—— Samsung Profit Plunges 70% YoY; 7 Predictions for VC in 2023; Tesla’s China-US Price Gap Hits 43%; ARK Dumps Nearly All Silvergate Shares; U.S. Job Market Normalizes; OpenAI Eyes $30B Valuation Share Sale; NYC Subway Crime Surges 30%
1. Samsung Profit Plunges 70% YoY
Recently, Samsung Electronics, the world’s largest memory chip, smartphone, and TV maker, reported that its Q4 operating profit fell by nearly 70%, highlighting the heavy toll of the global economic slowdown on semiconductor and electronics demand.
Samsung disclosed that operating profit dropped 69% to $3.4 billion over the past three months, marking the worst Q4 result since 2014. Revenue is also expected to decline by 9%.
Samsung attributed the profit squeeze primarily to its heavy investment in chip production to gain more market share in the future.
Analysts predict that memory sales may continue to decline this quarter, with inventory peaking in Q2 and then starting to recover.
Despite falling chip prices and demand, Samsung is investing to boost production and market share.
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2. 7 Predictions for VC in 2023
2021 was a record year for venture capital, but 2022’s “forced reset” brought startup valuations back to reality.
This year, Crunchbase compiled insights from industry experts to forecast trends in the startup world:
- The IPO market will remain slow; potential listings include grocery delivery firm Instacart and logistics unicorn Flexport.
- Many firms will acquire high-quality startups while valuations are low.
- Cybersecurity startup valuations will normalize.
- Despite skepticism toward crypto, fintech will remain popular.
- Investor interest in plant-based meat will fade.
- Biotech may be one of the few bright spots in VC.
- Fewer companies will blindly follow big-name peers; those with truly innovative IP will rise.
2022 marked a valuation reset for VC, with many bubbles burst and conditions more favorable for investors.
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3. Tesla’s China-US Price Gap Hits 43%
According to Tesla’s Chinese website, the entry-level Model Y’s price was cut by 10% to $37,875 (¥259,900), making it 43% cheaper than the U.S. all-wheel drive version.
Tesla also lowered the Model 3 price by 14% to ¥229,900, 30% cheaper than in the U.S.
In October, Tesla had already reduced China vehicle prices due to intensifying competition in the EV market.
Evercore ISI analyst Chris McNally said the new price cut will allow the Model 3 to better compete with BYD’s new Seal electric vehicle.
Today, Tesla’s stock fell another 3.5%, as investors grow increasingly concerned about its China performance and Elon Musk’s management.
Tesla’s Model Y in China is currently priced 43% lower than the U.S. version.
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4. ARK Dumps Nearly All Silvergate Shares
On Thursday, Cathie Wood’s ARK Fintech Innovation ETF sold 404,000 shares of crypto bank Silvergate.
The fund now holds fewer than 4,000 shares, worth just $43,000—less than 0.01% of the portfolio.
Yesterday, Silvergate told investors that customer crypto deposits fell from $11.9 billion to $3.8 billion in Q4, as the FTX scandal eroded trust and confidence.
As a result, Silvergate was forced to sell a large amount of crypto assets and related derivatives at a $718 million loss.
Two months ago, Cathie had added 200,000 Silvergate shares—now the strategy has done a complete 180.
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5. U.S. Job Market Normalizes
According to data released today by the U.S. Labor Department, nonfarm payrolls rose by 223,000 in December, while average hourly wage growth slowed—up 0.3% MoM and 4.6% YoY—giving the Fed more room to ease rate hikes.
Bloomberg’s economist forecast was for 203,000 jobs and a 0.4% monthly wage increase.
The unemployment rate dropped 0.1% to 3.5%, the lowest in 50 years, and labor force participation also improved.
Healthcare, social services, leisure & hospitality, and construction saw the largest job gains, while other sectors showed little change.
Boosted by the data, the S&P 500 and U.S. Treasuries rose today.
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6. OpenAI Eyes $30B Valuation Share Sale
Sources say OpenAI, developer of ChatGPT, is in talks with investors including Peter Thiel’s Founders Fund about a new round of funding. Investors may buy shares from existing shareholders or employees.
OpenAI is aiming for a $30 billion valuation—up from $20 billion in 2021.
Less than a month ago, OpenAI released the latest version of its GPT-3.5 software. The chatbot can converse via text and images, and attracted over 1 million users within days.
OpenAI was co-founded in 2015 by Elon Musk, Peter Thiel, and Sam Altman. Early investors include Sequoia Capital, Tiger Global, and Andreessen Horowitz.
In 2019, Microsoft invested $1 billion in OpenAI and jointly developed several computing technologies.
ChatGPT uses a generative language model for dialogue and is free to use after signing up.
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7. NYC Subway Crime Surges 30%
According to data released this week by the NYPD, subway crimes in New York City rose 30% in 2022, outpacing the city’s overall 22% crime increase.
Despite deploying over 1,000 additional officers to the transit system, the measures appear ineffective.
On Thursday, Mayor Eric Adams said adding more police was necessary, and adjustments would be made once the crime trend improves.
Currently, the NYPD spends an additional $20 million monthly to cover officer overtime. As of November, the department had paid $272 million in overtime—70% above the full-year budget.
Despite hundreds of millions spent to boost police presence, crime data shows little improvement.
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This content is sourced from Financial Times, Bloomberg, and The Real Deal, among other financial news outlets.