Plus: Samsung Electronics reports 34% Q4 operating profit YoY drop
| For January 31, 2024 |  |
| Here are today's main stories from tech: - ⚖️ Delaware judge voids Elon Musk's $56B compensation package.
- 💼 PayPal plans to lay off 2,500 employees.
- 📉 Alphabet misses ad revenue estimates.
- 💵 Samsung reports a 34% Q4 profit drop compared to the same period one year ago.
- 🚀 Microsoft beats revenue forecasts.
- 🤝 Rebellion raises $124M Series B funding round.
Arbër
p/Arber | |
| 1 | | A Delaware judge has voided Elon Musk's $56B Tesla compensation package. In her ruling, judge Kathaleen McCormick wrote that Tesla's board failed to prove the compensation "was fair." More: - The package, initially approved by Tesla in 2018, was the largest compensation plan in public corporate history.
- It offered Musk the chance to secure millions of shares through 12 tranches, which would vest if the company reached specific market cap and revenue targets.
- A Tesla shareholder named Richard Tornetta filed a suit in 2018, claiming that the package was approved without demanding Musk's full focus on running Tesla, which was unfair to shareholders.
- After the ruling, Musk said on X: "Never incorporate your company in the state of Delaware."
- Musk can appeal the decision to the Delaware Supreme Court.
Zoom Out: - Earlier this month, Musk said he would like to have 25% of voting control over Tesla. He currently owns 13%.
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| 2 | | 
PayPal is set to lay off 2,500 employees, or 9% of its global workforce. The affected employees will be notified by the end of the week. More: - The announcement was made by the company's CEO, Alex Chriss, through a company-wide letter.
- The job cuts will affect both existing roles and job listings, and will be implemented in 2024.
- The layoffs aim to increase efficiency and reduce complexity, and are part of efforts to "deploy automation," Chriss said.
- PayPal laid off 2,000 employees in 2023, representing 7% of its global workforce.
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| 3 | | Alphabet's share price dropped 6% in after-hours trade on Tuesday, after the company missed ad revenue estimations for the fourth quarter of 2023. Alphabet posted $65.52B in ad revenue, less than the $65.94B that Wall Street had estimated. More: - Google posted a gross revenue of $86.31B, 13% higher than in Q4 2022.
- Revenue from YouTube ads reached $9.2B, versus the $9.21B expected by analysts.
- The Google Cloud division generated $9.19B, surpassing the $8.94B estimate.
- Google Cloud's growth rate accelerated in Q4, compared to the previous year, but Microsoft's Azure grew at an even faster rate.
- Traffic acquisition costs stood at $13.9B, just below the $14.1B estimate.
- Alphabet's share price has surged by 56% in the past year, not including the after-hours drop.
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| 4 | | Samsung Electronics reported a 34% in Q4 operating profit drop, compared to the same period a year earlier. The Korean company reported $51B in revenue, above the $52B estimated by analysts. More: - Samsung's revenue for the quarter ending December fell by 3.8% from the same period a year earlier.
- Samsung reported an operating profit of $2.1B, versus the $2.5B estimated by analysts.
- The company said that weak global demand was to blame for its semiconductor business reporting a record loss of $11.1B.
- The division had recorded $17B in profit a year before.
- Samsung said Q4 smartphone sales and profit also declined compared to the previous quarter.
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| 5 | | Microsoft has presented a better-than-expected financial report for the quarter ending Dec. 31, beating revenue and earnings estimates. The tech giant made $62B in revenue, compared to the $61.12B estimated by analysts. More: - The company reported $2.93 in earnings per share, compared to the $2.78 estimate.
- Microsoft's revenue increased 17.6% year over year in the quarter.
- The company's $21.87B net income represents a 33% increase.
- The Intelligent Cloud segment generated $25.88B in revenue, up 20% from a year earlier, and above the $25.29B estimated by analysts.
- Microsoft has 53,000 Azure AI customers, a figure that grew by a third in 2023.
- Revenue from the Productivity and Business Processes unit, which includes apps such as LinkedIn, reached $19.25B, a 13% increase.
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| 6 | | Rebellions has raised a $124M Series B funding round to develop AI chips. The company is now valued at $658M. More: - Rebellions aims to use the funding to boost the production of its two chips, Rebel and Atom.
- Rebellions plans to develop its Rebel chip in partnership with Samsung by the end of 2024.
- KT was the lead investor in the Series B round, with participation from Pavilion Capital, Korea Development Bank Korelya Capital, and DG Daiwa Ventures.
- Since its inception in 2020, the South Korean company has raised $210M.
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- The U.S. government said it stopped a China-backed cyberattack that targeted critical infrastructure.
- TikTok has pledged to spend $2B in 2023 to protect U.S. kids from harmful content.
- California-based startup Zum raised a $140M Series E funding round. The round, which values the company at $1.3B, was led by GIC.
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 | Writer | | Arbër is an Inside analyst who has previously incubated his startup at the largest incubator in Southeastern Europe. He has collaborated with multiple major publications and holds a business degree from XAMK University in Finland. | | This newsletter was edited by Eduardo Garcia | |
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