Welcome to the Weekly Scan. Here’s what we’re following for the week of June 7, 2021.
Way out there. Amazon founder and multi billionaire Jeff Bezos and his brother Mark will be among the first passengers on Blue Origin’s first-ever human launch in July, 2021. Blue Origins is Bezos’s space exploration company. The brothers will be joined on the spacecraft New Shepherd by a special auction winner. People have been bidding on a seat for the space flight since May, with the highest bidder so far pledging a reported $2.8 million.
- The takeaway: Bezos joins Virgin Galactic’s Richard Branson and Elon Musk of SpaceX and Tesla in the race to privatize space exploration. Both Branson and Musk have launched numerous space flights with human pilots. Most recently, SpaceX successfully sent four astronauts to the International Space Station aboard its Crew Dragon ship. While the New Shepherd, a reusable suborbital rocket, has reportedly made 15 unmanned space trips, this will be its first with a human cargo.
Facebook takes it offline. Facebook will reportedly start cracking down on posts from politicians that break its rules, reversing its current policy of allowing politicians’ posts to remain on the site regardless of content. Going forward, if a politician’s post violates Facebook’s guidelines prohibiting harassment, discrimination, or harmful speech, it could be taken down. Previously, Facebook has avoided interfering with politician’s posts under the assumption that those posts could be newsworthy.
- The takeaway: Facebook’s decision follows its move to ban President Trump from the platform for the next two years. The platform first banned Trump following his supporters’ January 6, 2021 riot on the United States capitol. Facebook has increasingly taken steps to stop the spread of misinformation on its site in response to criticism that it’s been too lenient. Before and after the 2020 presidential election, Facebook suspended all political ads from the platform in an attempt to curb misinformation.
Everything He Wanted. Universal Music Group, a global music company, is reportedly in talks with hedge fund manager and activist investor William Ackman’s special purpose acquisition company (SPAC) Pershing Square Tontine Holdings, to take the music company public. Universal is owned by media conglomerate Vivendi SE. The deal would give Ackman a 10% stake in Universal, which is home to major names in music including Billie Eilish, the Weeknd, Lady Gaga, and Taylor Swift. Last year, Chinese company Tencent Holdings also doubled its stake in Universal to 20%. If the $40 billion deal goes through, it would be the largest SPAC deal in history.
- The takeaway: Increasingly, companies have chosen to go public via SPACs. In 2021 so far, 330 SPACs raised $104 billion, exceeding last year’s total of more than $80 billion. Generally, a SPAC is a shell company with no operations of its own, typically set up by wealthy investors or hedge funds, that goes public, lists on an exchange, and then acquires or merges with a functioning private company. That company becomes public through the merger, since the shares of the SPAC are already publicly traded. By using this structure, companies can potentially save time, and millions of dollars in legal, listing, and underwriting fees to go public.
Hacking and meatpacking. The world’s largest meat producer JBS SA was the victim of a cyberattack last week that caused it to temporarily shut down all of its beef plants in the U.S. Additionally, all JBS meat packing facilities in the U.S. were disrupted on some level by the attack. Over the weekend of May 29, 2021, hackers reportedly attacked the computer networks at JBS, which is based out of Sao Paulo, Brazil. The cybercrime group suspected of attacking JBS is based in Russia, according to sources. JBS is the top provider of beef to the U.S., accounting for 23% of the country’s capacity. While the attack hasn’t had an immediate impact on consumers, they could see an increase in meat prices at the grocery store. President Biden charged his administration with doing what it can to make sure the nation’s beef supply doesn’t take a major hit.
- The takeaway: Ransomware attacks, in which hackers access a company’s information and lock the company out in demand for compensation, have increasingly become a problem for businesses. Just weeks ago, hackers from the cybercrime gang DarkSide allegedly stole 100 gigabytes of data from Colonial Pipeline in a ransomware attack. The hack caused the pipeline company, which provides 45% of gasoline, jet fuel, and diesel to the East Coast, to shut down temporarily. In March, the Department of Homeland Security announced a 60-day sprint against ransomware attacks. The Department of Justice has also created a task force to investigate.
A jump in jobs. The U.S. added 559,000 jobs in May, 2021, falling below the projected addition of 671,000 jobs. The unemployment rate, meanwhile, fell to 5.8% from 6.1% in April. The unemployment rate slightly beat the expected rate for May, 5.9%. The April jobs report fell well below expectations, with the U.S. adding only 278,000 jobs versus the 1 million estimate. The hospitality industry led the May jobs report in job creation, adding 292,000 new jobs.
- The takeaway: The latest jobs numbers could be an indication that the economy is recovering from the pandemic, although slowly. More than half of the hospitality industry jobs added in May were at restaurants and bars, as more states loosen restrictions set in place for Covid-19. The Federal Reserve (the Fed) has indicated that it will not reverse monetary policies that support the economy set in place during the pandemic, such as keeping interest rates near 0%.
Find out what we covered in last week’s Scan.