This Week's Business Roundup / Judge cancels Gulf of Mexico drilling leases / Fireblocks raises $550M

Plus, Apple regains title as No. 1 smartphone brand in China.

Inside.com Part of   Network January 28, 2022

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This Week's Business Roundup Hello Readers! Welcome to this week's Business Roundup, where I summarize the top three business trends/stories of the week. Following our rule of three, this week we have: More Earnings, EV Big Bets, and Fed (potential) rate changes. More Earnings: This week we got Q4 and full-year earnings from some of the biggest names in tech, energy, consumer goods, food, telecoms, and manufacturing. Apple, Microsoft, Chevron, Tesla, and Samsung reported record revenues, and Apple regained its title as the No.1 smartphone brand in China with 23% of the market. EV Big Bets: Automakers are making big bets on EVs and hybrids. This week GM, China's Great Wall Motors, and the Renault-Nissan-Mitsubishi alliance all shared they would be investing billions to develop or scale the production of their EV and hybrid fleets. Customers also can't seem to get their hands on the vehicles fast enough. Ford this week said it was putting a pause on new orders for its Maverick budget hybrid truck due to high demand and needing to ensure it can fulfill the orders it already has. The automaker plans to resume taking new orders for it in the summer. Tesla delivered almost 1 million vehicles in 2021. The Fed (potential) rates changes: The Federal Reserve signaled plans to raise interest rates in mid-March during a live post-meeting press conference on Wednesday. Fed Chairman Jerome Powell stated the central bank has approved one final round of asset purchases, which will bring the stimulus program to an end by March. The bank released a one-page document outlining principles to begin the process of reducing its $9T securities portfolio. Bonus: The U.S. GDP grew ~7% in Q4 despite the rise in cases of the Omicron variant of the COVID-19 virus fueled by consumer spending. Full-year GDP growth was ~6%, the highest since 1984. What stories would be in your top three? As always, I love to hear your thoughts on any of this week's stories. Feel free to reach out at vanessa@inside.com or on Twitter @Ms_Omeo. To see all Inside Business newsletters from this week, click here. Have a wonderful weekend! Vanessa

Robinhood released its Q4 and full-year earnings on Thursday, beating analysts' expectations on revenue but missing on earnings. The trading platform reported Q4 revenue of $363M, a 14% increase YoY. It reported a net loss of $423 or 49 cents per share for the quarter, a drop from its net income of $13M a year earlier. The company also reported its monthly active users (MAUs) dropped to 17.3 million in Q4 from 18.9 million in Q3. However, its MAUs increased 48% YoY. More: Full-year revenue came in at $1.82B, a ~90% increase YoY. It ended the year with $3.69B in losses or $7.49 per share, down from the $7M profit reported in 2020. Funded accounts on the platform grew to 22.7 million as of Dec. 31, 2021, an 81% increase YoY. Its assets under custody rose 56% to $98B as of Dec. 31, 2021. The company is projecting Q1 2022 revenue to be less than $340M, expecting a 35% YoY decrease compared to Q1 2021, which was spurred by the GameStop trading frenzy. Robinhood shares dropped ~15% in after-market trading on Thursday following the report. It closed at $12.73 on Friday, up ~10% for the day. Note: Inside.com's founder and CEO, Jason Calacanis, is an investor in Robinhood.

Oil rigs in the Gulf of Mexico near Port Fourchon, Louisiana On Thursday, a federal judge canceled over 80 million acres of oil and gas drilling leases in the Gulf of Mexico. Judge Rudolph Contreras of the U.S. District Court for the District of Columbia ruled that the Biden administration did not consider the impact the drilling would have on climate change when it auctioned the leases. The lease sold for over $190M and drew bids from oil giants like Chevron and Exxon Mobil. More: In the lawsuit brought by different environmental groups led by Earthjustice, plaintiffs alleged that the Interior Department used outdated environmental analysis conducted during the Trump administration that stated that more drilling in the Gulf would not increase greenhouse gas emissions. During his presidential campaign, President Joe Biden promised his administration would stop issuing new drilling leases on public lands and in federal waters. The Interior Department, through spokeswoman Melissa Schwartz, said it was reviewing the judge’s decision. According to the Energy Information Administration, the Gulf of Mexico generated about 15% of U.S. oil production and 5% of natural gas output.

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Chevron released its Q4 and full-year earnings on Friday, beating revenue expectations but falling short on profits. The oil giant reported Q4 revenue of $45.9B, an ~84% increase YoY. Net income came in at $5.1B or $2.63 per share, up from $665M in losses reported a year earlier. Chevron's full-year revenue was $155.6B, a ~65% increase YoY. The company reported full-year earnings of $15.6B, or $8.14 per share, up from $5.5B in losses from 2020. More: Chevron increased its dividends payment by 8 cents to $1.42 per share, marking the company's 35th straight year of increased payout to shareholders. Chevron bought back $1.4B of its stock in 2021 and plans to repurchase an additional $5B in 2022. U.S. oil prices reached $87 per barrel on Thursday, trading at some of its highest levels since 2014. Oil prices are expected to cross $100 per barrel this year. Chevron shares fell ~5% by midday trading. It closed at $130.61, down ~3.5% for the day.

Alphabet Inc. CEO Sundar Pichai at a Google for India event Google's parent Alphabet plans to invest up to $1B in a partnership with Indian telecom giant Bharti Airtel. Alphabet is buying a 1.28% stake in Airtel for $700M and will invest an additional $300M in multi-year commercial deals. The partnership is part of Google's strategy to build its presence in India's growing digital market. This includes offering affordable access to smartphones to customers and Google's cloud ecosystem to businesses. More: Google is buying 71.2 million shares of Bharti Airtel at $9.76 a share, a 3.8% premium on the stock's closing price on Thursday. Google's investment would still need to be approved by regulators. This is a continuation of Google's investment in India. In 2020, Google purchased an ~8% stake in another telecom provider, Jio Platforms, for $4.5B. These investments are from Alphabet's $10B fund earmarked in 2020 to strengthen the company's ties in India.

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Fireblocks, a crypto custody platform, has raised $550M in Series E funding round at an $8B valuation. The blockchain security provider has raised $1B to date; investors include Spark Capital, Sequoia, D1 Capital, and Tenaya Capital. The new funding makes Fireblocks the highest valued digital asset infrastructure provider. More: Fireblocks allows financial institutions to provide custody of digital assets, ensuring coins and tokens are safe. As of Jan. 2022, Fireblocks has handled over 1,000 cryptocurrencies and over $2T worth of assets across 25 blockchains. According to Blockdata, total assets under custody in digital markets are at $223B as of January. Fireblocks plans to use the new funding to expand its team and improve its offerings. Digital asset custody firms received over $4.5B in investments in 2021, about 20% of all funding that went to the crypto/blockchain industry.

Great Wall Motors SUVs at the Delhi Auto Expo China’s Great Wall Motor plans to invest $1.9B in Brazil in the next 10 years to produce electric vehicles and hybrids. The automaker plans to transform a former Mercedes-Benz factory in São Paulo into an export hub in Latin America. When completed, the factory is expected to create 2,000 jobs in the area and produce 100,000 vehicles each year. More: Great Wall also plans to release a new product line of electric and hybrid SUVs and trucks. According to Great Wall, this will be the first factory dedicated to only electric and hybrid vehicle production in Latin America. Great Wall plans to have 60% of vehicle inputs sourced from local suppliers in Brazil. Also, all the hybrids produced will have flex-fuel engines that can run on both gasoline and ethanol.

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Vanessa Omeokachie is a Researcher at Inside. Her interests include finance, tech, and startups. In her free time, she enjoys reading, hiking, attending music festivals, and traveling.  Connect with her on Twitter @Ms_Omeo. Editor Aaron Crutchfield is based in the high desert of California. Over the last two decades, he has spent time writing and editing at various local newspapers and defense contractors in California. When he's not working, he can often be found looking at the latest memes with his kids or working on his 1962 Ford.

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