Today is Thursday, May 26. Here's what you can expect this week:
- Four stories, covering the baby formula shortage, the damage from Snap Inc.'s stock price drop, recalls from Hyundai and Ford and a small-but-big union election at Activision Blizzard.
- Other notable headlines to skim, including the investors who put $1 billion into Donald Trump's media company, a big payout to a veteran from 3M over faulty earplugs, an apology from Walmart over questionable Juneteenth merchandise and more.
- Headlines on the Russian invasion of Ukraine, including Starbucks' exit from Russia and the half-exit of McDonald's.
- The Elon Musk-date: In a bombshell report from late last week, Business Insider said SpaceX paid $250,000 to settle accusations of sexual harassment against Musk, who denies the allegations.
- A data snapshot of the stock market, including stock index prices.
- This week in business history. This week in 1906, the Wright Brothers received their patent for their "flying machine."
- Editor's picks, including a Washington, D.C., lawsuit against Mark Zuckerberg over the Cambridge Analytica scandal, a huge spike in gun production in the U.S., data on workers' plans to change jobs, a video on the costs of living in a major city and more.
- The weekly news quiz.
Baby formula shortage continues despite best efforts
The story: The baby formula shortage continued this week and kicked into high gear with multiple developments: The CEO of Abbott Laboratories, a prominent maker of baby formula, apologized after the shutdown of its large Michigan plant and ensuing formula recall worsened the shortage; President Joe Biden activated the Defense Production Act and airlifted baby formula to the U.S. from Europe; the Federal Trade Commission opened an inquiry into the shortage; and the House is holding hearings.
Why you should care: Babies are dying over this debacle and there’s not really much that can be done about it. Manufacturers are producing as fast as they can and the airlifts from Europe help a little bit, but there’s no magic wand to wave to create the necessary supply fast enough. Stocks of many important goods were already tenuous amid the supply chain crisis and the COVID-19 pandemic, and Abbott’s missteps proved to be the straws that broke the camel's back.
- Find formula during the Infant formula shortage
- Baby formula shortage, explained: why it's happening and when it could end
Snap stock crashes, dragging Big Tech down with it
The story: On Monday, technology company Snap Inc. lost nearly half, 43.1%, of its market capitalization, after CEO Evan Spiegel warned of challenging macroeconomic headwinds, according to CNBC. Snap Inc. is currently trading around $14 after closing at $22.50 on Monday. Following the announcement, multiple tech companies experienced stock price drops, including Pinterest (23.6%), Meta (7.6%), Twitter (5.6%) and Google (5%).
Why you should care: With advertising dollars hard to come by and general stock market losses amid rate hikes and sell-offs, tech companies are feeling the squeeze to an uncommon degree. Though most will likely bounce back in the long term, this kind of loss can lead to layoffs, hiring slowdowns and abrupt company changes in the short term. Just look back to what Netflix did after its stock took a hit. When Big Tech is one of the biggest drivers of the economy, this isn't great news.
Hyundai, Ford recall tens of thousands of vehicles
The story: Over the last week, Hyundai recalled 239,000 cars over exploding seat belt components, including 2019-2022 Accents, 2021-2023 Elantras and 2021-2022 Elantra hybrid electric vehicles. Ford also recalled 39,000 SUVs, including 2021 Ford Expedition and Lincoln Navigator vehicles, following 16 reports of engine fires.
Earlier last week, Ford recalled 310,000 trucks, including 2016 Super Duty F-250, F-350, F-450 and F-550 trucks, over airbag problems.
Why you should care: Though Hyundai only reported two injuries in the U.S. and Ford reported just one, these problems could be life-threatening. If you drive one of these vehicles, you should contact your dealer and/or manufacturer.
This is also bad news for Ford: The recall is the company's 30th of 2022, covering 3.5 million vehicles. That has to be taking its toll, especially given the car and car parts shortage, not to mention consumer frustration.
Activision Blizzard workers form 2nd video game union in U.S.
Why you should care: Despite concerted efforts by AB to bust the union, the workers were unequivocal, casting 19 of 22 votes to form the union. Though this isn’t the first video game union, this election occurred at the largest video game publisher in the U.S. and that’s bound to have ripple effects in the same way Starbucks and Apple unionization campaigns have.
Other notable headlines
Each week, we sift through hundreds of headlines from several publications to pick out business stories we think you'll want to know about. Here are the best of the rest you should still see:
- These investors are putting $1B into Trump Media
- Spirit Airlines calls for shareholders to reject JetBlue bid
- Fed policymakers back two more big rate hikes, but then what?
- Tinder-owner Match says Google to allow alternate payment systems for now
- 3M ordered to pay $77.5 million to veteran in latest earplug trial
- Walmart apologizes for Juneteenth ice cream flavor after backlash
- Airbnb is closing its listings business in China
- Google Maps workers say they can’t afford the trip back to the office
- Lyft to slow hiring, assess budget cuts
- Broadcom, VMware deal could be announced by Thursday, sources say
- Bank of America hikes its minimum wage to $22 per hour
- JPMorgan shareholders vote down pay bump for CEO Jamie Dimon
- Glencore to pay $1B settlement amid US bribery and market abuse allegations
- Union files NLRB charges against Chevron in California refinery strike
- Davos gathering overshadowed by global economic worries
- Economic outlook has 'darkened', business and government leaders warn in Davos
The Russian invasion of Ukraine
- Factbox-The Great Rebrand: Western business reborn in Russia under new names
- These U.S. companies are still doing business in Russia
- U.S. will start blocking Russia’s bond payments to American investors
- Starbucks will exit Russia after 15 years, closing 130 licensed cafes
- McDonald's to sell Russia restaurants to local operator, rebrand
- Factbox-Global banks pay price of Russia retreat
- Russia's economy will shrink by no more than 5% in 2022 -Kremlin aide
- A SpaceX flight attendant said Elon Musk exposed himself and propositioned her for sex, documents show. The company paid $250,000 for her silence
- Elon Musk denies sexual harassment claims
- SpaceX president defends Elon Musk over sexual misconduct claims: ‘I believe the allegations to be false’
- Tesla loses bid to move sexual harassment lawsuit to arbitration
- U.S. agency opens probe into fatal Tesla vehicle crash that killed three
- In a faceoff with Elon Musk, the SEC blinked
- Everything you wanted to know about Elon Musk and Twitter (but didn’t want to ask)
- How Jack Welch’s reign at GE gave us Elon Musk’s Twitter feed
The stock market snapshot
As of Wednesday at the market close, here were the prices of six of the major U.S. stock indices, according to CNBC:
- S&P 500: $3978.73 (Last week: $3923.68)
- S&P 100: $1798.34 (Last week: $1779.70)
- Nasdaq: $11434.74 (Last week: $11418.15)
- Nasdaq-100: $11943.93 (Last week: $11928.31)
- Dow Jones Industrial Average: $32120.28 (Last week: $31490.07)
- Russell 2000: $1799.16 (Last week: $1774.85)
This week in business history: The Wright brothers patent their "flying machine," controls and design
On May 22, 1906, Orville and Wilbur Wright, popularly known as the Wright brothers, were granted U.S. Patent No. 821,393 for their “flying machine” and the features and controls necessary to operate it.
Today, the airline industry, using planes powered by the same principles the Wright brothers identified, is an essential part of the U.S. economy, accounting for nearly $80 billion in 2021.
Under the radar
Just because it doesn't make the front page doesn't mean it's not important. Here are some interesting under-the-radar stories to ponder.
- MacKenzie Scott, the novelist and ex-wife of Amazon founder Jeff Bezos, donated $122M to Big Brothers Big Sisters of America. [USA Today]
- The district attorney for Washington, D.C., sued Mark Zuckerberg on Monday, saying the Facebook founder should be held financially responsible for the Cambridge Analytica data scandal during the 2016 U.S. elections. [Ars Technica]
You've got questions, the following stories have the answers.
- As a so-called "stablecoin" TerraUSD wasn't supposed to be capable of collapse, but that's what happened last week when its value dropped from $1 to around 9 cents. How did it happen? [The New York Times]
Data can't tell the whole story, but it can definitely paint a picture. Check out the following takeaways from new surveys, studies and polls.
- Gun production in the U.S. has spiked in the last three years and doesn't appear to be letting up, with the number of firearms produced having tripled since 2000, according to a new report from the Bureau of Alcohol, Tobacco, Firearms and Explosives. [The New York Times]
- Nearly one in five drivers delivering for Amazon suffered injuries in 2021, an annual increase of 40%, according to a study released Tuesday from the Strategic Organizing Center. [CNBC]
- A new survey of 52,000 workers across 44 countries from PricewaterhouseCoopers released Tuesday at Davos found that nearly one in five workers plan on changing jobs in the next year. [CNBC]
Video of the week
- With inflation raising the cost of living to extremes, many who live in major cities or have left them are asking the same question: Is living in a major city still worth it, especially if you've already left? [CNBC]
How closely were you reading? Test out your knowledge with this quick news quiz and scroll up or check next week's newsletter for the answers.
- Ford recently issued a recall for almost 40,000 SUVs over engine fires. How many recalls has Ford had so far in 2022?
- How much was 3M ordered to pay to a veteran over faulty earplugs?
- Starbucks is formally shutting down its business in Russia. How many cafes will be closing?
- SpaceX reportedly settled with a flight attendant who accused Elon Musk of sexual harassment. How much did the company settle for?
- Roughly how many drivers delivering for Amazon suffered injuries in 2021?
Last week's answers: 1) JetBlue offered $30-$33 per share to take over Spirit Airlines. 2) Netflix employs around 11,000 people. 3) It is true that TerraUSD was designed to trade at $1; it's currently trading around 9 cents and is effectively dead. 4) The U.S. government sued casino magnate Steve Wynn, accusing him of lobbying for China. 5) A new Pew Research Center survey found inflation was Americans' top concern by far.