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3/17/21: What’s Going On

News from around the business world.
(GagliardiPhotography)
(GagliardiPhotography)
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“American Airlines Group Inc. raised $10 billion of debt last week to repay government loans and keep its business running as the economy recovers. The deal also boosted the company’s debt by about 20%, transferring much of that risk onto debt investors. American has survived the pandemic by taking on $22 billion of new debt, bringing its total obligations to $50 billion. Borrowing saved the company—and others like Carnival Corp. and AMC Entertainment Holdings Inc.—from bankruptcy, but it comes with higher interest costs that could affect profitability for years to come.”

“The Federal Reserve is likely to reaffirm its plans to maintain easy-money policies until the U.S. economy recovers further from the effects of coronavirus pandemic, while also noting the brightening outlook for growth…[Chairman Jerome] Powell and his colleagues have repeatedly said the central bank will hold overnight interest rates near zero until the economy reaches maximum employment and sustained 2% inflation—conditions they don’t expect to meet this year. The Fed also plans to continue buying at least $120 billion a month of Treasury debt and mortgage-backed securities until ‘substantial further progress’ is made toward those objectives.”

“Uber Technologies Inc. said it will grant its U.K. drivers an employment status entitling them to vacation pay and pension contributions, a costly shift in one of its largest overseas markets amid a global debate over the treatment of gig-economy workers. The changes may presage legal wrangling, however, because the ride-hailing company says it will guarantee its drivers the U.K.’s minimum wage only after they have accepted a trip—not from the moment they sign into the app and are ready to work, as labor activists have demanded.”

Companies Raising Capital
NameAmountDescriptions
PatSnap$300 MillionIP Analytics Platform
Incredibuild$140 MillionSpeeding Up Games And Other Software Development
PayFit$107 MillionPayroll And HR Platform

“Israeli online broker eToro—one of the big beneficiaries of the recent day-trading boom—has announced it will go public via a merger with a special purpose acquisition company at a valuation of $10.4 billion.”

“Samsung Electronics Co. warned it’s grappling with the fallout from a ‘serious imbalance’ in semiconductors globally, becoming the largest tech giant to voice concerns about chip shortages spreading beyond the automaking industry.”

“The Oxford startup behind AstraZeneca PLC’s Covid-19 vaccine has raised $168 million in new funding, which it plans to use to adopt its vaccine technology for the treatment of other diseases.”

“France’s competition regulator rejected a plea from advertising companies and publishers to block Apple Inc.’s plan to restrict tracking of individuals’ mobile-app usage.”

“Toyota Motor Corp. and Honda Motor Co. are halting production at plants in North America as the pandemic’s continuing effects on the global supply chain create shortages of essential components.”
“Bilibili Inc., the operator of a video app popular with young Chinese videogame and animation fans,is capitalizing on a huge run-up in its shares to raise nearly $3 billion in Hong Kong.”

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