Jarden Brief: Meta gets sued over Facebook ‘addiction’ claim and sharpens the axe as 10,000 job cuts loom

Meta CEO Mark Zuckerberg. The company faces a lawsuit from the San Mateo County Board of Education for allegedly “addicting” students to social media platforms Photo / Bloomberg

Keeping you up to date with the latest market moves, in association with Investment firm Jarden.

International

US

Meta, the parent company of Facebook, has started its latest round of layoffs as part of the company’s so-called year of efficiency.

About 10,000 workers will lose their jobs in the cuts targeting members of various business groups.

This follows the company’s first round of layoffs in November which affected 11,000 employees.

In other news, Meta is facing a lawsuit from the San Mateo County Board of Education for allegedly “addicting” students to social media platforms and contributing to a mental health crisis.

Meta was up 0.3 per cent at the time of writing.

Microsoft has formally filed an appeal against the UK Competition and Markets Authority’s (CMA) decision to block its US$68.7 billion Activision Blizzard deal.

The decision was made in February 2023 to prevent Microsoft’s proposed purchase of Activision over concerns the deal would alter the future of the fast-growing cloud gaming market, leading to reduced innovation and less choice for UK gamers over the years to come.

The judicial review process will begin and could take as long as nine months. Microsoft was down 0.3 per cent at the time of writing.

Rest of the World

UK CPI data was released overnight from the Office of National Statistics.

The inflation rate fell by less than expected last month, rising by 8.7 per cent in annual terms in April, down from 10.1 per cent in March but still leaving Britain with the joint highest rate of inflation among Group of Seven advanced economies alongside Italy.

Core CPI (excluding energy, food, alcohol and tobacco) rose by 6.8 per cent in the 12 months to April 2023, up from 6.2 per cent in March, which is the highest rate since March 1992.

The FTSE closed 1.75 per cent lower.

New Zealand

Yesterday the Reserve Bank of New Zealand’s Monetary Policy Committee voted to raise the Official Cash Rate (OCR) from 5.25 per cent to 5.50 per cent.

The Committee discussed the suitability of keeping the OCR on hold at 5.25 per cent or increasing it to 5.50 per cent and agreed that neither decision would cause unnecessary instability in output, interest rates, or the exchange rate.

By a majority of five votes to two, the Committee agreed to increase the OCR by 25 basis points.

The Committee signalled that would be the peak, with current settings enough to calm inflation. The announcement drove the dollar lower, with NZD/USD declining 2.2 per cent to 0.6106.

The NZX50 rebounded off near session lows after the announcement, finishing 0.2 per cent higher.

Transportation technology services company Eroad reported positive financial year 2023 results yesterday, finishing the day up 10.3 per cent.

Normalised revenue of $165.3 million was above guidance ($159m to $164m). Reported revenue increased from $114.9 million in financial year 2022 to $174.9 million for financial year 2023 (52 per cent increase).

Free Cash Flow (FCF) improved from an outflow of $45.1 million in financial year 2022 to an outflow of $29.9 million in financial year 2023.

SkyCity closed 1.7 per cent lower after releasing an investor presentation with updated trading guidance.

The company guided to a lower normalised ebitda range of $300 - $310 million, down from a prior estimate of $305 - $320 million for financial year 2023.

Figures exclude car park earnings. The presentation highlighted strong electronic gaming machine performance, while table games remain subdued across all properties.

It also reflected some uplift from the New Zealand tourism recovery, partially offset by the negative impact on trading from recent weather events in Auckland.

The company is experiencing higher legal and compliance costs, partially as a result of increased resource and capacity around anti-money laundering and harm minimisation; and the termination of the Auckland Carpark Concession Agreement remains ongoing, with settlement expected to slip to financial year 2024.

Australia

The ASX200 closed 0.6 per cent lower today, led by Materials (down 1.7 per cent).

Webjet was one of the top performers in the ASX200, up 3.8 per cent after financial year 2023 saw a significant recovery in group bookings and total transactional value – both above pre-pandemic levels.

The company revenue increased 164 per cent to A$364.4 million. Net profit after tax of A$14.5 million shows the extent of the turnaround following an after-tax loss of A$81.6 million in financial year 2022.

Commonwealth Bank Australia (CBA) announced a series of innovations and technological advances designed to strengthen and deepen the customer experience yesterday.

CBA has announced some major new artificial intelligence projects. Photo / 123RF

Through its partnership with Silicon Valley-based H2O.ai, which CBA announced two years ago, the bank is further exploring and building out capability to experiment with new AI technologies.

CBA currently uses predictive artificial intelligence, primarily utilised through the Bank’s industry-leading Customer Engagement Engine (CEE) which now has approximately 1000 machine learning models and 157 billion data points in real-time to improve the customer experience.

AI is also being used to protect customers from the growing number of scams, including blocking payments when account numbers and names don’t match. CBA closed 0.5 per cent higher yesterday.

Baby formula manufacturer Bubs Australia dropped 5.0 per cent after its CFO Iris Ren resigned from the company after more than five years in the job.

Ren’s resignation leaves Bubs Australia without a permanent CFO and CEO, as CEO and founder, Kristy Carr, departed earlier this month due to failure to comply with reasonable board directions. The company is down 36.7 per cent year to date.

Coming up today

US: Q1 GDP, Pending Home Sales, Chicago Fed Activity Index, Initial Jobless Claims; Australia: Costa Group AGM; NZ: Earnings: Mainfreight, Pacific Edge, Tower NZ, Fonterra Q Update, Vista Group Annual Meeting.

For more information on the latest market moves, get in touch with Jarden.

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All market pricing and announcements are sourced from Refinitiv, NZX and ASX.