspects of the company, from its box-office revenue to its theme park revenue. The company has been trying to beef up its streaming service, Disney+ — but we all know how difficult it is to get those things profitable.
Peltz believes he can turn around the company, thanks to a list of initiatives he plans to push if he becomes a director. At the top of the list is a vow to get the CEO succession problems ironed out.
In 2022, Disney fired then-CEO Bob Chapek and brought former CEO Bob Iger out of retirement. But Iger now shows no signs of ever relinquishing his grasp on the company. (Well, would you, if you get paid more than $31 million per year, despite the company’s awful stock performance?)
Peltz apparently wants to make Disney more like Netflix (NSDQ: NFLX), wanting to “target and achieve Netflix-like margins” of 15% to 20% by fiscal 2027.
“Disney is resisting change and asking shareholders to endorse a board comprised mainly of legacy directors — and their hand-picked successors — who have repeatedly failed to properly plan for CEO succession, misaligned the incentives of management, and failed to oversee or drive a strategy to get the streaming business to profitability or the studios to produce good content,” Peltz said in a statement.
Macy’s Takeover Bid: Thanks, but No Thanks.
This week, beleaguered department store chain Macy’s (NYSE: M) rejected a $5.8 billion deal that would have taken it private.
According to a company statement, the “unsolicited proposal,” which was brought to the table last month by Arkhouse Management and Brigade Capital Management “lacks compelling value.”
Arkhouse and Brigade already own stakes in the retailer and offered to pay a hefty premium for all the rest of Macy’s shares.
Macy’s certainly suffered due to the COVID pandemic, but the retailer’s fortunes were waning even before then as big-box retailers such as Target (NYSE: TGT) and Walmart (NYSE: WMT) captured shoppers and e-commerce-focused companies like Amazon (NSDQ: AMZN) rewrote the rules of the retail game.
The legacy retailer has been trying to lure in customers with smaller stores and new private labels… without much success.
Macy’s stock has plummeted to around $18 per share from its high of roughly $73 in mid-2015.
Apple’s R&D Warchest
Apple (NSDQ: AAPL) — known for its culture-shaking technology — has been spending a ton of money looking for the “next big thing.”
During the company’s fiscal year 2023, which ended on September 30, Apple spent $29.9 billion on research and development (R&D). That’s a more than $10 billion increase over the company’s R&D spending in 2020.
Take a look:
You will find more infographics at Statista
No doubt, a lot of that spending went to develop the upcoming Apple Vision Pro — although CEO Tim Cook has hinted that artificial intelligence (AI) technology and machine learning were also behind the R&D spending increase.
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