Sunday News Wrap for Business People|News Curation

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Facebook taken to court after stock plunge wipes out $120 billion of shareholders’ wealth

Facebook Inc and its chief executive Mark Zuckerberg were sued on Friday in what could be the first of many lawsuits over a disappointing earnings announcement by the social media company that wiped out about $120 billion of shareholder wealth.The complaint filed by shareholder James Kacouris in Manhattan federal court accused Facebook, Zuckerberg and Chief Financial Officer David Wehner of making misleading statements about or failing to disclose slowing revenue growth, falling operating margins, and declines in active users.

Kacouris said the marketplace was “shocked” when “the truth” began to emerge on Wednesday from the Menlo Park, California-based company. He said the 19 percent plunge in Facebook shares the next day stemmed from federal securities law violations by the defendants.

The lawsuit seeks class-action status and unspecified damages. A Facebook spokeswoman declined to comment.

Shareholders often sue companies in the United States after unexpected stock price declines, especially if the loss of wealth is large.

Facebook has faced dozens of lawsuits over its handling of user data in a scandal also concerning the U.K. firm Cambridge Analytica. Many have been consolidated in the federal court in San Francisco.

Thursday’s plunge also hit Zuckerberg’s bottom line.

Zuckerberg had been tied with Warren Buffett as the world’s fourth-richest person, but the Berkshire Hathaway Inc chairman’s current $83 billion fortune tops Zuckerberg’s $66 billion, Forbes magazine said.

Buffett now ranks third among the world’s billionaires, while Zuckerberg is sixth.

Facebook shares fell another 0.8 percent on Friday, closing at $174.89 on the Nasdaq.

The case is Kacouris v Facebook Inc et al, U.S. District Court, Southern District of New York, No. 18-06765.

Reliance Jio Q1 results beat estimates, net profit grows 20% to Rs 612 crore

The Mukesh Ambani-led Reliance Jio exceeded analysts’ expectations to post a net profit of Rs 612 crore in the June quarter of the current fiscal. The telecom disruptor registered a sequential increase of 19.9 per cent in net profit during the Q1 FY19 as compared to Rs 510 crore in the Q4 of financial year 2017-18. The telecom operator saw its operating revenue grow 13.8 per cent quarter-on-quarter to Rs 8,109 crore during the quarter ended June 30, 2018 as opposed to Rs 7,128 crore in the March preceding quarter.

For the quarter under review, Reliance Jio posted standalone EBITDA (Earnings Before Interest, Tax, Depreciation, And Amortisation) of Rs 3,147 crore and EBITDA margin of 38.8 per cent. This amounts to 16.8 per cent increase in standalone EBITDA which stood at Rs 2,694 crore in the Q4 FY18, and an increase of 101 basis points in EBITDA margin from 37.8 per cent during the same quarter.

As on June 30, 2018, Jio’s subscriber base reached 215.3 million from 186.6 million on March 31, 2018, according to a statement by the company. The company has added 92 million subscribers in the past one year, and this number is increasing on account of its postpaid plans and JioPhone, the statement further said.

The average revenue per user (ARPU) for Reliance Jio during the June quarter of 2018-19 reached Rs 134.5 per subscriber per month, which is the lowest the company has seen since its inception. The waiver of Jio Prime membership fee and reduced postpaid tariffs were held responsible for the decline in ARPU.

Reliance Jio claimed that consumer activity on its network grew during the June quarter, with a user consuming 10.6GB data and 744 minutes of voice calling every month on an average. The data usage trend was attributed to rise in video comsumption which increased to 340 crore hours per month according to the statement.

“We doubled our customer base and most user metrics in the last 12 months. 215 million customers within 22 months of start is a record that no technology company has been able to achieve anywhere in the world. Jio has built an ecosystem for digital services and its affordable and simplified pricing strategy offers every Indian a chance to experience the “power of data”. FTTH and Enterprise services with strong fibre backbone across the country would further establish Jio’s leadership as a digital services provider,” Reliance Industries Chairman and Managing Director Mukesh Ambani commented on the financial results.

He further added, “The continued strength in financial results of Jio despite competitive intensity reinforces the customer uptake of its services and its strong operating leverage. Jio is committed to offering most value to all of its stakeholders.”

ITC stock hits fresh 52-week high on Q1 earnings, surpasses HUL in market capitalization

ITC on Friday surpassed FMCG major Hindustan Unilever in market capitalisation in morning trade, to become the fourth-largest company on BSE. The ITC stock rose up to 6.92 per cent to touch a high of Rs 307 on the BSE. Following the spike in the counter, the market capitalisation of the company stood at Rs 3,69,564.63 crore.

Q1 earnings of the firm took the stock to fresh 52-week high level of 307 level in trade today. ITC on Thursday reported a 10% rise in standalone net profit at Rs 2,818.68 crore for the first quarter ended June 30, 2018, aided by lower expenses, good growth in agri-business and other FMCG business despite decline in cigarettes sales.

The ITC stock closed 5.24% or 15 points higher at 302.20.  Its m-cap stood at Rs 3,69,259.15 crore.

Meanwhile, shares of HUL closed in the negative and slumped 0.64% to a low of Rs 1657.55. The market cap of the company stood at Rs 3,58,798.88 crore.

Following the uptick in the counter, ITC became the fourth largest company on BSE.

The top ten firms were led by TCS, followed by RIL, HDFC Bank, ITC, HUL, HDFC, Infosys, Maruti, Kotak, Mahindra Bank and SBI.

The stock of ITC is on rise for the seventh consecutive session and has surged 14.42 per cent since July 18.

The stock opened with a gain of 4.48% in trade today.

It has risen 14.86% since the beginning of this year and 4.69% during the last one year.

29 of 35 brokerages rate the stock “buy” or ‘outperform’, five “hold” and 1 “underperform”, according to Reuters.

According to market experts, the uptick in the ITC counter was largely owing to the strong first quarter results. Besides, the bullish trend in the broader market helped investor sentiment.

McDonald’s to recycle used cooking oil to power its trucks in India

Hardcastle Restaurants, the master franchisee for McDonald’s in the western and southern markets, is planning to recycle the used cooking oil and covert it into biodiesel for powering its refrigerated supply delivery trucks, a top company official said today.

The company is currently piloting the project in Mumbai, and is also looking at Bengaluru.

“We will soon bring all our 277 outlets under the recycling programme,” Vikram Ogale, director, supply chain and quality assurance, Hardcastle Restaurants (HRPL), told reporters here.

The company started the pilot last year, with Unicon Biofuels, and has so far scaled it up to cover 85 restaurants in the city, converting over 35,000 litres every month into biodiesel, he said.

Ogale claimed the biodiesel made from the used cooking oil to be a cleaner fuel with 75 per cent lower carbon emissions than diesel over its entire life cycle.

Sandeep Chaturvedi, president of the Biodiesel Association of India, said HRPL and Unicon Biofuels have been working for the past one year to convert used cooking oil to biodiesel as per the Bureau of Indian Standards (BIS).

“The Biodiesel Association of India encourages all food companies to learn from this initiative and apply it to their business model,” he added.

Renu Satti steps down as Paytm Payments Bank CEO, named COO of new retail initiative

 

Paytm Payments Bank CEO Renu Satti has resigned from the role and will now head Paytm’s new retail initiative. Paytm will look for a replacement for Satti, who had taken over the CEO role last year.

“Renu Satti will be leading the charge as COO of this new (retail) initiative… She has already resigned from Paytm Payments Bank CEO position and the Bank will soon be recruiting a new CEO,” Paytm said in a statement.

In the past, Satti has built businesses ground up that include marketplace, movie ticketing and most recently Paytm Payments Bank.

“She has been a champion of new business launches and her acumen makes her a perfect candidate for leading this important launch,” the company said.

Under its ‘New Retail’ model, consumers will soon be able to discover nearby pharmacies, groceries and other shops to place an order and get instant deliveries.

Paytm is also building P2P logistics with a network spread across the country which will be utilised for intra-city deliveries, the statement said.

The company has already partnered with a large network of local shops, restaurants, pharmacies and groceries for accepting Payments and will soon extend New Retail’ services to them, it added.

“We will work with local restaurants, grocery stores and pharmacies to enable them for local ordering and delivery,” Paytm founder and CEO Vijay Shekhar Sharma said.

Local ordering is expected to become one third of Paytm orders and gross merchandise value (GMV) by 2020, he added.

 

 

news source: Business Today

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