The week’s news included; Supreme Court blocks Biden student loan forgiveness plans, Boohoo’s coup at Revolution Beauty ends in chaotic fail, Cineworld files for bankruptcy Thames Water facing collapse.
Below are our top 10 stories that you need to know about. Be sure to check our twitter page, Facebook page and Instagram Page, for regular posts of important headlines. Get all the important stories and insights straight into your inbox by subscribing to our mailing list here.
Opinion articles of the week:
- City A.M. – Let’s be honest, ESG investing will actually hurt the environment
- The Guardian – As HSBC quits and hybrid working stays, is this the end for Canary Wharf?
- CNBC – Why the electric vehicle boom could put a major strain on the U.S. power grid
- City A.M – Traditional media revenue streams won’t stand a chance in a race with AI
1. GOOGLE BLOCKS NEWS ACCESS IN CANADA
Google is blocking local news in Canada following the announcement of a controversial new law. The Online News Act requires aggregators of news content like Google and Facebook to pay news outlets when content is shared on their platforms. Google says the law is “unworkable” in its current format and will now block access to news for its Canadian users. Meta announced a similar move two weeks ago over the same issue. The Canadian government says the new law is necessary to properly compensate struggling news producers. This could prove counterproductive as without Google’s traffic, news producers in Canada will lose out on crucial ad revenue. At Canadian outlet the Globe and Mail, for example, Google accounts for 30% of its traffic.
In 2021, Australia passed a similar law to compensate news outlets but faced the same backlash from Google and Meta. ultimately the government had to make concessions. Canada may find itself in a similar position if the news blackout on Google and Meta affects news outlets.
2. UK AND EU TO SIGN MOU
The UK and EU are set to sign a Memorandum of Understanding (MoU) for financial services, boosting regulatory cooperation. Financial markets have been craving closer ties for over 2 years since the UK fully lost access to the single market. The MoU will facilitate exchanges of views on regulatory and market developments. It also sets the foundation for closer cooperation between the two jurisdictions.
This marks a positive step forward in post-Brexit UK-EU relations. The past two years have been marred by antagonistic rhetoric. Similar MoU agreements have been reached between the UK, USA, Japan and Singapore.
3. SUPREME COURT BLOCKS STUDENT LOAN FORGIVENESS
The US Supreme Court has blocked Joe Biden’s plans to grant student loan forgiveness. The Republican dominated court ruled 6-3 that the President does not have the power to cancel student debt. Under Biden’s plans roughly 40 million Americans sees roughly $10,000 of debt forgiven and in some cases up to $20,000. Now these plans have been blocked. Biden’s previous loan forgiveness schemes, such as the $42 billion cancellation of student loan debt in May, were also deemed unlawful. Americans have $1.6 trillion in student loan debt. Unlike the UK, students loans are treated as standard unsecured debt and are typically not linked to income. Biden’s plans were designed to help alleviate the hardship of debt for many Americans. BBC News looks closer at the matter.
4. CHAOS AT REVOLUTION BEAUTY AGM
There was chaos at Revolution Beauty’s annual general meeting (AGM) as its largest shareholder, Boohoo, sought to oust Revolution’s leadership. At the meeting, Revolution’s CEO, CFO and Chairman were fired and rehired at the same meeting. Boohoo led the move to oust the leadership after a recent scandal. 75% of investors voted to remove the trio and they were initially removed, leaving just one senior director, Jeremy Schwartz. Boohoo had been attempting to appoint its own leadership candidates. As the last remaining director however, Schwartz then immediately reappointed the dismissed trio to their previous roles. Boohoo staunchly criticised Schwartz’s actions and may approach the London Stock Exchange and the FCA about the events. Revolution Beauty is listed on the London Stock Exchange but its shares had been suspended since September 2022 due to financial irregularities. After the AGM however, Revolution shares resumed trading and soared by 59%.
5. CINEWORLD TO FILE FOR ADMINISTRATION
Cineworld is to file for administration in the UK after it failed to find a buyer. The cinema chain will remain open as the company undertakes a restructuring process. Trading of shares of Cineworld, which now trade at just 0.6p, will be suspended on the London Stock Exchange. Assets will be moved to a Cineworld subsidiary then a new entity owned by Cineworld lenders will take full ownership of the subsidiary.
This will however, see current Cinema shareholders see their holdings become worthless. The plan is life saving for the chain as it could raise up to $8 billion in liquidity. Cineworld is the world’s second largest cinema chain behind AMC Theatres.
6. THAMES WATER FACING COLLAPSE
Thames water is on the brink of collapse and is fighting for its survival. The water company has billions of pounds of debt which it is struggling to service. For the past 7 years the costs of investing, dividend payments and paying interest on its debt have exceeded their profits. Although external dividends to shareholders have not been paid since 2018, in 2022 £37 million was paid in internal dividends to its immediate parent company. This was despite a huge ongoing scandal where sewage was found to be leaking into our rivers and oceans due to poorly maintained pipes. Furthermore, thousands of litres of drinking water are also being lost on a daily basis through leaks. Ultimately, CEO Sarah Bentley resigned over this matter last week.
New funding must be obtained to keep the company afloat and discussions are ongoing to secure its future. In any case, Thames Water has said supply will be not affected in any case. If no funding is secured, the government will step in to temporarily acquire the company until a buyer is found. Thames Water is in crisis and many have called for its permanent nationalization.
7. POKEMON GO MAKER CUTS JOBS
Niantic, the maker of viral video game Pokémon Go, is cutting 25% of its staff as demand dwindles. Pokémon Go exploded in popularity after it launched 2016 and even broke the record for most downloads in a week on Apple’s App Store. The game relied on players’ GPS and required them had to travel in real life to catch certain Pokémon within the game. Parks and public spaces became filled with players converging to catch Pokémon. Recently however, its numbers have fallen and expenses are outstripping revenue. Now, Niantic will cut 230 workers, representing 25% of its workforce. It’s Los Angeles studio will close and two new games will be cancelled.
8. NEW LITHIUM MINE TO OPEN IN UK
A new lithium carbonate mine is opening in the UK. Lithium carbonate is a crucial element used in electric cars and other technology. The mine will open in Cornwall and roughly 300 jobs will be created. The mine could have 30 years worth of resources and produce 20,000 tonnes of lithium carbonate equivalent annually. This could meet two thirds of Britain’s battery demand. Imerys and British Lithium are undertaking a joint venture to extract the lithium carbonate. The pair aim to produce enough lithium carbonate to supply 500,000 electric cars by 2030. This is an important development that could help the UK meet its net zero targets and expand the use of green tech.
9. VIRGIN GALACTIC COMMERCIAL SPACE FLIGHT
Virgin Galactic’s first ever commercial space flight was a success. The flight lasted just 72 minutes and reached the edge of space allowing passengers to experience weightlessness. The first passengers were three Italian scientists who were conducting research. Tickets cost a whopping $450,000 and many passengers have been waiting for over 10 years for the opportunity. The aircraft, Unity, will make just one mission a month to space. Billionaires are battling to offer space tourism experiences and conduct more research. As the technology improves and becomes cheaper, space travel could be accessible to the wider society.
10. HSBC LEAVES CANARY WHARF HQ
HSBC is leaving its iconic Canary Wharf tower at 8 Canada Square. The bank’s lease expires in 2027 and it will be downsizing its office space. After the pandemic, HSBC made a commitment to retain flexible working for staff. Consequently, they planned to cut 40% of their office space. HSBC is reportedly exploring buying BT’s former headquarters in the City, much smaller than its current office space. This will bring an end to over 20 years in its iconic Canary Wharf HQ that towers above the skyline. There has been no announcement as to what the tower will be used for after HSBC leaves.
