Robinhood shares fall as retail brokerage reports shrinking revenue, fewer active users [CNBC]
“Our larger customers are still remaining active, but we are seeing more pronounced declines from those that have lower balances,” CEO Vlad Tenev said on a conference call with investors and analysts. “With the uncertainty in the market, our customers became more cautious with their portfolios….”
For the three months ended March 31, Robinhood said its loss narrowed to $392 million, or 45 cents per share, from a loss of $1.4 billion, or $6.26 per share, a year ago. Revenue fell 43% from a year ago to $299 million.
China’s Sudden Currency Plunge Raises Risk of a 2015-Style Panic [Bloomberg]
“China can’t afford a massive outflow of capital right now,” said Alicia Garcia-Herrero, Natixis SA chief Asia Pacific economist. “The PBOC may mitigate the yuan move lightly because they have a clear memory of 2015. They will do their best not to be seen as pushing capital controls, especially ahead of the 20th Party Congress….” China’s stocks are tumbling and its government bonds no longer offer carry over comparable Treasuries, diminishing the appeal of yuan-denominated assets. Covid lockdowns and a slowing property market are darkening the outlook for the economy, with one recent forecast calling for sub-4% growth this year. Chinese state media last week said slowing exports, a hawkish Federal Reserve and capital outflows from emerging markets will weaken the yuan this year.
China Plans Reprieve for Tech Giants, Including Delaying New Rules, as Economy Slows [WSJ]
Regulators are planning to hold off on new rules that limit the time young people spend on mobile apps, according to one of the people, while another person said that Beijing is considering pushing some of its biggest tech companies to offer 1% equity stakes to the state and give the government a direct role in corporate decisions…. Any loosening of regulations for the tech sector would underscore the importance of economic stability for Chinese leader Xi Jinping in a key political year in which he is expected to break with recent precedent and seek a third term in power.
Musk’s Ties to China Could Create Headaches for Twitter [NYT]
Like all foreign investors in China, he operates Tesla at the pleasure of the Chinese authorities, who have shown a willingness to influence or punish companies that cross political red lines. Even Apple, the world’s most valuable company, has given in to Chinese demands, including censoring its App Store.
Mr. Musk’s extensive investments in China could be at risk if Twitter upsets the Communist Party state, which has banned the platform at home but used it extensively to push Beijing’s foreign policy around the globe — often with false or misleading information.
Elon Musk Sells $8.5 Billion of Tesla Shares After Deal to Buy Twitter [WSJ]
He is on the hook to come up with $21 billion in cash to finance the Twitter deal. That funding plan also includes borrowing $12.5 billion from loans backed by more than $62.5 billion worth of Tesla shares that he owns. Tesla and several banks have put in place rules that would require him to put up more collateral if the company’s share price falls.
Cathie Wood Stock Pick Teladoc Sinks 40% After Slashing Forecast [Bloomberg]
Teladoc, a former stay-at-home winner, extended a slump that’s wiped out nearly 90% of its value since a record high set in February 2021…. Wood’s ARK Investment Management LLC is Teladoc’s largest shareholder, with a 12% stake worth about $652 million, well below Wednesday’s $1.1 billion valuation…. Wood’s funds added to their positions in Teladoc on Monday and Tuesday ahead of the telemedicine provider’s report.