Broken deal between exchanges extends crypto crisis, layoffs at Meta and what matters in the market

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Broken deal and worsened crisis

The announcement by Binance, the world’s largest cryptocurrency exchange, that it was buying FTX, another industry giant, did not last a day.

In reaction to the continuation of the crisis, the prices of cryptocurrencies continued in free fall.

Binance said it backed out of the purchase after carrying out a risk analysis (a process known as due diligence) on the transaction and also cited “alleged investigations” by the SEC (US CVM) into FTX.

The non-binding agreement announced Tuesday did not involve FTX’s US operations, but clarified that the transaction was subject to review.

Understand: the FTX, which came to be evaluated in $32 billion (R$ 165 billion) in January, is experiencing a severe liquidity crisis, with large investors withdrawing their investments from the brokerage (we explain in more detail in the last edition).

• According to the Wall Street Journal, FTX has a hole in $8 billion (R$ 41 billion) to cover.

Burning sector: Crypto quotes have already been falling since the FTX liquidity crisis erupted on Sunday, but the losses have widened over the past 48 hours.

• On Wednesday night, bitcoin plummeted 15%for US$ 15.7 thousandlowest price since November 2020.

• Ether, the second most traded, tumbled 17%for US$ 1.1 thousandalso at the lowest level since the end of 2020.

Target will lay off 11 thousand

Meta (owner of Facebook, WhatsApp and Instagram) announced this Wednesday (9) that it will dismiss 13% of your team, which corresponds to more than 11 thousand employees.

Until this Wednesday, the company did not disclose information about layoffs in Brazil. Last month, she warned employees that she would close one of her offices in São Paulo on the grounds of meeting new ways of working. Meta said there were no layoffs at the time.

The mass layoff was the company’s first in 18 years and the biggest in a current wave of cuts by tech companies, hit by high interest rates and a global slowdown.

Last week, Twitter decided to lay off 3,700 employees, about half of the company’s workforce. In recent days, however, the network has called dozens of them back.

On Wednesday, Meta CEO Mark Zuckerberg told employees that the company’s revenue had been hurt by the slowdown, increased competition and the loss of ads.

I got it wrong, and I take responsibility for that.

What explains: in addition to the factors that end up affecting the entire technology industry, Meta lives its “astral hell”:

• Investments in the metaverse sucked $9.4 billion (R$ 50 billion) from the company’s coffers this year and left shareholders angry. They claim that the concept is still in the abstract field and the Meta has more pressing challenges to prioritize.

Bradesco loses BRL 32 billion in one day

After having registered a profit in the third quarter well below market expectations, Bradesco suffered the biggest daily drop in the value of its shares in more than 20 years.

In numbers: preferred shares fell 17.38%for BRL 15.35lowest value since October 2020.

• In a single day, the bank lost BRL 31 billion in market value, an amount that exceeds the market value of companies such as CCR, Assaí and Braskem.

• The bad mood also hit the stocks of other private banks. Santander Brasil, which also reported a bad balance two weeks ago, plummeted almost 6%🇧🇷 Itaú, which presents figures this Thursday, fell 4.8%🇧🇷

Which explains the negative reaction: Bradesco recorded net income of R$ 5.22 billion in the third quarter, a drop of 22.8% compared to the same period in 2021. The market expected a profit of R$ 6.76 billion.

• A good part of the negative result can be explained by the 36.8% increase in expenses with provisions (money set aside to cover defaults) in relation to the previous quarter.

in videoconferencebank executives said they expected to emerge throughout 2023 from what they called a “perfect storm” in the third quarter, but that profit should remain under pressure in the coming quarters.

In the purse: the results recorded so far in the midterm elections in the USA have brought down indices around the world and also affected the Ibovespa, which has dropped 2.22%, to 113,580 points.

More on bank balance sheets:

The Bank of Brazil recorded adjusted profit of BRL 8.36 billion between July and September, a leap of 62.7% over a year ahead of and above market expectations.

• The institution even raised its forecasts for profit and credit expansion in 2022.

• BB has been less affected than other banks this year by the composition of its credit portfolio, which is more linked to agriculture and, therefore, considered less risky.

Twitter “official” badge (11/09/2022 – 11/09/2022)

On Wednesday, Twitter began using an “official” seal below the profiles of some users. During the day, Elon Musk, the new owner of the network, said he “killed” the novelty.

Please keep in mind that Twitter will be doing a lot of dumb things in the next few months. Let’s keep what works and change what doesn’t.

Understand: announced by an executive on Tuesday, the seal would serve to verify government profiles, companies, media groups, content editors and some public figures – in other words, the same function that the blue seal had until Musk took over the company.

The monthly subscription plan for profiles to get the blue badge and other benefits is in effect, and Musk said he will be the true leveler of the social network.

• In the US, fake accounts of NBA player Lebron James and sports journalist Adam Schefter – already suspended – received the seal.