In today’s top stories, leaked emails would seem to show that Elon Musk thinks Twitter is worth under $20bn, less than half what he paid for it. Elsewhere, Silicon Valley Bank has been scooped up by First Citizens, the largest family-owned bank in the US. Baidu has unveiled the latest incarnation of its Ernie chatbot, while crypto groups are capitalising on China’s demand for digital assets by expanding into Hong Kong. Lastly, the EU’s Net Zero Industry Act must do more and go further if it is to compete with the US’ IRA, with some two-thirds of European battery production at stake.
First Citizens takes control of SVB
Tech-focused lender Silicon Valley Bank (SVB) is being taken off US regulators by First Citizens [FCNCA] for up to $500m in stock. The largest family-owned bank in the US will take on all $128bn of SVB’s deposits and loans, while roughly $72bn of SVB’s total $110bn in assets will be bought at a discount of $16.5bn. But according to Redmond Wong, market strategist at Saxo Markets, the move doesn’t solve the bigger problem, namely, “deposits leaving smaller banks for larger banks or money market funds”, Wong told Reuters.
Baidu unveils update to chatbot Ernie
Chinese internet search giant Baidu [BIDU] presented an update to its AI-powered chatbot behind closed doors on Monday. According to images seen by Reuters, Ernie demonstrated a wider range of skills and capabilities than it did when it debuted a couple of weeks ago Back then, the public response was one of disappointment, sparking a 10% drop in the Baidu share price. However, analyst reaction, including from Bank of America, has been more positive.
Twitter halves in valuation
Less than six months after Elon Musk bought Twitter for $44bn, the social media site is apparently worth less than $20bn, suggest emails leaked to the Wall Street Journal. “I see a clear, but difficult, path to a >$250bn valuation,” Musk reportedly wrote. One challenge Musk faces is convincing users to pay for Twitter Blue. The verification programme brought in just $11m in mobile subscriptions in its first three months, according to data from intelligence firm Sensor Tower.
Crypto companies target Hong Kong
Crypto groups are capitalising on China’s demand for digital assets by expanding into Hong Kong, reported the Financial Times. The city is deemed to be more crypto-friendly than Singapore and companies including Binance are actively hiring there. “A lot of the Chinese capital is looking for smarter, safer ways to invest... being in Hong Kong naturally makes more sense than anywhere else,” Henry Liu, chief executive of crypto exchange BTSE, told the paper.
EU battery makers get a boost
Over two-thirds of European battery production is at risk from generous subsidies offered through the US Inflation Reduction Act, according to research by leading clean transport campaign group Transport & Environment. But the EU’s plan to counter US subsidies, its Net Zero Industry Act, has been met with a lukewarm response. “We are encouraged by what we are seeing. Now it’s time to go from ambition to action,” said Tom Jensen, CEO of Norwegian battery maker Freyr [FREY], told the Financial Times.