Wall Street Breakfast: #RIPTwitter? | Seeking Alpha

Wall Street Breakfast: #RIPTwitter? | Seeking Alpha

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The problems of a post-Elon Musk Twitter (TWTR) could be reaching an existential level as speculation that the company will not continue in its current form grew Friday following another employee exodus.

Hundreds of workers, including many key software developers and engineers, decided to quit on Thursday rather than sign up for Musk’s “extremely hardcore” culture at the company, according to published reports citing sources and employee Slack messages.

The new Twitter chief set a 5 p.m. ET deadline Thursday for employees to click a link and commit to Twitter 2.0 and “working long hours at high intensity.” Instead, many employees decided to take the three months’ severance alternative.

In response to the exodus, Twitter is closing offices, as it did after the initial big wave of layoffs, as it determines who is still with the company.

“Effective immediately, we are temporarily closing our office buildings and all badge access will be suspended. Offices will reopen on Monday, November 21st,” the company said in a memo obtained by Bloomberg. “Thank you for your flexibility. Please continue to comply with company policy by refraining from discussing confidential company information on social media, with the press or elsewhere.”

Tweeting goodbyes: On Twitter Friday morning, the hashtags #RIPTwitter, #ApparentlyTwitter and #TwitterMigration were trending.

Accounts posted information on what other social media networks they could be found on, such as Mastodon, asked whether work accounts on Meta’s (META) Instagram should be created, and tweeted gallows humor farewells such as the “It has been a privilege” meme of the band playing in the movie Titanic.

Twitter employees also said their goodbyes and sent messages of support on the platform. Still, there is little sign of a meaningful decline in Twitter posts.

The inflection point?: The latest exodus comes after Musk initially fired half of the Twitter staff as he looked to make the company leaner and slash costs. A departure of top executives followed, then Musk reportedly fired a number of employees who had been critical of him in the company Slack. Yesterday’s decisions were enough for Musk to make moves to retain some staff.

As the “hardcore” deadline approached, Musk’s team held an in-person and videoconference meeting with key undecided employees, but as the deadline passed some began hanging up while the Tesla (TSLA) founder was still speaking, The New York Times reported.

He also appeared to soften his stance on remote work, saying in an e-mail he would no longer make the final decision personally on who could work remotely. But that may have backfired as he put manager jobs on the line for an employee’s remote performance, adding another level of job insecurity.

“Any manager who falsely claims that someone reporting to them is doing excellent work or that a given role is essential, whether remote or not, will be exited from the company,” he said. (8 comments)

Worse than Enron

John J. Ray III, the new boss of bankrupt cryptocurrency exchange FTX, criticized the “unprecedented” management of ex-CEO and founder Sam Bankman-Fried that ultimately led to the once-mighty firm’s demise, according to a court filing.

“Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here,” said Ray, who has more than 40 years of legal and restructuring experience, including overseeing Enron’s high-profile bankruptcy in 2001.

“From compromised systems integrity and faulty regulatory oversight abroad to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals, this situation is unprecedented,” he added.

Ray mapped out a number of poor management practices that took place within Bankman-Fried’s crypto empire, including FTX’s failure to “keep appropriate books and records, or security controls, with respect to its digital assets.” It also used unsecured group email accounts to access private keys, Ray noted, and used software to hide the misuse of customer funds.

U.S. Senators Elizabeth Warren (D-MA) and Dick Durbin (D-IL) have demanded the now-bankrupt cryptocurrency exchange FTX provide information to shed light on its practices and finances from 2019 to present.

“New revelations continue to shed light on what now appears to be an appalling case of greed and deception,” the lawmakers wrote in a letter. “The public is owed a complete and transparent accounting of the business practices and financial activities leading up to and following FTX’s collapse and the loss of billions of dollars of customer funds.” (4 comments)

OPEC on top

OPEC is “back in the driver’s seat” as the world’s top swing oil producer while U.S. shale growth has slowed, Hess (HES) CEO John Hess said. Hess told an investor conference in Miami that he sees U.S. oil production reaching ~13M bbl/day in the next few years before leveling off, as shale output is ticking lower due to inventory depletion, inflation and investor pressure to focus on returns over growth.

“Shale was thought of as a swing producer … the Saudis and the OPEC have waited this out. Now, really OPEC is back in the driver’s seat where they are the swing producer,” Hess said, even as OPEC lacks spare capacity to easily increase its production. The CEO expects U.S. oil output will rise by ~500K bbl/day this year and next, but many companies “have already hit the wall” with only about a decade of life remaining. (12 comments)

Hawks hit back

James Bullard, president of the St. Louis Fed, said that even with his “generous” assumptions that tend to favor a more dovish policy, “the policy rate is not yet in a zone that may be considered sufficiently restrictive.”

“To attain a sufficiently restrictive level, the policy rate will need to be increased further,” he said at an event hosted by Greater Louisville Inc. The central bank has increased its key interest rate by 375 basis points this year and has been shrinking its balance sheet in its fight to lower inflation. He said in remarks after the speech that he sees 5%-5.25% as a minimum level for rates.

Meanwhile, the yield curve inversion between the 2-year (US2Y) and 10-year (US10Y) Treasury notes deepened to its widest level in four decades. The spread between the 2-year and 10-year extended to a mark of -66 basis points, marking the deepest inversion since 1982. An inverted yield curve is usually a sign of recession. (3 comments)

Today’s Markets

In Asia, Japan -0.11%. Hong Kong -0.29%. China -0.37%. India -0.12%.
In Europe, at midday, London +0.64%. Paris +0.79%. Frankfurt +0.75%.
Futures at 6:30, Dow +0.18%. S&P +0.31%. Nasdaq +0.39%. Crude +0.13% to $81.75. Gold +0.23% to $1766.95. Bitcoin +1.58% to $16,780.3.
Ten-year Treasury Yield +3 bps to 3.80%

Today’s Economic Calendar

10:00 Existing Home Sales
10:00 E-Commerce Retail Sales
10:00 Leading Indicators
10:00 Quarterly Services Report
1:00 PM Baker-Hughes Rig Count

Companies reporting earnings today »

What else is happening…

Mortgage rates tumble to 6.61%, biggest drop since 1981.

Meta Platforms (META) has fired dozens for hijacking user accounts.

Amazon (AMZN) CEO says role eliminations will extend into 2023.

Binance CEO says he ‘may have been the last thing that poked’ FTX (FTT-USD) into collapse.

Goldman Sachs boosts terminal Fed rate forecast, still sees no recession.

Alibaba (BABA) jumps despite Q3 sales miss.

Ross Stores (ROST) stock rips higher on big earnings beat, bullish guide.


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