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Memory chip maker Micron launches new pricing experiment for stability

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© Reuters. FILE PHOTO: The logo of U.S. memory chip maker MicronTechnology is pictured at their booth at an industrial fair in Frankfurt, Germany, July 14, 2015. REUTERS/Kai Pfaffenbach

By Jane Lanhee Lee and Chavi Mehta

SAN FRANCISCO (Reuters) – Chipmaker Micron Technology Inc (NASDAQ:MU) on Thursday announced it was experimenting with a new pricing model for its chips called forward pricing agreements that would aim to stabilize the steep price fluctuations that plague the industry.

“I’m super excited to announce that a top 10 customer has already signed up on this model with us, a more than $500 million a year of revenue for a three year agreement,” said Sumit Sadana, Micron’s chief business officer at the company’s investor day event.

He declined to project how much of the long-term agreements with customers would migrate to this new model of pricing, and emphasized that this was an “experiment”. He said the current long-term agreements are based on volume and not on prices. The forward pricing agreements have both volume and pricing.

When asked about whether the contracts would be enforceable Sadana acknowledged that one party or the other would always be on the wrong side of the price.

Sadana also said that Micron does not plan to lower its gross margins to push the forward pricing agreements ahead.

“There’ll be ups and downs, but the benefits ultimately outweigh the risks of actually doing an agreement like this,” said Sadana.

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Dow Futures Tick Lower After Wall Street Sell-off Intensifies

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© Reuters.

By Oliver Gray 

Investing.com – U.S. stock futures were trading lower during Wednesday’s evening deals, after major benchmark averages finished the regular session sharply lower, with the Dow Jones Industrial Average posting its biggest loss since 2020 after retail earnings indicated rising inflation pressures weighing on corporate profits.

By 6:42pm ET (10:42pm GMT) Dow Jones Futures and S&P 500 Futures were each trading 0.1% lower while Nasdaq 100 Futures fell 0.2%.

In extended deals, Cisco Systems Inc (NASDAQ:CSCO) dipped 12.9% after results as the as the company forecasted a surprising decline in revenue for the current quarter. Q3 EPS came in at 87 cents versus 86 cents expected while revenue came in at $12.8 billion versus estimates of $13.34 billion.

Bath & Body Works Inc. (NYSE:BBWI) fell 6% after reporting, as the company forecasted lower-than-expected second-quarter earnings. Q1 EPS of 64 cents versus 53 cents expected on revenues of $1.45 billion versus $1.44 billion expected.

Synopsys Inc (NASDAQ:SNPS) gained 3.5% as the company reported Q2 EPS of $2.50 versus $2.37 expected on revenues of $1.28 billion versus estimates of $1.26 billion.

During Wednesday’s regular trade, the Dow Jones Industrial Average shed 1,164.52 points, or 3.57%, to close at 14-month lows of 31,490.07 and posting its largest daily losses since June 2020. The S&P 500 traded 4.04% lower to 3,923.68 while the NASDAQ Composite dropped 4.73% to 11,418.15.

Among stocks, Target Corporation (NYSE:TGT) shares tumbled 24.9% Wednesday after the retailer reported first-quarter earnings that were much lower than Wall Street estimated due to rising costs for fuel and compensation.

Major tech companies were also hit amid the sell-off with Block Inc (NYSE:SQ) down 3.2%, Amazon.com Inc (NASDAQ:AMZN) falling 7.2%, Microsoft Corporation (NASDAQ:MSFT) dipping 4.8% and Apple Inc (NASDAQ:AAPL) down 5.6%.

On the bond markets, United States 10-Year rates were at 2.884%.

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New York Times pauses return to office for workers

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© Reuters. FILE PHOTO: The New York Times building is seen in Manhattan, New York, U.S., August 3, 2020. REUTERS/Shannon Stapleton

(Reuters) – The New York Times Co said on Wednesday it is pausing its plan to ask employees to return to office as COVID-19 cases rise in the United States.

Employees of the company, headquartered in New York City, were previously set to return to office in June.

The United States is averaging nearly 97,000 new cases a day, up from about 73,000 a week ago, according to a Reuters tally, with New York City raising its COVID-19 alert level to high on Tuesday.

“Based on the city’s guidance and the advice of our health experts, we are pausing the start of our Expected Phase of return to office until conditions improve,” the company said in a note sent to its staff.

The company also said it strongly recommends that employees wear masks in common areas at its facilities, including elevators, meeting rooms, restrooms and pantries, where social distancing is not possible

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Hedge fund Melvin Capital tells investors it plans to shut down -letter

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2/2

© Reuters. FILE PHOTO: A Wall Street sign is pictured outside the New York Stock Exchange in New York, October 28, 2013. REUTERS/Carlo Allegri

2/2

By Svea Herbst-Bayliss

(Reuters) – Hedge fund manager Gabe Plotkin, who boasted one of Wall Street’s best investing records, on Wednesday told investors that he is shutting down his firm, Melvin Capital, after it suffered billions of dollars in losses.

“The appropriate next step is to wind down the Funds by fully liquidating the Funds’ assets and accounts and returning cash to all investors,” Plotkin wrote in a letter reviewed by Reuters on Wednesday.

Melvin Capital had $7.8 billion in assets at the end of April and the fund had lost 23% since January, a person familiar with the fund’s finances said.

This year’s losses come on the heels of steep losses in 2021 when Melvin Capital ended the year down 39%. The firm bet that shares of GameStop (NYSE:GME) would tumble but was battered when retail investors took the other side and sent the stock surging.

The firm had $12.5 billion in assets at the start of 2021.

In the letter Plotkin said he had already raised a substantial amount of cash and cut the funds’ exposure.

A spokesman for Plotkin declined to comment.

At the end of the first quarter Melvin’s biggest investments included bets on Live Nation Entertainment (NYSE:LYV), Hilton Worldwide Holdings (NYSE:HLT), Amazon (NASDAQ:AMZN) and Datadog (NASDAQ:DDOG). Their stock prices have fallen sharply in the last weeks, sparking speculation that a hedge fund might be trying to unwind positions.

Plotkin was a star investor at Steven A. Cohen’s hedge fund SAC Capital Advisors and launched his own firm after SAC pleaded guilty to criminal insider trading charges. Melvin Capital quickly attracted attention and powerful investors and ended 2020, the year the pandemic began, with gains of 52.5%.

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