Read this Thursday’s edition of the FolhaMercado newsletter (16) – 02/16/2023 – Market

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Neon is another one to lay off en masse

As in 2022, this year started with mass layoffs among Brazilian unicorns (startups valued at US$ 1 billion or more). This Tuesday, it was fintech Neon’s turn to join the list.

• The company confirmed the shutdowns, but did not provide further details. The Layoffs Brasil website, which gathers the number of cuts in startups, points to 200 layoffs.

Neon claims that the layoffs were based on performance assessment and reduction of sectors. According to the bank, the objective is to prepare for this year’s macroeconomic challenges.

As we showed you two weeks ago, the digital bank that has around 22 million customers announced BRL 331 million in financing through a FIDC (credit rights investment funds).

• The instrument allows the company to anticipate the receivables it is entitled to –in the case of Neon, credit card amounts– in exchange for a fee (understand how these funds work here).

Unicorn layoffs: this year, Loggi and C6 Bank also laid off hundreds of employees, according to Layoffs Brasil.

• In 2022, the list was large and includes 99, Loft, QuintoAndar, Facily, Ebanx, Market Bitcoin, Vtex, among others.

The cuts in technology happen at a time of high interest rates, which takes away the appetite for investments in the sector and forces companies to turn the key to business priorities: from high growth to efficiency and cash generation.

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Musk overexposure on Twitter

Have Elon Musk’s tweets been showing up more frequently for you in recent days? This doesn’t happen by chance.

Last Sunday (12), during the Super Bowl, a publication by US President Joe Biden ended up generating a rush among Twitter engineers, who spent the night working on the platform’s algorithm.

The reason: the publication in which the representative said he was rooting for the Philadelphia Eagles had more engagement than a similar tweet from the owner of the social network, Elon Musk – who has four times more followers than Biden.

• The case was revealed by the Platformer newsletter, by specialized journalists Casey Newton and Zoë Schiffer.

After realizing the “defeat” for Biden, the businessman deleted his tweet and flew to Twitter’s headquarters in California to meet in person with about 80 engineers, reports Platformer.

• The solution found was to create a tool that would ensure that Musk’s tweets – and only his – reached more users. The algorithm then proceeded to artificially boost the content published by the billionaire by a factor of 1,000 times.

On Mondayusers began to notice the large number of tweets by the owner of the network in the “for you” tab, created in early February with the promise of delivering personalized curation for each user.

• On the same day, the billionaire himself posted a mocking meme the overexposure of his tweets and hours later he wrote “stay tuned as we make adjustments to the… ‘algorithm'”.

According to reports made to Platformer, the artificial boost of Musk’s tweets is still valid, but the factor is now below 1,000 times.

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New American President

Americanas’ board of directors elected Leonardo Coelho Pereira as the company’s new chief executive.

He was once a partner at consulting firm Alvarez & Marsal, a specialist in company restructuring that was hired by Americanas in its recovery process. According to his LinkedIn profile, he stayed with the company for 11 years.

João Guerra, who had been occupying the presidency on an interim basis since Sergio Rial resigned after announcing the “inconsistencies” of R$ 20 billion, returns to act as director of human resources at the retailer.

Decisive meeting: this Thursday (16th), Rothschild, an advisory firm hired to act as the midfielder between the company and the creditor banks, will try to advance in agreements with the financial institutions to present a judicial recovery plan.

• Also attending the meeting is Roberto Thompson Motta, partner of the trio of billionaires Jorge Paulo Lemann, Marcel Telles and Beto Sicupira in the 3G fund.

• The conversation between the company and its biggest creditors has come up against the value that the reference shareholders will contribute to the deal.

• Banks find the already announced DIP financing of up to R$2 billion insufficient and want billionaires to put money into the company instead of a priority loan.

More about Americanas

Rial received BRL 600,000 for providing advice to the retailer, between September 1 and December 31, 2022 – he took over as president the following day. The executive said that “CEO succession processes, in general, are remunerated by the hours worked before taking office”

The president of the BNDES, Aloizio Mercadante, said that the bank does not plan any direct action to help Americanas and that the development institution is not a “hospital for companies”.

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Managers criticize inflation target

Three renowned and respected asset managers from the Brazilian financial market joined critics of the current inflation target in the country at a BTG Pactual event, with the presence of Finance Minister Fernando Haddad in the audience.

What each one said:

• Rogério Xavier, from SPX Capital: “We only reached 3% inflation once, in 2016. Now that we’ve gone through all these inflationary situations, Brazil decided to set the target at 3%. In the US, the target is 3.5% and in Brazil it will be 3%? It’s a lack of common sense. What’s the use of seeking 3.25% and delivering 6%?”.

• Luis Stuhlberger, from Verde Asset: “Searching for an unrealistic target is not a good thing for Brazil. I agree that it has to have a credible fiscal framework, the two together can make Brazil a better place.”

• André Jakurski, from JGP: “I think the target should be changed and interest rates lower. [taxa nominal menos a inflação] in Brazil is impressively high and the country will not succeed with these interest rates”.

The opinion of managers who administer billions of resources contrasts with the view expressed by economists to BC directors in recent days.

• For them, it would not be positive to change the system now, because it would generate an increase in inflation expectations, and, consequently, would demand greater monetary tightening on the part of the Central Bank.

New nod: BC president Roberto Campos Neto continues to adopt a conciliatory tone in his speeches in relation to the government. On Thursday, he said that fiscal discipline is necessary, but that he understands that it is necessary to have a “more special eye on social matters”.

in the governmentallies advised President Luiz Inácio Lula da Silva (PT) to take a break from criticizing interest rates and leave that role to certain party members and, especially, parliamentarians.