Chinese tech giant Tencent released its Q2 earnings on Wednesday, reporting its first-ever revenue drop. The decline comes amid stricter regulation around gaming and the recent COVID-19 lockdowns in China. Tencent has registered double-digit growth almost every quarter since it went public in 2004. More: - Tencent is the world’s largest video game developer; the company also owns super app WeChat.
- In April, Chinese regulators lifted a nine-month hold on gaming licenses but have yet to issue a new license to Tencent.
- Tencent reported 134.03 billion Chinese yuan ($19.8B) in revenue in Q2, down 3% YoY.
- Revenue from its main videogame business fell 1% YoY.
- Last year, China introduced a new policy on online videogames for individuals under 18 years old:
- No online video games during the school week, and one hour a day on Fridays, weekends, and public holidays.
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Apple is in talks to produce its Apple Watches, MacBooks, and HomePods in Vietnam for the first time. According to Nikkei Asia, Apple is seeking to diversify its manufacturing outside of China as it battles supply chain disruptions related to the COVID-19 lockdowns in China and increased U.S.-China tensions. More: - Apple suppliers Luxshare Precision Industry and Foxconn have started test production of the Apple Watch in northern Vietnam.
- Apple is also talking with suppliers to build test production lines for its HomePod smart speakers and MacBook laptops in Vietnam.
- According to Nikkei Asia, many other major electronics manufacturers like Google, Dell, and Amazon have also set up production in Vietnam to diversify outside China.
- Vietnam is Apple's second most important manufacturing hub outside of China.
- The country already produces many Apple products, including the iPad and AirPods headphones.
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Bed, Bath, and Beyond’s stock has jumped more than 300% this month amid a meme stock trading frenzy. The trading volume of the stock has also been abnormally high. According to FactSet, more than 395 million Bed, Bath, and Beyond shares were traded on Tuesday. In July, Bed, Bath, and Beyond did not register a single day with even 20 million in trading volume. More: - The jump in value appears to be a continuation of the meme trading frenzy that occurred last year with GameStop and other stocks.
- Retail investors buy stocks with high short interest in hopes of creating a short squeeze, where hedge funds that have bet against the stock are forced to close out their positions and push the shares even higher.
- Bed Bath & Beyond shares closed at $5.77 on Aug 1. On Wednesday afternoon, they were trading around $27, up nearly 30%.
- However, the frenzy appears to be cooling as the stock closed at $23.08 on Wednesday, up about 12% for the day.
- It was down over 10% in extended trading on Wednesday.
- Bed Bath & Beyond shares are up over 50% YTD.
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Target released its Q2 earnings on Wednesday, reporting a 90% drop in its profit compared to last year. The retailer recorded $26.04B in total revenue, up 3.5% YoY. Net sales were $25.7B, up 3.3% YoY. Net income came in at $183M, down from $1.82B reported last year. Diluted EPS was 39 cents, down from $3.65 reported in the previous year. More: - In June, Target warned of a short-term profit decline as it planned to cancel orders and mark down unwanted inventory.
- Comparable sales grew 2.6 percent, on top of 8.9 percent growth last year.
- Target reiterated its full-year forecast; it still expects full-year revenue growth in the low to mid-single digits.
- The company said its operating margin rate would be around 6% in the second half of the year.
- Target shares were down over 2% in afternoon trading. It closed at $175.24, down ~2.7% for the day.
- Target is down 24.4% YTD.
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Uniper, Germany’s largest importer of Russian gas, recorded a net loss of more than $12.6B for the first half of the year. The firm has been forced to buy gas at record high market prices after Russia cut down its gas deliveries to Germany. Russia has capped natural gas deliveries through the Nord Stream pipeline at 20% of its maximum capacity. More: - According to Uniper CEO Klaus-Dieter Maubach, the company has played a crucial role in stabilizing Germany’s gas supply over the last several months at the cost of billions in losses.
- Uniper said it couldn’t issue an annual earnings forecast because of the volatile environment.
- The company expects to record negative earnings due to the sharp decline in Russian gas supplies.
- Last month, the German government approved a 15B euro ($15.24B) rescue package for Uniper and took a 30% stake in the company.
- Uniper’s shares were trading down 9% on Wednesday.
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Airbnb is testing a new anti-party system in the U.S and Canada. Earlier this year, the company announced a permanent global ban on house parties on its platform. The new technology is designed to automatically detect the kinds of bookings that are likely to result in unauthorized parties. More: - The system looks at factors like a guest’s review history, how long they have used Airbnb, the length of their requested stay, and if they are booking for a weekday or weekend.
- The anti-party technology is designed to prevent a reservation attempt from going through.
- Airbnb said it has been testing similar technology in some areas in Australia since Oct. 2021 and saw a 35% decline in unauthorized parties.
- Airbnb is ending the pilot phase of the anti-party system in Australia and codifying the new technology across the country.
- The company hopes to replicate the same process in the U.S. and Canada.
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- Crypto broker Genesis is cutting about 20% of its workforce or 52 jobs. The company also announced that CEO Michael Moro will step down, and its operation chief, Derar Islim, will take over as interim CEO while the company searches for a permanent replacement. The company lost over $1B from its exposure to crypto hedge fund Three Arrows Capital.
- European banks are trading Russian bonds again. The move comes after the U.S. Treasury’s Office of Foreign Assets Control granted a three-month window on July 22 for banks to help investors who had been left holding Russian bonds to exit their positions.
- Inflation in the U.K. rose 10.1% in July compared to last year. This is the first time in more than 40 years that the nation has recorded a double-digit annual inflation rate hike. The rate also surpassed economists’ expectations of 9.8% inflation for July. Food price inflation rose 12.7% in July.
- Global Monkeypox cases rose 20% last week to 35,000 across 92 countries. According to the World Health Organization (WHO), infections increased by nearly 7,500. WHO Director-General Tedros Adhanom Ghebreyesus said most patients are men who have sex with men and added that global vaccine supplies are limited.
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 |  | Vanessa Omeokachie is a Researcher at Inside. Her interests include finance, tech, and startups. In her free time, she enjoys reading, hiking, attending music festivals, and traveling. Connect with her on Twitter @VanessaOmeo or through email at vanessa@inside.com |  | | Editor | Aaron Crutchfield is based in the high desert of California. Over the last two decades, he has spent time writing and editing at various local newspapers and defense contractors in California. When he's not working, he can often be found looking at the latest memes with his kids or working on his 1962 and 1972 Fords. | |
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