A Week Full of Apologies

Good Morning 

How are you doing?

Welcome to this week’s edition of 4 Customs Street, our weekly newsletter on the stock market.

The newsletter is divided into two: 

• Green White Green—focused on the Nigerian stock market. 
• Star-Spangled Banner—focused on the US stock market.

Green White Green 

Like the previous week in which there were no major events on the NGX, it is the same for this week. Should this change, it would be made known. 

Star-Spangled Banner Last Week 

Zuck is sorry 

Mark Zuckerberg, Meta co-founder and CEO, had a tough call to make last week as the company laid off 11,000 employees amounting to 13% of the company’s workforce. The company will also be cutting discretionary spending and extending its hiring freeze through Q1. 

The firing was because the growth in e-commerce activities fuelled by Covid, did not continue in the same magnitude. Zuck took personal responsibility for this. He said, "I want to take accountability for these decisions and for how we got here. I know this is tough for everyone, and I’m especially sorry to those impacted."

Shareholders seem to be happy with the news as the share price jumped 19% last week. Some investors had pushed for layoffs and a reduction in spending on the metaverse. 

SBF is sorry as well 

While this is away from Wall Street or Customs Street, it is a money matter and a major global event. Many people across the world were affected by the abrupt shut down of cryptocurrency exchange FTX last week. It was one of the top three biggest cryptocurrency exchanges in the world by volume. 

How things unravelled isn't quite clear. However, what we do know is that FTX, the crypto exchange, lent money to Alameda Research, a trading firm. This was illegal and against the firm’s terms and conditions. Both FTX and Alameda Research are controlled by Sam Bankman-Fried who is popularly known as SBF. 

Alameda lost some of that money, and when CZ, Binance co-founder, blew a whistle, there was a run (many people rushing to withdraw funds) on FTX. Many customers were unable to withdraw, and to be candid may have effectively lost a huge chunk of their funds. 

SBF, in a tweet shared a few days ago, said he was shocked by how things had turned out and he was sorry. 

Disney disappoints 

Disney’s revenue and earnings per share for the recent quarter came in slightly lower than expected. 

It made $20.15 billion in revenue vs. $21.24 billion expected. Earnings per share came in at 30 cents per share (adjusted) vs. 55 cents expected.

Streaming numbers were much better than expected. Disney+ added 12.1 million subscriptions during the period, bringing the platform’s total subscriber base to 164.2 million. 

The company will be embarking on a few cost cutting measures as well, including layoffs.

Star-Spangled Banner This Week 

Some of the country’s largest retailers will be dropping their most recent quarterly earnings. They include Walmart, Target and Home Depot.

Not only are they some of the largest employers in the country, they have insight into consumer spending. Consumer spending accounts for about 70% of the country’s Gross Domestic Product (GDP). So, if consumers are cutting spending (or the retailers think that they will), that's a big issue. 

Chip maker, Nvidia, will also release its earnings during the week, and the focus for many investors would be how it is navigating the chip war between the United States and China. 

Did you find this newsletter useful? You can read previous newsletters here

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