It's time now for some business news,
and we'll start with the spectacular fall from grace of
We Work.
The company once valued at an extraordinary $47 billion
has now filed for bankruptcy in the US.
Shall Pelegha is here to tell us more.
Hi Hexi, definitely a humbling turn of events for the
Co working space rental company that is backed by a
billions of Japanese groups.
SoftBank We Work has been struggling with the expensive rental
agreements it had signed before the COVID-19 pandemic and lower
than expected occupancy rates because of the rise
in remote work. The company said it had struck an
agreement with almost all of its creditors to convert some
$3 billion
in existing loans and bonds into equity in the restructured
group.
Filing for bankruptcy means We Work will be able to
terminate leases early with minimal financial penalty.
It currently has $13 billion
in lease obligations that need restructuring.
The company saw a meteoric rise after its creation in
New York in 20,
10, buoyed by its charismatic Co founder Adam Newman.
But this all came crashing down in 2019 when the
group's attempt
to go public exposed its heavy losses as well as
corporate governance concerns.
Adam Newman left the company that year,
and in 2021. Finally, the company did eventually go public
at evaluation of just $9 billion
and Newman did release a statement on the filing of
on Monday saying it's been challenging for me to watch
from the sidelines since 2019 as we work has failed
to take advantage of a product that is more relevant
today than ever before.
I believe that with the right strategy and team,
a reorganization will enable we work to emerge successfully.
Well, as we just saw the effects of the pandemic
still being felt in the economy in Germany,
restauranteurs are worried as the government decides on whether to
end a pandemic era.
Tax break the cut the value added tax to
7%. The current regulation is valid until December 31st,
but its future is set to be decided in the
next few weeks.
Liza Herbert has a story.
When the chef opened his restaurant in 2020,
he never envisioned closing it after just a few years.
But with the coronavirus pandemic and Russia's invasion of Ukraine
driving up prices of basic food items,
plus rising interest rates and consequential labor shortages,
keeping it open has been a feat.
Now it may have to survive the end of a
vital tax break,
too.
The challenge for us is
OK now we have more expensive products.
Now we have less labor force
and now we have to raise the prices.
But if we raise the prices,
people complain and they they leave bad reviews.
So what should we do?
Just close. The German government slashed the value added tax,
known as VAT, to 7%
during COVID-19 lockdowns. Now that number is expected to rise
to
19% by the end of the year.
According to the Finance Ministry,
it would cost €3.3 billion to keep the tax break
in
2024. However, the German Hotel and Restaurant Association says ending
it would lead to perilous outcomes.
12,000 businesses said they would then give up.
They would then close because they see no prospects
and I think you have to take that very seriously.
The association also estimates that
93% of business owners would have to pass on a
tax increase on meals to their customers,
many who are already facing budget constraints as the cost
of living rises.
Let's take a look at how the European markets have
opened this Tuesday,
all trading lower as the positive momentum from last week's
Fed decision to pause interest rate hikes has stalled.
As you can see, the Paris get going down just
under half a percent,
the Dax and Frankfurt down over 1/3 of a percent,
and the Footsie in London down had a quarter of
a percent.
Let's look at the Asian stock markets this Tuesday as
well.
Most major indices and all major indices,
they're trading lower as well.
The Nikkei down down
1.334% at the close, the Hang Seng and Hong Kong
down over 1 1/2%
as well. Chinese trade data,
the main concern? Their investors parsing through all that data
showing 1/6 consecutive month of a decline in exports,
and the Swiss banking giant UBS is feeling the effects
of its forced takeover of embattled rival Credit Suisse at
the beginning of the year.
The group posted a $785 million loss in the third
quarter because of expenses linked to that deal,
which was completed in June.
It has, however, said that it's a core wealth business
is stabilizing with net new money in this in this
business of $22 billion
thanks to the arrival of new customers
and finally in the US,
Netflix's CEO has said that talks with striking Hollywood actors
were ongoing after their union failed to reach an agreement
with major studios.
The union said it was determined to secure the best
deal and bring a responsible end to the walkout,
which has lasted four months.
They are demanding higher compensation in the streaming era,
as well as protections around the use of artificial intelligence.
The studios said they made their last,
best and final offer on Saturday.
Take a listen to Netflix CEO Ted Sarandos.
Yeah, we're right in the thick of it.
So it's would be impossible for me to talk much
about it.
Yeah, OK, we all we we're in the business of
telling stories and we got to wait.
That's what we want to do every day.
So it's grind to a halt for a few months.
And so we're going to try our best to get
things up and running and
get the output back up for our fans too.
So we'll be keeping a close eye on that story
Haxi in the days and weeks to come.
Shout Peleka, where the did at the day's At top
business stories.
Thank you very much.