Goldman Sachs Prepares for Layoffs as Deal-Making slows

Business

Jason Ryan, Staff

Courtesy of Financial Times

Goldman Sachs is a leading American multinational investment bank and financial services company headquartered in New York City. The company provides a wide range of services to a substantial and diversified client base that includes corporations, financial institutions, governments, and individuals. 

Goldman Sachs is preparing for a round of layoffs that could come as soon as next week due to low deal-making. At the end of June, Goldman had about 47,000 employees across investment banking, trading, asset and wealth management, consumer banking and operational functions. The job cuts can greatly affect employees across the company. 

Deal-making in the United States so far this year has totaled about $1.2 billion, compared with $2 billion a year ago in 2021, according to the data firm Dealogic. Initial public offerings raised about 95 percent less through the first half of the year than the first half of last year, according to EY, an advisory firm. With this, the number of deals has fallen about 73 percent.

Goldman typically revisits its headcount every year, letting go of employees based on performance and to match the bank’s needs. It had paused that program during the pandemic, which also coincided with a record period for deal-making, when bankers complained of being overworked. The program typically lays off 1 to 5 percent of workers; this round of layoffs is likely to be at the mid of that range. 

Goldman’s Chief Financial Officer, Denis Coleman, told analysts in July that the bank was “probably reinstating our annual performance review of our employee base at the end of the year.”

The move comes as the Federal Reserve’s effort to tame inflation by raising rates has somewhat cooled deal-making and raised concerns that the U.S. economy will tip into recession. The war in Ukraine has added further uncertainty to the mix.

With this however, Goldman reported in July that its second-quarter profit had dropped nearly 50 percent from a year earlier, to just under $3 billion. Revenue from Goldman’s investment banking division fell 41 percent from the same period in 2021. At that time, the bank said hiring for the rest of the year would slow.

Still, for executives across Wall Street, assessing the requisite size for layoffs can be difficult. This is a milestone as something like this has not formally existed in the past two years. Although it may be just a modest decrease over the company, it will still cause anxiety among employees. It will be interesting to see what Goldman Sachs’ headcount is at the end of the year. These layoffs are crucial to see if other job cuts on Wall Street go ahead with this trend. 

  ryanj21@lasalle.edu

Elon Musk buys Twitter for a whopping $44 billion

Business

Jason Ryan, Staff

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Shortly after becoming a majority shareholder with a 9.2 percent stake in the social media platform, Elon Musk has bought Twitter for $44 billion. Source: NPR

On Monday, Elon Musk, CEO of Tesla, Inc. and founder of SpaceX, purchased social media platform Twitter for $44 billion. Musk, the outspoken CEO, and the richest man on Earth, according to Forbes, plans to take the social media company private, and has said that he wishes for Twitter to adhere more closely to the principles of free speech, which, in a statement, Musk called, “the bedrock of a functioning democracy.” 

This deal caps off a hasty episode in which the billionaire became one of Twitter’s largest shareholders, buying a 9.2 percent stake of the company. Afterwards, Musk was offered and turned down a seat on its board and decided to bid to buy the entire company all in less than a month.

Under the terms of the deal, shareholders will receive $54.20 in cash for each share of Twitter stock they own, matching Musk’s original offer and marking a 38 percent premium over the stock price the day before Musk revealed his stake in the company.

The offer became more concrete once Musk announced in a Securities and Exchange Commission filing that he received commitments for $46.5 billion to help finance the potential deal. This included about $25.5 billion in debt financing from Morgan Stanley Senior Funding and other firms. He said he committed about $21 billion in equity financing.

Though Musk has indicated that his primary interest in Twitter has to do with what he views as the company’s censorship of free speech, Musk’s critics are concerned that the billionaire’s control over the platform could result in the silencing of their voices and others with whom he may disagree, given that he’s often blocked critics from his personal account.It is too premature to say what Musk is to do with Twitter, but it is obvious he clearly intends to make his presence felt and heard around the social media platform. Musk has repeatedly stressed in recent days that his goal is to bolster free speech on the platform and work to “unlock” Twitter’s “extraordinary potential.” We will be following this story in the coming week if there are any major updates.

Elon Musk is now Twitter’s largest shareholder

Business

Jason Ryan, Staff

Elon Musk’s newly disclosed 9.2 percent stake in Twitter Inc. has made him the largest shareholder of the social media-company, topping out numerous financial institutions. To put into perspective, Musk’s shareholding is four times greater than that of Jack Dorsey, who stepped down as chief executive in November.

Musk’s purchase comes after a bout of criticism aimed at the social media company. The outspoken Tesla CEO polled people on Twitter last month about whether it adheres to free speech principles. He later said he himself was considering building a new social media platform. It is evident that was not the case. 

The news that Musk would be joining Twitter’s board of directors after becoming the platform’s largest shareholder sparked immediate speculation over how much the billionaire tech entrepreneur might shake up the social media company. Moreover, people speculated about how receptive the current board might be to having him on the team.

That being said, hours after his holding in the company was set public, Musk sought to launch a poll asking whether people want an edit button, something that has been long called for and perhaps something he personally wanted. In a tweet on Tuesday, Twitter Chief Executive Parag Agrawal said, “through conversations with Elon in recent weeks, it became clear to us that he would bring great value to our Board”, it seems Elon is already doing just that. 

Elon Musk

Elon Musk takes a 9.2 percent equity stake in the social-media company Twitter, exceeding large institutions and former CEO Jack Dorsey. Source: BBC News

On April 5, Twitter announced that it has been working on an edit button and that it will be rolled out soon to certain testers of the social media platform. In a later statement, Twitter executives announced that this feature and rollout are unrelated to Musk joining the board, although business critics and social media analysts are skeptical of this statement’s honesty.

Musk reported owning almost 73.5 million shares of Twitter as of March 14, according to a security filing Monday. Shares in the platform soared following Monday’s revelation that the Tesla founder had become the largest shareholder in the company. This means that stake has already grown in value and is now worth more than $3 billion.

According to a filing with the SEC, Musk’s term is set to expire in 2024. For his entire board term or 90 days after, Musk cannot be the beneficial owner of more than 14.9 percent of the company’s common stock outstanding.

It’s too soon to think about how much influence Musk will have as a director; however, social media expert Casey Newton points out that it is not the first time a big tech firm has gained a stance on Twitter. Microsoft chief executive Steve Ballmer once bought a four percent share of the company “and essentially did nothing with it”.

Yes, it is too premature to say what Musk is do with this stake, but he recently called out Twitter for allegedly falling short of “free speech principles” and very recently asked users if they want an edit button feature. It is obvious Musk clearly intends to make his presence felt and heard around the social-media platform. It will be interesting to see what comes in the coming weeks. Will Musk push for more features within the platform? Or will he push for free speech and try to allow certain people back on twitter? Only time will tell.

La Salle resorts to raising funds via a MLM scheme | Foolegian

Foolegian, Satire

YoungBoy Never Broke Again, Staff

“Hey girl!”

It’s the Instagram DM everybody dreads. “You’ve clearly got a LOT going on, LOVE your posts by the way… but I sense something special about you so I wanted to reach out.” You can probably guess where this is going next.

“Have you ever heard of La Salle University? It’s the cutest little school in Philly ranked #1 for earnings on its MBA program! My name is McKayleighanne and the reason I’m reaching out is because I’m looking for people to join our team where you can earn above and beyond what you’re currently making. I’d love to connect with you on a business level, is this an opportunity you’d be interested in?”

Um, what? I’m a little unclear on the “opportunity” here, but hey, she said it’s the “cutest little school,” that sounds nice… I’ll bite. I shoot back a message:

“Can I get a little more information?”

That was the single worst mistake of my life. McKayleighanne was the fisherman and I was a fifty-pound bass in open water, begging to be reeled in. And, I’m ashamed to admit, she got me, hook, line and sinker, with this message: “Here’s what we do. We recruit stellar girlies like you to join our team and spread the message about La Salle. By joining our team of girl bosses, you will have access to marketing materials that will help you recruit other dreamers and believers. Together, we comprise La Salle University and with your help, we can continue making more money than you can even dream of!”

In my defense, I wanted to make money. I admit, the details of her goal and execution strategy here were a bit unclear, but I felt as though I’d be joining a welcoming community. Little did I know, she wanted to make money off of me.

It wasn’t until I was already four years into the business that I figured that out. Four years of grinding and toiling away with this community of girl bosses, recruiting every poor sucker who fell victim to our trap. Ultimately, the scheme worked like this: first, reach out like McKayleighanne did to me. Second, get the potential recruit to invest a small sum of $1. Third, promise that they’ll get a return on their investment the more people they recruit. Fourth, ask them for another investment a month later, this time at a rate twice the initial investment. And then the next month. And then the next. And then the next.

Before you know it, you’re four years and $281 quadrillion in the hole. Granted, I made back about 10 percent of that by recruiting other girlies. But still, it took me quite some time to realize that this was an extremely effective method of fundraising for La Salle — and an awful investment on my part. I have to give them credit where credit is due; they really cornered the market on vulnerable wannabe girl bosses like me.

As for what they’re doing with all that money, I’m out of the business so I’m not too sure. I did hear rumors that La Salle just got a $1 billion grant and they’re finally using some of that money on their School of Arts & Sciences, but who knows… it is a business at the end of the day, so perhaps Founders’ will get ten more basketball nets because that would be really wise. With all that being said, what I do know is that they really got me. On the bright side, at least they have a lot of funds! And that’s all that matters at the end of the day.

I am in crippling debt, though. So it goes.

Powell calls for regulations on digital currencies

Business

Elizabeth McLaughlin, Editor

Header Image: The Washington Times

On Wednesday, March 23, Federal Reserve Chairman Jerome Powell discussed the need for consumer protection when it comes to digital currencies. The Bank for International Settlements, an organization that includes central bankers from around the world, organized the panel at which Powell spoke. There are two kinds of new technologies that Powell is concerned with: stablecoins and central bank digital currencies.

The former are a kind of cryptocurrency tied to a commodity or the dollar; the latter are government-issued digital forms of currencies, like the U.S. dollar. Back in Jan., the Fed released a study on stablecoins that identifies the form of currency as “a possible breakthrough innovation in the future of payments.” The Fed understands that stablecoins have the potential to significantly impact the banking system, both on traditional banking and credit provision. As for digital currencies, the Fed is researching the topic but has not decided whether to issue their own.

Although Powell did not provide much detail as to the content of these regulations, he did say that these digital transactions should be regulated the same as other transactions executed by banks. Powell is particularly concerned with the perceived lack of consumer awareness of the risk associated with cryptocurrency: many popular investments lack government protection of losses. The rate of adult Americans who invest in cryptocurrency is 16 percent and it seems that the hype is only growing, meaning that more Americans are going to be exposed to unregulated risk by investing in crypto in the coming years. That is, however, unless the government develops more robust laws and regulations concerning digital currencies.

Besides personal loss and privacy concerns, Powell discussed how cryptocurrency assets have been used for “illicit activity,” such as money laundering. On top of that, Sen. Elizabeth Warren has expressed concern regarding crypto use and evading sanctions on Russia.

Global stocks decline as more firms cut ties with Russia

Business

Jason Ryan, Staff

Global financial stocks tumbled on Monday, March 7 with increasing investor fears about the potential for economic damage and pressure on consumer spending as the price of oil soars following Russia’s invasion of Ukraine.

Lenders, investors and dozens of payment companies with links to Russia have been cutting ties with the country. These moves and news come amidst Western sanctions against Russia. While the United States’ sanctions have been aimed at limiting the flow of Western money and damaging Russia’s economy, Ukraine has called for the boycott of Russian energy exports.

Major accounting firms Deloitte and EY said on Monday they are cutting ties with Russia, mirroring moves by fellow Big Four accounting and consultancy firms KPMG and PwC. These firms and their work are often key to businesses obtaining international investor backing. 

Display shows financial information in a window of the headquarters Swiss bank UBS in Zurich

Global stocks drop more than two percent, hitting a bear market as oil prices briefly rise to $130 a barrel. 

U.S. stocks fell in morning trading after oil prices burst above $130 a barrel Sunday night, threatening to upset calculations for company costs, consumer behavior and the overall course of inflation. The losses for major indexes deepened on Monday afternoon as investors dialed back on risk by selling shares of companies across much of the economy, with the tech-heavy Nasdaq Composite falling into a bear market by declining to 20 percent below its November high.  

S&P 500 banks (.SPXBK) fell 4.8 percent on Monday and the broader S&P 500 financial sector (.SPSY) closed down 3.7 percent as the yield curve — the difference between longer and shorter-dated U.S. Treasuries — narrowed, suggesting pressure on U.S. banks’ profitability. The bank index has fallen more than 10 percent since the conflict escalated on Feb. 24.  

Shares in U.S. payment companies tumbled on Monday with American Express Co. (AXP.N) closing down 8.0 percent after it said on Sunday it was suspending all operations in Russia and Belarus, joining Visa Inc. (V.N), which fell 4.8 percent and Mastercard Inc. which fell 5.4 percent after their similar announcements the previous day. Payments company PayPal Holdings Inc. (PYPL.O) is also down 6.3 percent.
Investors are growing fearful that the consequences of the war in Ukraine, now in its 14th day, could become increasingly dramatic for financial markets. This conflict has already  upset commodity markets, increased tensions between Moscow and the Western world and led to Russia being unplugged from much of the global financial system. It is also evident more economic sanctions are to come.

St Joseph’s University new residence hall for students with autism

News

Kylie McGovern, Editor

On Feb. 25, fellow Philadelphia university and basketball rival, St. Joseph’s University, announced that it will be opening a residence hall for students with autism. St. Joseph’s, has the Kinney Center for Autism Education and Support and plans to open its first residence hall specifically for students on the spectrum. This new residency will have a capacity of up to 17 student residents and a student adviser. This hall is called Saint Albert’s Hall and it will undergo $250,000 in renovations this summer. Most recently, Saint Albert’s Hall was used for COVID-19 housing. The new residence hall is meant to be for the first year or two, after which students will transition to other housing. The Kinney Center’s director Angus Murray explains that, “We came to the realization that the residence hall was a spot where a lot of our folks were struggling. Academically, they’re usually able to make the cut and succeed, but because of their social skills, they struggle in the residence halls. So we thought it might be helpful to have what we’re referring to as a longer runway as they transition from high school to college.” St. Joe’s is one of the first Philadelphia colleges to create a living option like this, but other colleges in the area like Drexel, Eastern, Rutgers and West Chester.The annual cost to live there is $12,000, but Angus Murray said St. Joe’s is seeking scholarship funding.

41 students are enrolled in Kinney’s ASPIRE (Autism Support Promoting Inclusive and Responsive Education) program and get help through the center. That number is growing and expected to reach 50 next year on the campus of nearly 6,800 undergraduate and graduate students and next year, enrollment will grow to more than 9,100 when St. Joe’s merges with the University of the Sciences.

The Kinney Center opened in 2009 when Paul Hondros, a St. Joe’s alumnus, was frustrated with the lack of services for his son and he became lead donor. Kinney employs 16 full-time staff members, nine graduate assistants and 125 part-time undergraduate students who provide services to children and adults of all ages. Students in the program are paired with peer mentors for the first two years and then eventually encouraged to become a mentor. Staff help them improve social skills, organize and manage time and prepare for careers. The center also has social events. ASPIRE students, who pay $8,000 for the services; take a full course load; participate in clubs, sports and activities and are in a variety of majors. They maintain an 84 percent six-year graduation rate, similar to St. Joe’s overall average. 

To design the new residence hall, St. Joseph’s is partnering with Thomas Jefferson University design students. Eighteen students and two professors from Jefferson’s College of Architecture and the Built Environment went inside the residence hall at St. Joe’s to take pictures and measurements, and to meet with Kinney staff.

Editor’s Note: Regardless of athletics riverlaries, I am happy to see different schools in Philadelphia working together to make living on campus and attending college a more accessible experience.  

Texas suing Meta over facial recognition technology

Business

Gibson McMonagle, Staff

Header Image: Forbes.com

Texas is seeking hundreds of billions of dollars in penalties due to Meta’s Facebook collecting facial recognition data. 

Facebook is falling into problems with the government again for violating privacy terms with their customers. Facebook’s parent company, Meta, is taking the heat due to selling data of people’s faces to third parties. The problem comes because they did not destroy the data in a timely manner. 

Facebook and Meta have both been using facial recognition for a while now to help support their programs. Meta has a budding virtual reality system and Facebook’s social media supports facial recognition to increase protection on accounts. 

One of the complaints in the files reads “Facebook repeatedly captured Texans’ biometric identifiers without their consent not hundreds, or thousands or millions of times — but billions of times, all in violation of CUBI and the DTPA.” CUBI is the Capture or Use of a Biometric Identifier Act. This act requires privacy for participants using the technology. DTPA stands for the Deceptive Trade Practices Act. Facebook is being accused of violating this act by selling data captured from the users of their products. 

What is interesting about this lawsuit is that Facebook shut down its facial recognition feature in November. They wanted to weigh the positives of using it while also thinking about the growing concerns of holding users’ data. 

Not too long ago, Facebook was in a major lawsuit for how they handled the data that they have been collecting. The previous lawsuit had Facebook paying $650 million for not informing their users of the data they were collecting. 

Texas Attorney General Ken Paxton states, “Facebook will no longer take advantage of people and their children with the intent to turn a profit at the expense of one’s safety and well-being.” Texas is in full swing to stop “yet another of Big Tech’s deceitful business practices,” said Paxton.

Right after the lawsuit was announced, Meta stated that they would delete the data of over one billion users. The company seems to be fully prepared to deal with the lawsuit and plans to fight against the claims made against them. Not many states have been focusing on biometric privacy, and now Texas is stepping into the ring on this problematic feature.

La Salle’s business school gets its Association to Advance Collegiate Schools of Business accreditation extended

News

Kylie McGovern, Editor

Header Image: Photo courtesy of Kimmel Bogrette

On Feb. 8, La Salle University announced that the Association to Advance Collegiate Schools of Business (AACSB) extended its accreditation of La Salle University’s School of Business through 2027. This accreditation involves a rigorous review process every five years. To achieve accreditation, the school or program must adhere to quality standards like business management and knowledge through faculty scholarship, high-impact teaching and curricula, meaningful interaction between faculty and students and the achievement of specific learning goals. The AACSB accreditation is considered the highest standard of excellence in business education. This accreditation is prestigious because less than five percent of the 13,000 business schools globally earn AACSB accreditation. Therefore, this accreditation makes La Salle’s School of Business one of the leading business schools in the world. 

Yusuf Joseph Ugras, Ph.D,  professor of accounting and the school of business’s  interim dean, explains, “AACSB accreditation is a source of tremendous pride for our faculty, staff, students, and alumni and it serves as the benchmark credential of exemplary business education—one that is reserved for the top tier of business schools globally.” He continues saying, “earning this accreditation extension from AACSB further validates the quality of our teaching, learning, and programmatic offerings at La Salle.” 

According to the AACSB, business schools should familiarize their faculty and administration with the AACSB accreditation guiding principles and standards along with the initial accreditation process. Taking the time to understand the accreditation process and standards before submitting an eligibility application provides a greater understanding of AACSB accreditation, which is typically reflected in a school’s application. To maintain this accreditation, La Salle’s business school must pay an annual fee of $5,950 and maintain the AACSB’s quality standards. This accreditation to last until 2027 is positive news for the business school in particular as well as the posterity of the entire university. 

Member of the business school Nicholas “Nicky” Signoretta, who is studying business systems and analytics (BSA) and finance said that this accreditation is “exciting for me and my classmates in the business school as well. I feel like getting the AACSB accreditation extended only makes my degree more valuable while also congratulating the business school for its prestige that its students already know. I am so proud to be a part of this program and I am excited for what the future holds now that its AACSB accreditation has been extended.”