News

Tesla and Virgin Galactic Stocks Rise

The summer of 2020 started more than impressive, as the world witnessed the first launch of a US-based space mission in nearly a decade. A partnership between NASA and Elon Musk’s privately held launch company SpaceX was responsible for sending two astronauts to the International Space Station. After the successful launch, SpaceX became the first company ever to send astronauts into space on a commercial flight. As the company isn’t publicly traded, investors found another way to celebrate, and Tesla recorded almost a 6 percent rise in shares. What is more, Richard Branson’s space flight company Virgin Galactic that plans to offer commercial flights into orbit for customers who want to view Earth from space, also recorded an immediate 10 percent jump in shares. Adam Jonas, an analyst at Morgan Stanley, a global financial services company, noted that “The successful launch was arguably the most important milestone in the US space program in nearly 40 years.“

Forbes Drops Celebrity from Billionaire List

Kylie Jenner’s status as a billionaire has been called into question by Forbes. The magazine, which once declared Kylie Jenner a billionaire on its cover, says that she no longer deserves the title and that her company Kylie Cosmetics is smaller and less profitable than she always claimed. In a newly released story, Forbes noted that an examination of financial filings after Jenner sold a majority share in her cosmetics company revealed that her worth was inflated. Jenner sold 51 percent of her company to Coty for around $600 million early this year. “Kylie’s business is significantly smaller and less profitable than the family has spent years leading the cosmetics industry and media outlets, including Forbes, to believe,” the magazine said in the story. “Forbes now thinks that Kylie Jenner, even after pocketing an estimated $340 million after taxes from the sale, is not a billionaire.”

Lufthansa and Germany Agree on a Rescue Deal

After extended talks, Lufthansa and Germany have finally reached an agreement regarding the rescue plan for Europe’s second-largest airline by passenger numbers, with a deal worth a bit more than $10 billion. The German airline has been severely affected by a decline in travel due to the coronavirus pandemic and also had to close its budget airline Germanwings in April. The German government will take a 20 percent stake in the company, which it intends to sell by the end of 2023. As part of the rescue package, the government will also inject $6,4 billion in non-voting capital, also known as a “silent-participation“. The deal makes the German government the company’s biggest shareholder. The bailout deal is the result of weeks of talks between Lufthansa and the German government about financial aid and will help save up to 10 thousand jobs, but it still has to be approved by the company’s shareholders and the European Commission.

The US to Borrow a Record $3 Trillion to Support the Economy

The US government stated it plans to borrow a record sum of $3 trillion in the second quarter of 2020 amid economic rescue efforts in the country that has been hit hard by the coronavirus pandemic. The Treasury Department noted in the statement that “The increase in privately-held net marketable borrowing is primarily driven by the impact of the COVID-19 outbreak, including expenditures from new legislation to assist individuals and businesses, changes to tax receipts including the deferral of individual and business taxes from April — June until July, and an increase in the assumed endof-June Treasury cash balance.” Last quarter, the Treasury borrowed about $500 billion, and it plans to borrow another $677 billion in the third quarter. The US borrows by selling government bonds. It has historically enjoyed relatively low-interest rates since its debt is viewed as relatively low-risk by investors around the world.

Zoom Video Jumps to a Record Market Cap

As the coronavirus pandemic has forced many global companies, schools, non-profit organizations, and consumers to start working from home and switch to video conferencing, Zoom Video Communications recorded a jump in shares. The maker of video conferencing software rose 9,7 percent to $179,48 per share, giving it a record high market value of $50,6 billion. The company’s management has also reported that the number of daily meeting participants had exceeded 300 million at the end of April, up from 10 million in December. Eric Yuan, Zoom’s founder, and CEO saw his net worth rise by more than $800 million on the last days of May to $9,3 billion, according to the Bloomberg Billionaires Index. Interestingly, even before the coronavirus outbreak, Zoom’s revenue growth rate was already impressive: during its fiscal year 2020 ending on January 31, revenue jumped to $622,7 million, up to 88 percent year over year.

Volkswagen Closes a $2,6 Billion Investment in Argo AI

Amazon’s Jeff Bezos invests in British Logistics Startup

Amazon CEO Jezz Bezos has invested $15 million in the British digital logistics startup Beacon Technologies Ltd. The startup was founded in 2018 by two former Uber Technologies Inc executives, and it is also a supply chain finance firm that provides real-time data of cargo delivery and a marketplace view of global shipping costs and prices. Sky News noted that the backing of Bezos is a major boost for a company that aims to become a global leader in logistics and trade finance. Beacon, which provides logistics services for the global air, ocean, and truck freight industries, said it will use the funds raised in the Series A round to invest in new hires, technology, and market expansion. “With digitalization accelerating globally as a result of COVID-19, we believe the future of the traditional freight forwarder is more precarious than ever,” Beacon CEO Fraser Robinson said in a statement.

German automaker Volkswagen AG has closed a $2,6 billion investment in Argo AI, the Pittsburgh-based self-driving startup. Argo, founded in 2016 by Bryan Salesky and Peter Rander, is now jointly controlled by VW and Ford Motor Co, which made an initial investment in Argo shortly after it was founded. Details of the Volkswagen investment, which does not include an agreement to purchase $500 million worth of Argo stock from Ford, was announced last July. Argo AI noted that Volkswagen committed $1 billion in funding as well as the transfer of its Munich-based autonomous intelligent driving business, valued at $1,6 billion. “The news not only solidifies our well-capitalized position but differentiates us as the only self-driving technology platform company with partnerships and commercial agreements for deployment across the US and Europe,“ said Argo AI Chief Executive Bryan Salesky and Argo Munich Vice President Reinhard Stolle.

Gaming Giant Zynga Acquires Turkey’s Peak Games

US mobile game maker Zynga will acquire Istanbul-based gaming company Peak for $1,8 billion. The purchase includes $900 million in cash and $900 million in stock and is expected to boost Zynga’s daily active users by more than 60 percent. The deal comes as Zynga experiences a financial boost due to the coronavirus pandemic. “We are honored to welcome Peak to Zynga. Peak is one of the world’s best puzzle game makers and we could not be more excited to add such creative and passionate talent to our company,” Frank Gibeau, CEO of Zynga, noted in a statement. “With the addition of Toon Blast and Toy Blast, we are expanding our live services portfolio to eight forever franchises, meaningfully increasing our global audience base and adding to our exciting new game pipeline. As a combined team, we are well-positioned to grow faster together.” The acquisition is expected to close in the third quarter of 2020.