Today's big stories

Facebook’s earnings are at risk as several large companies boycott its advertising platform
Morgan Stanley thinks investors are overlooking one country's stocks in particular – Read Now
Oil producer Chesapeake Energy filed for bankruptcy

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Revolted

What’s Going On Here?

What does Facebook want? Advertisers' money! When does it want it? Oops, too late: some of the world’s biggest companies boycotted the platform this weekend to protest the social media giant’s lackluster hate speech policies.

What Does This Mean?

Facebook promised late on Friday to both ban hate speech in ads and label any posts that violate those policies. But the company still didn't commit to removing the posts altogether, which may have been the last straw for organizations that’ve long argued Facebook isn’t doing enough to halt the spread of bigotry.

Spirits magnate Diageo, household products giant Unilever, and soft drink behemoth Coca-Cola were just some of the big-name businesses that announced they’d be pulling one to six months’ advertising spend from Facebook’s platform. They might be hoping the losses will force the company to take further action, or else risk losing more revenue and more investors.

Why Should I Care?

For markets: You’ll come crawling back.
Even high-profile walkouts aren’t going to cripple Facebook: the company serves eight million ad partners, and the top 100 of those only make up 20% of revenue. Case in point: Unilever spent $12 million on Facebook ads in the first half of 2020, but the advertising giant’s expected to have earned $35 billion overall in that time. And while some analysts worry greater regulatory pressure could crimp Facebook’s potential profits, optimists might point out that the same argument was made after the Cambridge Analytica scandal, and not much came of it (tweet this).

The bigger picture: Yesterday’s news.
Facebook is one of the most valuable stocks in the US, which means swings in its price can influence the stock market at large. And since that price fell 8% on Friday, investors' fears that rising US coronavirus cases would disrupt the economic recovery might’ve been compounded. Investors often have short memories, mind you, and a further 3% fall in Facebook’s share price on Monday appeared to be offset by another shiny thing: China’s first monthly rise in industrial business’ profits since November.

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2/3 Premium

Singapore Sling

What’s Going On Here?

Singapore’s biggest stocks may have fallen 20% this year, but investment bank Morgan Stanley reckons the city-state’s shares could prove a potent cocktail in the coming months.

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3/3

Goodbye, Fuel World

What’s Going On Here?

Chesapeake Energy is running on empty: the oil and gas firm filed for bankruptcy protection on Sunday.

What Does This Mean?

The US oil company – now the biggest of recent collapses – was once ahead of the curve in US shale drilling, not to mention a big player in the natural gas market. But as the global economy succumbed to the effects of coronavirus, and as oil markets succumbed to the effects of the Saudi-Russian price war, the price of the murky nectar collapsed to record lows. Falling energy prices make for lower profits in the oil and gas business, and Chesapeake – facing debts piled sky high from years of expansion – was overwhelmed. Unable to meet its obligations, it had little choice but to declare itself broke.

Why Should I Care?

For markets: Don’t forget about us!
Chesapeake agreed to a plan that’d simultaneously see it slash about $7 billion in debt and raise an additional $900 million of emergency cash. But that still leaves some $2 billion of debt outstanding, when the company’s worth just $100 million. Having filed for bankruptcy protection, the company will likely restructure in order to repay its remaining creditors, even if only partially. Meanwhile, it might reignite the debate over whether US energy firms should be bailed out: the government was happy to cut checks for the airline industry – one of oil companies’ biggest customers – after all.

The bigger picture: Lucky guess…
Another oil giant, BP, announced on Monday it’d agreed to sell its petrochemicals business to Luxembourg-based rival Ineos for $5 billion. Like its competitors, BP’s profits have been buffeted by weak energy prices. But the company sensed the winds changing a while ago: it promised it’d sell $15 billion worth of assets to help accelerate its shift towards green and renewable energy by 2021 – and it’s delivered on that commitment a year ahead of schedule.

Take action: How to safely invest in the oil industry.

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💬 Quote of the day

“In a gentle way, you can shake the world.”

– Mahatma Gandhi (an Indian lawyer, anti-colonial nationalist, and political ethicist)

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🤔 Q&A · RE: Cool, Calm, Collected

“What happens in an initial public offering (IPO)?”

– Ioli in Cyprus

“First up, the company that wants to IPO chooses which partners it wants to work with – chiefly, the investment banks that’ll advise on and manage the share sale. Once that’s set, the company and its entourage of bankers will meet with big investors in hopes of convincing them to buy in. It’ll share detailed financials and forecasts, which the investors will use to assess how much they’d be willing to pay for a share, as well as how many they’d like. The bankers then work out who’s willing to pay what, and settle on a single starting share price for the company. Finally – on the day the shares are due to list on the stock market – investors are allocated their shares at the agreed-upon price, and other investors can buy in too.”

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🏡 It’s good to be back

You’ve been patient. You’ve been strong. You’ve been a constant source of delight. And we’re proud to say we’re finally able to host our first in-person event since before lockdown. So if you’re based in Perth, do make the most of it. And if you’re not, sit tight: we’ll have something for the rest of you the moment it’s safe.

🌍 Global: Finimize Live AMA – 1.30pm UK Time, June 30th
🇬🇧 UK: Estonia’s Startup Ecosystem – 5pm UK Time, July 1st
🇦🇺 Australia: Women & Money (in-person) – 5.30pm Perth Time, July 22

📚 What we're reading

Meet the man responsible for a real pandemic (Kotaku)
Global outbreaks have always inspired artists (Atlas Obscura)
Up for a riddle? No cheating now… (Popular Mechanics)

Finimize - 🖕 Coke gives Facebook the finger

Today's big stories

Revolted

What’s Going On Here?

What Does This Mean?

Why Should I Care?

Singapore Sling

🚀 The lowdown on low fees

Goodbye, Fuel World

What’s Going On Here?

What Does This Mean?

Why Should I Care?

💰 Pay less, keep more

🏡 It’s good to be back

Older messages

🎟️ Virtual Event Invite

🎉 Thanks a million, Newsletterest

😟 Goldman sees stock drop

😵 RIP Wirecard

🌱 Green shoots of a global recovery

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