Read this Thursday’s edition of the FolhaMercado newsletter (9) – 09/02/2023 – Market

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Disney starts cutting in the flesh

Disney CEO Bob Iger, who recently took over the company with the mission to reduce costs, announced this Wednesday (8) his first major action in this regard.

The company will cut 7,000 jobsor about 3% of the staff, as part of a broad restructuring that he says could save $5.5 billion In the next years.

• Disney shares rose 5% in trading following the announcement.

Remember: Iger took over in November last year after an unexpected change in command of the company, with the resignation of Bob Chapek.

• The former executive’s management was marked by the resources spent to take over the leadership of the streaming sector, which totaled a loss of $1.5 billion in a single quarter.

Now, Iger, who took over to stop this bleeding, has exceeded the company’s estimates and reduced the loss by about $400 milliondouble what was expected.

In numbers: Disney’s revenue for the final quarter of 2022 increased 8% to $23.5 billion, and net income increased 11% to $1.3 billion, above analyst expectations.

• The company’s flagship streaming service, Disney+, lost about 2.4 million subscribers in the quarter. When considering the company’s other channels –ESPN+ and Hulu–, the number of subscribers remained stable at 235 million.

• Netflix ended 2022 practically stuck, with 230 million of users.

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Google crashes with ‘Bard’ error

Google said at an event on Wednesday that it will soon add generative AI (artificial intelligence) capabilities to search results and Maps.

Understand: the company cited as an example the possibility of carrying out searches with images so that a user can identify a local reference point.

• Another plan is to generate long textual responses to complex queries without a single correct answer.

Yes but… On Tuesday, when Google announced “Bard”, its chatbot to compete with ChatGPT, what caught the most attention was an error noticed by users in a demonstration shown by the big tech itself.

• The robot claims that the James Webb Telescope captured the first images of planets outside the solar system, but a Google search leads to a link on NASA’s website that shows that the first pictures of exoplanets were taken by the European ground-based VLT telescope.

• An error like this helps to explain why the generative AI projects of the great big techs walked at a slow pace until they were rushed by the success of ChatGPT, from the startup OpenAI.

Negative reaction: this Wednesday’s unexciting announcements and Bard’s failure had repercussions on the shares of Alphabet (owner of Google), which plummeted 7.4% this Wednesday.

Giant War: the accumulation of Google ads happens in the same week that Microsoft integrated an improved version of ChatGPT to its Bing search engine, the biggest rival of Alphabet’s tool.

• The new version of the search engine promises more complete answers. According to the company, Bing will be able to scour the internet to find and summarize the user’s search.

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Marisa falls after announcement

Fashion retailer Marisa Shares Dipped 6% this Wednesday after the company communicated to the market the resignation of CEO Adalberto Pereira Santos and the hiring of BR Partners and Galeazzi Associados for financial advisory.

• The first will be responsible for helping it with the renegotiation of debts, while Galeazzi will have a role in “improving the cost structure”.

Understand: in addition to the change in command of the company, the hiring of BR Partners triggered an alert among investors due to the current situation, with high interest rates —which make debt management difficult— and credit stressed by the Americanas crisis.

• Marisa is not the first to hire an advisory to renegotiate its debt in light of this scenario. Recently, the tourism company CVC and the energy distributor Light –which lives its own “astral hell”– also did this.

In numbers: Marisa added an adjusted net debt of BRL 566.1 million in the third quarter of last year, a period in which it recorded a loss of BRL 97.5 million.

Command change: the retailer will have its third president in less than a year. In March of last year, Marcelo Pimental left the company to take over Grupo Pão de Açúcar.

• Now, Adalberto Pereira Santos will be replaced by Alberto Kohn de Penhas, commercial vice-president who will assume the leadership of the fashion retailer on an interim basis.

Marcio Goldfarb, son of the retailer’s founder and who holds a position on the board, became a defendant at the CVM in December last year also for having bought shares less than 15 days before the balance sheet was disclosed.

Marisa claims that she provided information and clarifications to the CVM on the stock negotiations.

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iFood reaches agreement with Cade

iFood reached an agreement with Cade (Administrative Council for Economic Defense) on its exclusivity contracts with restaurants.

• The inquiry had been ongoing since 2020, when Rappi filed a lawsuit with the antitrust body and was followed by Abrasel (association of bars and restaurants), 99Food and UberEats – which abandoned the delivery service.

by agreementiFood, the undisputed leader of the sector in the country, will not be able to close exclusivity contracts with brands that have 30 or more establishments.

• New contracts should also have a limited duration of two years. After this break, it will be worth a kind of “quarantine of exclusivity” lasting one year.

• iFood’s turnover in exclusivity contracts cannot exceed 25% of the total operation in the country.

iFood said that, with the agreement, Cade recognizes the legality of the practice of exclusivity with restaurants, which receive, in exchange, application investments and differentiated commercial conditions.