Good morning. A quick reminder to make your Valentine's Day restaurant reservations ASAP, because a candlelit dinner just doesn't hit the same at 4:30. —Neal Freyman, Matty Merritt, Jamie Wilde | | | |  | Nasdaq | 14,417.55 | | | | | S&P | 4,589.38 | | | | | Dow | 35,629.33 | | |  | 10-Year | 1.765% | | | | | Bitcoin | $36,934.49 | | | | | Meta | $249.05 | | | | *Stock data as of market close, cryptocurrency data as of 9:00pm ET. Here's what these numbers mean. | - Markets: Stocks climbed for a fourth straight day as investors' jitters over upcoming rate hikes seem to have mostly worn off. But the tone changed later in the afternoon, when Meta got crushed after its earnings report…and dragged a bunch of tech stocks down with it.
- Economy: Private companies shed 301,000 jobs in January as Omicron thwacked the labor market, according to a report from ADP. This jobs data, which is viewed as the prelude to the much more important government jobs report due Friday, is adding to concerns that Friday's numbers could be a bit ugly.
| | Francis Scialabba Not everyone can pivot as gracefully as Selena Gomez. As it transitions toward a focus on digital worlds, Meta is having heaps of trouble in the real one: Shares of the company previously known as Facebook crashed more than 22% (equivalent to nearly $200 billion wiped off of its market value) after it warned that revenue for the current quarter would come in below forecasts. At the forefront of Meta's challenges is the fact that its social platforms are losing relevance to companies like TikTok. - Facebook's monthly users held steady last quarter at 2.91 billion.
- And daily active users declined from 1.93 billion to 1.92 billion. It's Facebook's first quarter-to-quarter drop in global daily users in its history.
Meta also said that ad sales, which account for the majority of its revenue, have been hurt by Apple's privacy updates and ongoing supply chain issues that've hit marketing budgets. Metaverse to the rescue? As part of its big name change last October, Meta said it would separate its Family of Apps unit (home to FB, Instagram, and Messenger) from other products tied to its push into the metaverse, like its virtual reality headsets. That unit, called Reality Labs, disclosed its financials for the first time: It made $877 million in revenue but lost $3.3 billion last quarter. Reality Labs lost more than $10 billion in total in 2021. It shows that the transformation of Meta into a metaverse company will be a slog (not to mention uber expensive), but one that CEO Mark Zuckerberg believes is necessary for it to become a leader in the "next chapter of the internet." - 24% of the more than 3,000 jobs listed on Meta's website are for AR/VR roles, per the NYT. And the company's already said it's planning to create 10,000 jobs in the EU related to the metaverse.
- Meanwhile, some teams at Facebook and Instagram have shrunk, and employees on those products expect smaller budgets in the second half of the year, according to the Times.
Zoom out: You can't help but juxtapose Meta's woes with the giddiness surrounding its fellow internet giant, Alphabet, whose stock soared 7.5% after a blowout earnings report Tuesday.—NF | | Mike Coppola/Getty Images Yesterday was not a great day for people whose last names begin with Zuck... CNN's president for the last nine years, Jeff Zucker, abruptly resigned. He's also stepping down from his role as chairman of CNN parent WarnerMedia's news and sports division. The media big shot—who previously served as CEO of NBCUniversal, where he was executive producer of the Today show and greenlit The Apprentice—said he failed to disclose a romantic relationship with his colleague, who has been identified as CNN's EVP and CMO Allison Gollust. She's planning to stay on. Zucker explained in a memo that his relationship was discovered during CNN's probe into former anchor Chris Cuomo's conduct. - Refresher: Cuomo was fired in December for helping his brother, former New York Governor Andrew Cuomo, mitigate the fallout from sexual harrassment claims against him.
What will CNN do without its leader? Get three more. Top execs Michael Bass, Amy Entelis, and Ken Jautz have been tapped to co-pilot the network as it heads toward a merger between WarnerMedia and Discovery and the rollout of its hyped streaming service, CNN+. WarnerMedia CEO Jason Kilar said this Cerberus org chart will last until the Discovery deal is completed.—JW | | NBC Before Meta laid an egg in the afternoon, the laughing stock (get it) of the financial world yesterday was PayPal. The company's shares had their worst day ever, cratering nearly 25% in yet another case of a pandemic prodigy hitting a speedbump in the new normal. What is that new normal for PayPal? Lowering profit guidance for the current year and abandoning a target of doubling its active user base to 750 million by 2025. The backstory: The Venmo owner was a high-flying stock during the first waves of the pandemic as more consumers used digital payments and shopped online. In fact, at one point it was worth more than every US bank outside of JPMorgan. But now, due to a variety of factors hitting people's wallets, including supply chain bottlenecks, inflation, and the withdrawing of stimulus measures, it's being uttered in the same breath as Zoom and Peloton as a company whose incredible success during the pandemic was perhaps more characteristic of a one-hit wonder than of a future star. But not everyone is writing off PayPal. Analysts say the company could grow (albeit more slowly) thanks to its foothold in emerging sectors, such as buy now, pay later.—NF | | TOGETHER WITH THE MOTLEY FOOL | | DeepMind Stat: A computer can now code at the same level as an average human programmer. An AI system developed by Google's DeepMind ranked within the top 54% of human coders in a coding contest, marking the first time an AI code generation system performed competitively in programming competitions, DeepMind said. Quote: "Obviously, I didn't approve this." Indie artist Ted Leo, along with a number of other musicians including Jack Antonoff, were furious after finding out this week that the website HitPiece was selling their famous songs as NFTs without their permission (some NFTs had received bids of up to $21.5 million). HitPiece semi-apologized Tuesday night, saying that it would ensure artists get paid if their unauthorized NFT sells, but some are calling the site a scam. Read: Pam & Tommy: The true story of the sex tape that launched the internet. (The Times) | | National Weather Service Welcome to Morning Brew, where we recognize winter storms even when they're not threatening New York. 100+ million people across at least 25 states stretching from New Mexico to Vermont (and even into Canada) are under winter storm alerts through Friday. A massive storm adorably named Landon started its journey yesterday across parts of the South and Midwest, and it's expected to say "howdy" to New England. Some areas are predicting heavy sleet and snow accumulations of up to one foot. - 6,000+ flights have been canceled through Thursday. Southwest Airlines already called a snow day for St. Louis on Wednesday and for Dallas on Thursday.
Clear eyes, full grid, maybe can lose power Wide eyes are on Texas after last year's winter storm that caused widespread electrical outages and killed an estimated 700 people. The freezing temps (as low as 17 degrees Farenheit in Dallas) and ice from Landon could challenge the state's beleaguered power grid. Texas Governor Greg Abbott said Tuesday that "no one can guarantee" there won't be power outages during the storm, contradicting assurances he made in December based on updates the state made to its grid. Even crypto is winterizing…the biggest bitcoin miner in Texas, Riot Blockchain, shut down to conserve electricity ahead of the storm.—MM | | - Washington's NFL team unveiled its new name: the Commanders, which sounds like a team about to get spanked by the Harlem Globetrotters.
- Four men believed to have sold heroin laced with fentanyl to the actor Michael K. Williams, who died of an overdose last September, were arrested.
- Wormhole, a protocol that bridges solana and other blockchains, was hacked for about $320 million. It's the second-largest hack in decentralized finance (DeFi) ever.
- Story of the week: an eight-year-old boy in Idaho wrote a book and slipped it into his local library. Now there's a 56-person waitlist to read it.
| | | This  metabolism booster is FINALLY back in stock. It's true: Sakara's Metabolism Super Powder is back and ready to help rev your metabolism while eliminating bloat. This stuff flies off shelves—probably because it's not just effective but also delish. So hop to it and get 20% off yours with code FEB22BREW. | | Last Seen from WBUR is back, and it's sharing 10 new mysteries about people, places, and things that have gone...missing. Listen now to season 2 wherever you get your podcasts. Two brain blasts: 1) A graphic showing countries connected to their primary trading partners and 2) a list of common misconceptions. And a weird video: This guy fits into really small holes. | | Brew Mini: One clue in today's puzzle reads "Annual Austin, TX, media festival, for short." Think you know it? Check here. Three headlines and a lie Three of these news headlines are real and one is faker than any groundhog not named Phil. Can you guess the odd one out? - School offers full tuition to 58 students after a scholarship award message error
- NASA announces plans to destroy the International Space Station
- 40-person brawl breaks out at Golden Corral over steak
- Elon Musk said he would donate $1 million to any charity of Mattel's choosing if they made an Elon Barbie
| | | We made up the Elon one. But it's plausible, right? | | | Written by Neal Freyman, Jamie Wilde, and Matty Merritt Was this email forwarded to you? Sign up here. WANT MORE BREW? Industry news, with a sense of humor → - Emerging Tech Brew: AI, crypto, space, autonomous vehicles, and more
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