Elon Musk plans to cut Twitter workforce by 75%

Just after declaring that he was overpaying for Twitter, there have been reports that Elon Musk is planning to cut Twitter's workforce by 75%

This is based on documents sighted by the Washington Post. If true, this will bring Twitter's workforce from 7500 to 2000 employees.

Musk is purchasing Twitter for $44 billion in a deal expected to close by 28 October 2022.

Twitter Investors to hit Elon Musk with a putative class action

A putative class action is a lawsuit brought by one or more plantiffs on behalf of a potential group of similarly situated individuals (known as a class) who allegedly suffered a common claim.Colchester, Pitre & McCarthy (www.cpmlegal.com), and Bottini & Bottini announced that they have filed a class action suit on behalf of all persons who sold the common stock and securities of Twitter (NYSE: TWTR) between the dates of 13 May 2022 and 4 October 2022. The lawsuit (Pampena v Elon Musk, Case No. 3:22-cv-05937) is pending in the United States District Court for the Northern District of California.

The lawsuit alleges that Elon Musk has issued false statements regarding his purchase of Twitter, including misleading tweets that the merger was "temporarily on hold" and "cannot go forward".

After the series of tweets and back and forth statements by Musk and Twitter, Twitter's stock price fell. On 4 October 2022, Elon Musk issued a statement that he will proceed with the purchase at a price of $54.20 per share.

Twitter share price closed at $49.94 on 12 October 2022.

Gold will rise with Trump Victory

With a Trump victory, gold prices will be on the rise. The Fed might want to raise rates but that will be an extremely costly move considering that full employment is not there and there are no signs of inflation. Trump's plan for fiscal stimulus and trade protectionism also leads to uncertainty.

It does not make sense for interest rates to rise while trying to stimulate the economy. Americans still need jobs to be created. Trade protection will lead to currency devaluation and it does not make sense for the US dollar to strengthen at this point.

Gold will rise.

Hottest Tech IPOs flocking to NYSE instead of NASDAQ

Nasdaq has always been the exchange of choice for US tech companies seeking an initial public offering (IPO). But the tides seem to have changed and many tech companies are starting to favor NYSE over Nasdaq.

Part of this was the Facebook IPO on Nasdaq. But some of it is probably due to NYSE's marketing done in the Silicon Valley.

Biggest tech firms registered to go public include Twilio, Line Corp and Elevate Credit. Last year's batch include familiar names such as GoDaddy, Square, Fitbit, and Box.

How Much is Yahoo Worth?

So Yahoo is trying to sell its core business as well as a bunch of patents that it owns. Analysts have thus far been pricing these assets around US$6 to 8 billion. Meanwhile, certain news commentators have suggested that Yahoo is looking at a price of sound US$10 billion.

Meanwhile, bids by AT&T and Dan Gilbert are at US$5 billion for Yahoo's core business, patents and real estate.

Verizon has put in a lower bid but that is without the patents.

There are other bidders and some news outlets have reported that sources indicate that bids are ranging between US$4-8 billion.

Temasek and GIC buy Alibaba

Singapore's Temasek Holdings and GIC have each bought $500 million worth of Alibaba shares at a price of $74 each from Japan's Softbank. Softbank has been unloading its Alibaba shares in order to strengthen its balance sheet. While it initially wanted to raise $8.9 billion, this has since increased to $10 billion.

Alibaba is China's greatest e-commerce company listed on NYSE. Alibaba is itself buying back $2 billion of shares from Softbank at the same price of $74 per piece. 

Starboard seeks change to Yahoo's management and board

Activist investor Starboard Value LP which owns less than 1% of Yahoo's shares has delivered another letter to Yahoo's board asking for a change in management, board composition, and changes in strategy and execution. In the same letter, Starboard cited that it was growing increasingly frustrated even as it attempted to work constructively with the board.

Yahoo was previously considering a sale of it's Alibaba business but has now decided to put it on hold after there was no certainty that the sale would not be taxed. Starboard which first proposed the sake is now encouraging a sale of Yahoo's core search and advertising business instead.