Happy Super Bowl Sunday. Here are the top business stories to know for the week ahead. — Charlotte Cowles
What’s Up? (Jan. 31-Feb. 6)
Bezos Bowing Out
Twenty-seven years after founding Amazon, Jeff Bezos is handing over his job as chief executive to one of his protégés, Andy Jassy, who leads the company’s lucrative cloud computing division. Mr. Bezos will become Amazon’s executive chairman and take part in high-level decisions, but it’s still the end of an era for the country’s biggest e-commerce retailer. He’s leaving on a pretty high note: Amazon’s latest quarterly sales topped $100 billion for the first time, and the company’s value ($1.7 trillion) has made Mr. Bezos one of the world’s richest people. But there are challenges ahead as the business faces growing scrutiny from lawmakers and antitrust regulators over whether it wielded its clout illegally.
The Beginning of the End
Well, here’s something unsurprising: Shares of GameStop — the company that attracted an online stock-buying frenzy that threw markets into turmoil — fell back down to earth again, deflating to a small fraction of the value they held just a few days earlier. The same army of retail investors that spurred GameStop’s boom-and-bust cycle had also snapped up shares of underdogs like AMC Entertainment and BlackBerry, whose prices collapsed last week, too. The swift devaluation of so-called meme stocks, named for their flash-in-the-pan popularity on social media, has left investors wondering whom to blame for their losses. As the market stabilized, however, it had its biggest rally in months.
Will the GameStop saga change how stock trading is regulated? Perhaps. The newly confirmed Treasury secretary, Janet Yellen, held a meeting with top regulators on Thursday to discuss the growing prevalence of retail investing, i.e. stock trades made easy (and free) on apps like Robinhood and E-Trade. The upside of those platforms is that they make investing more accessible to regular (read: not Wall Street) people. But if the past few weeks have taught us anything, the whims of these individual stock traders can also lead to volatility that harms investors of all stripes.
What’s Next? (Feb. 7-13)
Stimulus en Route
The Biden administration and congressional Democrats are charging ahead with their sweeping $1.9 trillion coronavirus relief bill, and will hammer out the final details this week. To avoid potential blocks, Senate Democrats passed a budget framework that will allow the aid package to pass with a simple majority and no Republican support. President Biden said he still hoped to find some compromises with Republicans, who have balked at the bill’s scope and price tag. But he’s not willing to waste time courting their votes, or budge on cornerstone provisions like aid to schools or $1,400 direct payments to qualifying Americans. And considering the dismal report on January jobs, he says there isn’t a moment to lose.
The Business of Elections
The voting technology firm Smartmatic has filed a $2.7 billion defamation lawsuit against Fox News, three of its anchors, and the lawyers Rudolph Giuliani and Sidney Powell. The company is accusing the defendants of damaging its business and reputation by peddling false theories about its services as part of their discredited claims of widespread fraud in the 2020 election. In its complaint, Smartmatic argues that Mr. Giuliani and Ms. Powell, who represented former President Donald J. Trump, “created a story about Smartmatic” and that “Fox joined the conspiracy to defame and disparage Smartmatic and its election technology and software.”
A Weird Year for Ads
The cost of Super Bowl ads stayed similar to last year’s — about $5.6 million for a 30-second spot. It’s the first time the rate hasn’t risen significantly in over a decade, and it took much longer than usual for CBS to sell all the slots. After all, it’s a strange time for marketing, and advertisers face a dilemma: Allude to the pandemic, and remind viewers of a nightmare they were hoping to escape for a few precious hours? Or ignore it, and risk coming across as tone deaf? The ads will be dominated by pandemic-popular businesses like the delivery service app DoorDash, the takeout Mexican chain Chipotle and the recently beleaguered investment platform Robinhood.