© Reuters. A person shops in a supermarket as inflation affected consumer prices in Manhattan, New York City, U.S., June 10, 2022. REUTERS/Andrew Kelly/File Photo
WASHINGTON (Reuters) -U.S. President Joe Biden on Sunday called on snack companies to stop shrinkflation, which is when businesses cut product sizes but keep prices the same, describing the practice as “a rip-off.”
“Some companies are trying to pull a fast one by shrinking the products little by little and hoping you won’t notice,” Biden said in a video posted on X, formerly known as Twitter, ahead of Super Bowl LVIII.
“Give me a break. The American public is tired of being played for suckers. I’m calling on companies to put a stop to this. Let’s make sure businesses do the right thing now,” he said.
Biden, who offered no solutions or policies to address the practice, did not name any specific companies but several brands were shown in the video, including Gatorade, Doritos, Breyers and Tostitos.
Senator Bob Casey, who chairs the Senate Health, Education, Labor, and Pensions (HELP) Subcommittee on Children & Families, in December released a report that showed the impact of smaller product sizes on everything from toilet paper to Oreos.
The report noted that household paper products were 34.9% more expensive per unit than they were in January 2019, with about 10.3% of the increase due to producers shrinking the sizes of rolls and packages.
It said the price of snacks like Oreos and Doritos had gone up 26.4% over the same period, with shrinking portions accounting for 9.8% percent of the increase.
Although inflation appears to be slowing, the economy remains Americans’ overall top concern, cited by 22% of poll respondents, as they have struggled with inflation and other aftershocks of the COVID-19 pandemic, according to a Reuters/Ipsos poll released last month.
Since taking office, Biden has made a pitch for lower supermarket prices, pushed drug makers to lower insulin costs, hotel chains to reduce fees and tried to diversify the meat-packing industry after beef prices skyrocketed in the aftermath of the pandemic.
Casey’s office said he had sent letters to the trade associations representing household consumer products, food and beverage corporations demanding answers about pricing strategies, package size practices and how shrinkflation affects customers. It was not immediately clear if they had responded.
Esports Entertainment Group transitions to OTC Markets
ST. JULIAN’S, Malta – Esports Entertainment Group, Inc. (NASDAQ: GMBL), a prominent iGaming and esports content provider, announced today that it will voluntarily delist from the Nasdaq Stock Market. Starting on Wednesday, the company’s securities, including common stock and warrants, will be suspended from Nasdaq and will begin trading on the OTC Pink Market, with plans to move to the OTCQB Venture Market subsequently.
The company, which operates globally and is licensed by the Malta Gaming Authority (MGA), focuses on esports wagering and providing business-to-business esports solutions. It boasts a significant esports venue management system deployed in over 1,000 locations worldwide, spanning colleges and universities.
Esports Entertainment Group’s strategic aim is to leverage its industry position to tap into the multi-billion-dollar esports and wagering market. It also targets the burgeoning sector of short-form esports content, which is conducive to betting due to its competitive and fast-paced nature.
The company provides consumer-focused wagering through its MGA-licensed brands and plans to distribute esports content aligned with its growth strategy. This move to the OTC Markets comes amid broader strategic efforts, although the company has cautioned that forward-looking statements involve risks and uncertainties that could affect actual results.
This update is based on a press release statement and reflects the company’s current operational adjustments. It should be noted that any forward-looking statements are subject to various factors that could significantly impact the company’s actual performance.
As Esports Entertainment Group, Inc. (NASDAQ: GMBL) prepares to transition from the Nasdaq Stock Market to the OTC Pink Market, investors are closely monitoring the company’s financial health and market performance. According to InvestingPro data, the company’s market capitalization stands at a modest 1.38M USD. Despite challenging market conditions, GMBL has maintained impressive gross profit margins, with the last twelve months as of Q1 2024 reporting a margin of 64.87%. This indicates a strong ability to control costs relative to revenue—a crucial factor in the highly competitive esports and iGaming industries.
However, the road ahead appears fraught with challenges. Revenue has seen a significant decline, with a decrease of 68.86% over the last twelve months as of Q1 2024. Additionally, the company’s stock has experienced a substantial downturn, with a one-year price total return as of the 51st day of 2024 plummeting by an alarming 99.95%. This level of price volatility is a critical consideration for investors, as highlighted by one of the InvestingPro Tips, which notes that GMBL stock generally trades with high price volatility.
For those considering a deeper analysis of Esports Entertainment Group, Inc., there are additional InvestingPro Tips available that could shed light on the company’s cash burn rate, short-term obligations, and analyst expectations regarding profitability. In total, there are 17 additional InvestingPro Tips that can be accessed to help investors make more informed decisions. For readers looking to take advantage of this resource, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
Cox Communications wins order overturning $1 billion US copyright verdict
By Blake Brittain
(Reuters) -Cox Communications, the cable television and internet service provider, convinced a U.S. appeals court to throw out a $1 billion jury verdict in favor of several major record labels that had accused it of failing to curb user piracy, setting the stage for a new trial on the matter.
The 4th U.S. Circuit Court of Appeals in Richmond, Virginia ruled on Tuesday that the amount of damages was not justified and that a federal district court should hold a new trial to determine the appropriate amount.
A Virginia jury in 2019 found Cox, the largest unit of privately owned Cox Enterprises, liable for its customers’ violations of over 10,000 copyrights belonging to labels including Sony (NYSE:) Music Entertainment, Warner Music Group and Universal Music Group (AS:).
Representatives for Cox and the labels did not immediately respond to requests for comment on the decision.
More than 50 labels teamed up to sue Cox in 2018, in what was seen as a test of the obligations of internet service providers (ISPs) to thwart piracy.
The labels accused Cox of failing to address thousands of infringement notices, cut off access for repeat infringers, or take reasonable measures to deter pirates.
Atlanta-based Cox had told the 4th Circuit that upholding the verdict would force ISPs to boot households or businesses based on “isolated and potentially inaccurate allegations,” or require intrusive oversight of customers’ internet usage.
Other ISPs, including Charter Communications (NASDAQ:), Frontier Communications (OTC:) and Astound Broadband, formerly RCN, have also been sued by the record labels.
Analysis-Barclays maps uncertain route to a simpler, stronger future
© Reuters. FILE PHOTO: A branch of Barclays Bank is seen, in London, Britain, February 23, 2022. REUTERS/Peter Nicholls/File Photo
By Sinead Cruise, Lawrence White and Iain Withers
LONDON (Reuters) – Barclays, unveiling its biggest revamp since 2016, sought to appease investors seeking a clearer route to less volatile returns.
Yet the British lender’s plan to dedicate fewer financial resources to its investment bank is at odds with ambitions to expand in some of the unit’s higher-risk businesses, investors said.
Barclays has historically devoted much of its capital to investment banking, roiling more conservative shareholders who say other businesses posting more reliable profits have been under-invested as a result.
The bank will continue to allocate the lion’s share of its firepower to investment banking, and while a bigger push into domestic lending is broadly welcomed, some analysts and investors are unconvinced the bank can grow market share enough to meet its lofty revenue goals, against strong competition and a skittish UK economy.
Barclays’ long-awaited strategic update presented on Tuesday will have the bank return at least 10 billion pounds ($12.66 billion) to investors and reorganize into five units from the current three business lines, a move it said would create a simpler and better balanced bank.
This so-called “re-segmentation” aims to give investors greater transparency of performance in each division, unlike the previous structure which reported corporate lending and investment banking revenues together, the bank said.
In a key part of the overhaul, Barclays will reduce the share of risk-weighted assets (RWA) devoted to its investment bank to around 50% by 2026 from about 63%.
In turn, the bank plans to deploy around 30 billion pounds more to its UK consumer, corporate lending and private banking arms that generate higher returns.
“Today’s announcement from Barclays is welcome as far as it goes,” said Jeremy Hosking, founder and portfolio manager at Hosking Partners.
“But shareholders are still waiting for a diagnosis of the 15-year share price undervaluation of the bank, in particular as to whether it is cyclical or structural.”
Barclays shares rose as much as 9.4% on Tuesday and closed up 8.6% – their biggest daily gain since November 2020. In the last 12 months, they have lost over 7%, compared with a 4.2% rise in a key regional banking index
The average returns on tangible equity (RoTE) in the businesses the bank has pledged to invest in ranged from 18% to 31% in the two years to end-2023, compared with a more modest 10% at the investment bank, company figures show.
By reallocating its capital, Barclays says revenue will grow to around 30 billion by 2026 from 25.4 billion pounds in 2023.
Scepticism abounds. Many analysts and commentators said the rejig did not reflect a “de-risking” of the investment bank but rather an ambition to grow other units faster to reduce the investment bank’s outsized influence on group profit.
And with such strong competition posed by NatWest Group in British small business lending, Lloyds Banking Group (LON:) in mortgages and HSBC in corporate lending, Barclays’ big UK bet is not guaranteed to succeed.
What is more, the capital underpinning Barclays’ investment bank will still far exceed that deployed by rivals, such as BNP Paribas (OTC:) and UBS in their investment banks. Both lenders boast healthier valuations than Barclays and similarly handsome shareholder payout plans.
Within the investment bank, Barclays intends to further grow its financing business, Chief Executive C.S. Venkatakrishnan told investors on Tuesday, referring to the lucrative but potentially risky practice of lending money to large institutional clients against stocks or bonds as collateral.
Barclays has invested heavily in the business, growing revenues from 1.8 billion pounds at an undisclosed point to 2.9 billion in 2023, he said.
Analysts at Citi estimate the investment bank is expected to account for 2.7 billion pounds of the targeted 4.6 billion-pound increase in group revenues by 2026, a goal they describe as “highly ambitious”.
Those revenue goals, they say, rely on a 900 million pound bounce in the industry’s overall fee pool over the period and 1.2 billion pounds of growth in equity capital markets and advisory fees as well as additional sales to existing clients.
Other investors and analysts voiced doubts whether the plan will offer as much reassurance as executives hope.
“The buybacks will help, but the second part of the picture is growing revenue,” Sajeer Ahmed, portfolio manager at Aegon (NYSE:) Asset Management, told Reuters.
“Fund managers will treat this part of the investment case with scepticism. In particular, because it involves growing the investment bank.”
Growth will require a breakthrough in select segments, namely the buying and selling of European interest-rate products, equity derivatives and securitisation where Barclays is currently ranked outside the sector’s top five players.
Rupak Ghose, a corporate strategist and financial markets analyst, said the strategic objectives outlined by Barclays were unlikely to bolster the bank’s shares over the long term.
“This is a big return of capital but I fear a dead cat bounce,” he said.
($1 = 0.7897 pounds)
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