Plus: Elliott Investment Management now has a 13% stake in Etsy, and a board seat
| For February 01, 2024 |  |
| Here are today's main tech stories: - 🤠 Tesla will hold a shareholder vote to decide whether to incorporate the company in Texas.
- 🎵 TikTok removes Taylor Swift's songs from the platform amid a feud with Universal Music Group.
- 🚲 Peloton shares drop after the company posts underwhelming results.
- 💰 Activist investment firm Elliot Management Investment has secured a 13% stake and a board seat in Etsy.
- 💻 Okta lays off 7% of its workforce.
- 🛑 Zoom cuts 150 jobs.
Arbër
p/Arber | |
| 1 | | Tesla is set to hold a shareholder vote to incorporate the company in Texas, according to Elon Musk. After having his $56B compensation package voided by a judge in Delaware, the Tesla CEO said he wants to move the company's state of incorporation to Texas. More: - After the ruling, Musk said on X: "Never incorporate your company in the state of Delaware."
- Legal experts told Reuters that Tesla investors may oppose the move if Musk's only motivation is to secure his compensation package.
- Brian Cheffins, a professor of corporate law at Cambridge University, said that it is unclear if Texas judges would approve Musk's compensation package, which is reportedly the largest in the U.S.
- Large companies often choose to incorporate in Delaware because the state has a business-friendly regulatory framework and beneficial tax policies.
Zoom Out: - Tesla changed its corporate headquarters from Palo Alto, California, to Austin, Texas, in 2021 after Musk publicly disagreed with California legislators.
- Tesla operates a gigafactory in Texas and is building a lithium refinery in the state.
- SpaceX and the Boring Company also have operations in the Lone Star state.
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| 2 | | 
Taylor Swift's songs were removed from TikTok soon after Universal Music Group ended its partnership with the platform. The music label claims that it is not being compensated fairly. More: - Universal said TikTok offers low royalty rates, compared to other social media companies.
- Universal also criticized TikTok for allowing the use of AI-generated music, which could reduce revenues for recording artists.
- TikTok denied the claims and said Universal is putting its "own greed" above the needs of its artists.
- In a statement, TikTok said that thanks to having more than 1 billion users, the platform "serves as a free promotional and discovery vehicle" for musicians.
- TikTok said it has reached licensing agreements with all other major music publishers.
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| 3 | | Peloton made $743M in revenue in the last quarter of 2023, a 6.2% drop versus the same period a year earlier. In its financial results, the company posted a net loss of nearly $150M, down from a loss of $335.4B a year earlier, and said it expects weak sales in the current quarter. More: - Peloton shares dropped 20% after the results were published.
- Peloton's connected fitness product proved to be a bright spot, managing to turn a gross profit for the second quarter in a row.
- The company saw strong sales growth at retail partners, and demand for its Tread+ was "significantly stronger" than expected.
- Peloton expects revenue to reach between $2.68B and $2.75B in the current fiscal year, down from an earlier estimate of $2.80B.
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| 4 | | Activist investor firm Elliott Investment Management controls a 13% stake in Etsy, which has allowed the activist investor to appoint a board member. Etsy's shares rose over 9% following the news. More: - Elliott is now Etsy's biggest investor, ahead of Vanguard, with an 11% stake, and BlackRock, which holds about 5%.
- Elliott appointed company partner Marc Steinberg to the Etsy seat.
- Etsy has failed to hold on to the growth that resulted from the pandemic-driven boom in e-commerce.
- The company laid off 225 workers in December, representing 11% of its staff.
- With $59B in assets under management as of June 2023, Elliott is one of the world's largest investment firms.
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| 5 | | Okta is set to lay off 7% of its staff, approximately 400 employees to lower costs and improve efficiency. Okta CEO Todd McKinnon said the decision will help ensure the company's long-term success. More: - Okta will provide severance packages to laid-off employees, including financial compensation, outplacement services, and extended health insurance coverage.
- The access and identity management company posted a revenue of $584M in the third quarter of 2023, beating estimates.
- Okta laid off 300 employees a year ago, representing 5% of its workforce.
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| 6 | | Videoconferencing company Zoom cut 150 jobs this week, or 2% of its workforce. The company is still hiring for AI, sales, and engineering positions. More: - After a boom during the pandemic, Zoom has failed to post strong growth.
- To secure new revenue streams, Zoom has launched new products, such as contact center software and Zoom Phone, which now has 7 million paid users.
- In February 2023, the company laid off 1,300 employees.
Zoom Out: - Between 15,000 and 20,000 tech workers have lost their jobs so far this year.
- The tech industry cut approximately 240,000 jobs in 2023.
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- Apple's Vision Pro will reportedly launch with over 600 apps.
- YouTube Premium and Music has reached 100 million subscribers, according to YouTube CEO Neal Moha.
- Ohio-based medical device company SPR Therapeutics has raised $85M in funding, including $25M in equity funding and a $60M debt round.
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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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