Hello Readers, I hope you are having a wonderful holiday period. For the last Inside Business Roundup newsletter of the year, I have put together the top six business stories of 2022. So much has happened this year that it was incredibly difficult to boil it down to just six. I would love to hear your thoughts on my selections. Did any of the stories below make your list? I look forward to seeing you all in the New Year! Keep an eye out for the first newsletter of 2023, which will include my top predictions for the year. See you on the other side! :-) |
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 One of the most defining events of 2022 was Russia's invasion of Ukraine on Thursday, Feb. 24. In addition to the terrible loss of human life and property, the ongoing war has had ripple effects across various sectors of the European and global economies. Europe's energy sector arguably felt the most impact, with surging prices and firms booking huge losses as they rushed to exit their Russian operations. More: - Soon after the invasion, the U.S., EU, Japan, and other western nations imposed sanctions on Russia, Russian entities, specific individuals, and their families.
- The sanctions prohibited western investors from trading in Russian state bonds or investing in Russian businesses. They froze Russian assets and banned sanctioned Russian individuals from traveling to the respective countries.
- Germany suspended the approval process of the Nord Stream 2 pipeline, an $11B natural gas pipeline that runs from Russia to Germany.
- The pipeline would double the amount of natural gas flowing between the two countries.
- As Europe moved to ban most oil and natural gas imports from Russia, oil and energy prices skyrocketed.
- International benchmark Brent Crude reached $139.13 a barrel in March, its highest price since 2008.
- According to the Yale School of Management, over 400 companies announced they were leaving Russia following the country's invasion of Ukraine.
- Due to the rush to exit their Russian holdings and operations, many firms took significant losses.
- Oil giant BP took a $25.5B pretax accounting charge when it exited its Russia operations.
- BP had a significant stake in Russian state-back oil producer Rosneft, which accounted for about half of BP's oil and gas reserves and a third of its production.
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 One could write an entire book on Elon Musk’s acquisition of Twitter. As a matter of fact, someone is already doing it. Musk’s takeover of Twitter and the ongoing aftermath of the purchase made headlines throughout the year. I will attempt to summarize the most noteworthy parts of the takeover journey, sticking strictly to dates and facts. You can find more interesting tidbits on Twitter. Spring: - On April 4, an SEC filing revealed that Musk had taken a 9.2% stake in Twitter for about $2.89B.
- The move came weeks after Musk asked his followers on Twitter if the platform adheres to free speech principles.
- Musk tweeted, “Given that Twitter serves as the de facto public town square, failing to adhere to free speech principles fundamentally undermines democracy.”
- On April 5, Twitter’s former CEO, Parag Agrawal, announced that Musk would join Twitter’s board.
- On April 10, Agrawal announced that Musk had declined the Twitter board seat.
- On April 14, Musk announced he had offered to take Twitter private at $54.20 a share, totaling about $44B.
- On April 15, Twitter’s board of directors voted unanimously to adopt a limited-duration shareholder rights plan, often referred to as a “poison pill.”
- On April 25, the board accepted Musk’s $44B takeover offer.
- On May 13, Musk tweeted that the Twitter deal was on hold pending details showing that the number of spam/bots on Twitter is less than 5% of its users.
Summer: - On July 8, Musk filed to terminate his agreement to buy Twitter, accusing the social media company of not complying with its contractual obligations.
- Musk’s lawyer, Mike Ringler, claimed Twitter did not provide Musk with the relevant business information he requested and accused Twitter of supplying materially inaccurate representations, referring to the number of bots and spam accounts on the platform.
- On July 12, Twitter sued Musk in Delaware Chancery Court to enforce his $44B takeover of the company.
- On July 29, Judge Kathaleen McCormick set the court date for Twitter’s lawsuit against Musk for Oct. 17 through 21.
Fall: - On Oct. 4, Musk offered to purchase Twitter at the previously agreed price of $54.40 a share.
- On Oct. 6, McCormick ruled Musk had until Oct. 28 to complete his acquisition of Twitter, or the trial would resume.
- Finally, on Oct. 27, Musk completed the Twitter acquisition and fired Agrawal, CFO Ned Segal, legal and policy executive Vijaya Gadde, and general counsel Sean Edgett.
- Since taking over the company, Musk has laid off more than 50% of Twitter’s employees and made some rapid product and policy changes to the platform, some of which have been retracted.
- One notable feature is adding the blue verification checkmark to the Twitter Blue subscription package. Twitter had to suspend the feature soon after its November launch after users bought checkmarks to impersonate companies, public figures, and Musk himself, but it returned in December.
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 Inflation in the U.S. and around the globe rose to multi-decade highs this year. U.S. inflation peaked at 9.1% in June, its highest YoY increase since 1981. Food, energy, used cars, and airfare saw the largest price increases. Energy prices jumped 41.6% in June compared to last year. The sharp rise in prices led to multiple rate hikes by the Fed. The average price of unleaded gasoline in the U.S. crossed the $5 mark for the first time in June. More: - U.S. Fed officials raised interest rates seven times this year, including four consecutive 0.75% rate increases, in a bid to tackle rising consumer prices.
- The central bank began raising rates in March, announcing a 25-basis point rate increase, bringing the federal funds rate from near zero to a range of 0.25% to 0.50%.
- In May, the Fed announced a 0.50% rate increase, followed by four 0.75% rate hikes in June, July, September, and November.
- The central bank ended the year with a 0.50% rate increase in December, bringing its benchmark rate to a range of 4.25% to 4.50%.
- The Bank of England announced its ninth interest rate increase earlier this month, bringing its benchmark rate to 3.5%.
- The European Central Bank (ECB) announced four interest rate hikes this year, bringing its main interest rate to 2%, its highest rate since 2008.
- ECB President Christine Lagarde signaled that the bank expects to continue raising rates for a while.
- Switzerland’s National Bank raised its interest rate by 0.75%, moving its benchmark rate to the positive – 0.5% – for the first time in eight years.
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 Another story that could fill an entire book is the collapse of popular crypto exchange FTX. The crypto firm co-founded by Sam Bankman-Fried filed for bankruptcy in November after a CoinDesk report highlighted potential leverage and solvency concerns involving its sister company, Alameda Research. FTX’s sudden collapse capped a volatile year in the crypto sector, which saw multiple firms halt withdrawals and file for bankruptcy. The crypto industry has lost nearly $2T in value this year. More: - FTX filed for bankruptcy on Nov. 11 after facing a liquidity crunch and being unable to secure bailout funds.
- FTX agreed to a merger with rival exchange Binance, but the latter backed out after reviewing FTX’s financials.
- Bankman-Fried stepped down as CEO and was succeeded by John J. Ray III.
- While testifying before the House Committee on Financial Services earlier this month, Ray said FTX displayed a complete failure of corporate controls, and he had never seen anything as bad in his 40-year career spent restructuring firms.
- Ray notably oversaw the liquidation of Enron following the energy company’s bankruptcy filing in late 2001.
- Ray said FTX creditors should anticipate massive losses, as the crypto exchange may not recover all the lost funds.
- Current estimates put FTX’s uncounted funds at around $8B.
- Ray said the scheme at FTX and Alameda were unsophisticated, referring to what occurred as “just plain old-fashioned embezzlement.”
- Bankman-Fried was arrested in the Bahamas on Dec. 12 and extradited to the U.S., where he faces eight charges, including wire fraud, wire fraud conspiracy, securities fraud, securities fraud conspiracy, money laundering, and violations of campaign finance laws.
- Last week, FTX co-founder Gary Wang and former Alameda co-CEO Caroline Ellison pleaded guilty to federal charges in the Southern District of New York.
- Ellison pleaded guilty to two counts of wire fraud, two counts of conspiracy to commit wire fraud, commodities fraud, securities fraud, and conspiracy to commit money laundering.
- Wang pleaded guilty to conspiracy to commit wire fraud, wire fraud, conspiracy to commit commodities fraud, and conspiracy to commit securities fraud.
- Bankman-Fried is expected to enter a “not guilty” plea at his arraignment next week.
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 This year, there were multiple large merger and acquisition announcements, with global M&A deals totaling ~$2T. There was also a significant increase in global regulators reviewing these deals and, in some cases, suing to block them from going through. More: - In January, Microsoft announced it would buy video game developer Activision Blizzard for $68.7B.
- Earlier this month, the FTC sued to block the acquisition, arguing that Microsoft has already shown that it can and will withhold content from its gaming rivals.
- In May, chip maker Broadcom announced it would purchase cloud computing company VMware in a massive $61B deal.
- In September, Adobe agreed to buy rival design software company Figma for $20B.
- In October, Kroger agreed to buy its supermarket rival Albertsons for $24.6B.
- The deal, if completed, would create the largest supermarket chain in the U.S.
- The combined companies would control 13% of the U.S. grocery market, well behind Walmart’s 22%.
- Earlier this month, the FTC sent a second request to Kroger for more information about the deal.
- Earlier this month, Amgen agreed to buy Horizon Therapeutics for $27.8B, marking the largest healthcare merger of the year.
- The deal is expected to face regulatory scrutiny.
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 Congress passed the $280B CHIPS Act in the summer aimed at boosting the U.S. semiconductor industry. The Creating Helpful Incentives to Produce Semiconductors and Science Act, as it is officially known, provides $52.7B to semiconductor firms as an incentive to research and develop semiconductors and chips in the U.S. More: - The $52.7B includes direct financial assistance for the construction and expansion of semiconductor manufacturing facilities.
- The legislation allocates about $200B to science and technology funding, including $81B to the National Science Foundation.
- The bill allocates about $50B to the Energy Department to boost several programs focused on clean energy, nuclear physics, and high-intensity lasers.
- The measure also provides about $20M for security for Supreme Court justices.
- President Biden praised the legislation, noting the future of the chip industry would be in the U.S.
- The CHIPS Act is central to President Biden’s objective to make the U.S. more competitive and less reliant on foreign supply chains for critical technology.
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- Theranos founder Elizabeth Holmes was convicted in January of four counts of fraud. She was found not guilty on four other counts related to defrauding patients who had used Theranos' blood tests. Last month, Holmes was sentenced to 135 months, or 11 years and three months, in prison.
- Theranos COO Ramesh "Sunny" Balwani was convicted in July of 10 counts of wire fraud and two counts of conspiracy to commit wire fraud. He was sentenced to 13 years in prison.
- According to Crunchbase, more than 91,000 workers in the U.S. tech sector were laid off this year. Meta Platforms laid off 13% of its global workforce or about 11,000 workers. In November, Amazon announced plans to lay off 10,000 workers. CEO Andy Jassy noted the layoffs will stretch into 2023 as the company finalizes its annual operational budget. Other companies that announced significant job cuts include Stripe, DoorDash, and Robinhood.
- Johnson & Johnson, AmerisourceBergen, Cardinal Health, and McKesson agreed to pay $26B to settle lawsuits over their respective roles in fueling the opioid crisis. About 46 states were part of the settlement. Walgreens and CVS agreed to pay $10.7B to settle lawsuits over their roles in the opioid crisis.
- OPEC+ announced its largest oil production cut since the pandemic. In October, the 23-nation oil-producing group, which includes Saudi Arabia, the UAE, and Russia, agreed to cut their oil output by 2 million barrels a day. The reduction sent shockwaves across the globe. President Biden threatened to support legislation that would break up the group.
- Three Founders wished they could invest in fractional real estate shares while browsing Zillow. So they made Arrived.*
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 |  | Vanessa Omeokachie is a writer for Inside.com; she writes the daily Inside Business newsletter. Her interests include finance, technology, and entrepreneurship. In her free time, she enjoys reading, hiking, attending concerts and music festivals, traveling, and exploring. Connect with her on Twitter @VanessaOmeo or on LinkedIn. |   | | 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. | |
