The Sunday Brew #25
In this brew - First Republic - Another US bank crashes, Samsung reports losses, Fox shares dip as Carlson exists and Indian EdTech gets raided by ED
TOP STORY
First Republic - Another bank in US goes down
In March, during the banking crash, First Republic faced significant pressure due to its large loan-to-deposit ratio. In order to support withdrawal requests and allay fears of bank runs, top US banks such as JPMC, Wells Fargo, and BoA deposited $30 billion. Although this helped prevent a crisis, the share prices of First Republic continued to decline as its rating was downgraded to junk level by S&P.
The bank revealed last week that over $100 billion in deposits were withdrawn in Q1, leading to a rapid plummet in share price and subsequent layoffs. Soon after, reports of the FDIC placing the bank under receivership emerged. As of Friday, the share price had dropped below $3, from $147 in February. The auction process is now underway, with banks such as JPMC, PNC, and BoA being approached to place bids. Read On»»»
WEEK’S PICK
Samsung reported massive operating profit pullback
Samsung Electronics reported a significant drop in operating profit of 95.5% in Q1 compared to last year on Thursday. The company announced that its mainstay semiconductor business incurred a loss of $3.4 billion. This loss was a result of Samsung having to reduce its semiconductor output due to weakened global economic growth and consumer sentiment, which led to a decline in demand. Read On»»»
Fox share value tanks after Carlson exit
After announcing the departure of prime time host Tucker Carlson, Fox Corporation experienced a staggering $800 million drop in market value on Monday. Interestingly, in the days that followed, a video posted by Carlson himself received 15 times more views than his show on Fox. This raises questions not only about the future of Fox Corporation, but also about the public's strong perception of the company's value being tied to a single individual. Read On»»»
BYZU’S raided in connection of $3.8B FDI
BYJU'S, the Indian EdTech company valued at over $22 billion, has been embroiled in controversies over the past few years related to predatory sales practices and compliance with financial regulations.
On April 29, the company and its CEO's residence were raided by the Enforcement Directorate (ED) for violating the Foreign Exchange Management Act (FEMA) in relation to the investment of $3.8 billion. The ED has reported that they seized "incriminating documents and digital data" during the raid. Read more»»»
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