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The chips are down for Biden, while Springsteen tickets become anything but blue-collar

Planet Business: A Walmart ‘train wreck’ leads a spate of profit warnings

Not-so-splendid isolation: US president Joe Biden coughs during a virtual meeting with industry representatives about the Chips Act. Photograph: Brendan Smialowski /AFP

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Laura Slattery
Sat Jul 30 2022 - 06:10

Image of the week: Chips ahoy

Poor Joe Biden. He had Covid, he had the Covid cough, but he still had to show up for a virtual meeting with various industry types about the Chips Act — legislation proposing that $52 billion be pumped into US semiconductor production to lessen its near-total reliance on China and help manufacturers, well, manufacture. This effort will resolve both an economic security and a national security predicament, making it cheap at the price, if not quite as cheap as actual chips.

“America invented semiconductors, but over the years, we let the manufacturing of those semiconductors get sent overseas,” the US president said, effectively explaining why so many people are finding it impossible to buy a car. The European Union has its own Chips Act — a €43 billion push to eradicate supply chain woes — because if there’s one thing that everyone needs, it’s more chips. The problem is, they needed them about 18 months ago.

In numbers: Born to pay

$262

Average price fans of Bruce Springsteen have paid to see him in an upcoming series of American concert dates, according to Ticketmaster.

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11.2%

Percentage of the total tickets sold that are “platinum tickets” subject to a controversial practice known as “dynamic pricing”, where prices rise in accordance with higher demand (and, in theory, fall when interest slides).

$5,000

Prices that some fans saw for these dynamically priced tickets on the first day of sales. US publication Variety further estimated that in the case of one venue, the average cost of a platinum ticket was $903 ... before additional Ticketmaster fees, of course.

Getting to know: Adam Mosseri

Adam Mosseri, head of Instagram and formerly head of Facebook’s news feed, loves a spot of video. He did one this week admitting Meta-owned Instagram is “hearing a lot of concerns” about changes to the platform. Alas, his message did little to alleviate concerns that it actually wants to be a random, Facebook-esque mess.

Complaints about Instagram, which has been desperately copycatting rivals such as TikTok in recent years, have now reached a business-critical stage after Kylie Jenner and sister Kim Kardashian shared a “make Instagram Instagram again” post, asking if they could please just “see cute photos” of their friends. Perhaps mindful that Jenner prompted a $1.3 billion fall in Snap’s stock value in 2018 when she said she no longer used Snapchat, Mosseri was out on Twitter, replying to criticism.

But his insistence that Instagram will continue to “lean in” to videos, and users must go to the trouble of also favouriting the accounts they follow to ensure they see their posts, didn’t go down well. Is that the sound of laughter from TikTok HQ?

The list: Profits of doom

The second-quarter earnings season has brought with it a spate of profit and other warnings, almost as if the global economy is teetering on the brink of very bad times. So which companies have had to change their tune lately?

1. Walmart: The biggest retailer in the world by revenue triggered carnage across retail stocks this week by issuing what was described by one consulting firm as a “train wreck” of a profit warning.

2. Made.com: The UK furniture retailer has now had three profit warnings in less than a year. Chief executive Nicola Thompson said it was being “prudent” by taking a “conservative view” of the rest of 2022. It seems consumers are being prudent too.

3. Adidas: The footwear and sports clothing giant warned on profits on Wednesday for the second time in three months, with lockdowns and a consumer boycott of western brands in China to blame.

4. JD Wetherspoon: These aren’t easy times for Spoons: the chain of 800 pubs in Ireland and Britain, led by its pro-Brexit founder Tim Martin, recently flagged higher-than-expected losses for the year.

5. Deliveroo: The courier company won’t be making a profit this year either, but then it never does. Its recent unscheduled warning on revenues was, in fact, the opposite of a profit warning. Thanks to its keen subsidising of takeaways, it now expects to lose less as a result of, er, selling less.

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