3. Trouble in the Valley
Silicon Valley Bank is in deep trouble, stoking fears of a bank run. Shares of the firm tanked 60% Thursday, and they're down another 40%-plus in high-volume off-hours trading Friday morning. The bank has been around for four decades, providing support for tech startups even as the industry has gone through ups and downs. This time looks different, though. SVB sent investors running for the hills this week after it sold off $21 billion in holdings at a loss of about $1.8 billion. It also raised $500 million from General Atlantic, a private equity firm. Venture activity had already declined, the IPO market has largely dried up, and now the Fed's rate hikes are putting an even bigger squeeze on the high-risk world of tech finance. Client funds are dwindling rapidly, too. "Psychologically, it's a blow because everyone realizes how fragile things can be," Scott Orn, operating chief at Kruze Consulting, told CNBC.
4. GM offers buyouts to thousands
General Motors isn't done with staff reductions. The Detroit automaker said Thursday that it would offer buyouts to a majority of its 58,000 salaried workers in the United States. The company said it would result in a $1.5 billion pretax charge. The move comes soon after GM laid off about 500 white-collar workers globally. The company is looking to rein in costs as it ramps up production of costly electric vehicles to adjust to rapidly changing standards in the U.S. and abroad. "Employees are strongly encouraged to consider the program," GM said in a statement. "By permanently bringing down structured costs, we can improve vehicle profitability and remain nimble in an increasingly competitive market."
5. Gap falls into itself
Gap was once the American mass market avatar of hipness. These days, though, the apparel retailer is on the verge of slipping into irrelevance. Shares of Gap fell after its latest disappointing earnings report. Sales declined in the holiday quarter, while the company posted a much wider loss than Wall Street expected. It also offered soft guidance for the current quarter and the year. Gap – whose brands include Banana Republic, Athleta and Old Navy – also announced another shakeup in its executive ranks as it zeroes in on a choice for its permanent CEO. The company said an external candidate would fill the role.
— CNBC's Mike Calia wrote this newsletter. Patti Domm, Alex Harring, Ari Levy, Rohan Goswami, Michael Wayland and Gabrielle Fonrouge contributed.
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