—— Tesla Considers Traditional Advertising; UBS Sees $35B Gain from Credit Suisse Deal; Deutsche Bank to Cut 40% of Office Space; U.S. Housing Starts Increase; Western Alliance Deposits Grow by $2B; Sony Announces $1.5B Buyback; China’s Home Price Growth Slows
1. Tesla Considers Traditional Advertising
At Tesla’s annual shareholder meeting on Tuesday, Elon Musk said in response to an investor question that the company may start considering traditional advertising.
Tesla has long relied on word of mouth and avoided advertising through TV, radio, or print.
However, Musk told CNBC that advertising through traditional channels could indeed help the company expand its user base.
Musk has traditionally used Twitter for promotional efforts.
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2. UBS Sees $35B Gain from Credit Suisse Deal
According to a regulatory filing released by UBS, the bank expects a $35 billion gain from its acquisition of Credit Suisse, mainly due to negative goodwill recorded in post-merger accounting.
However, legal and other liabilities may result in $4 billion in costs over the next year.
Analysts estimate that Credit Suisse’s Swiss Universal Bank alone is worth several times the acquisition price paid by UBS.
UBS employees are currently conducting due diligence on Credit Suisse’s assets, with completion expected in the coming weeks.
Investors caution that the gain from negative goodwill is merely accounting-based and does not reflect actual acquisition value.
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3. Deutsche Bank to Cut 40% of Office Space
Germany’s largest bank, Deutsche Bank, told investors today that it plans to cut office space by 40% in Frankfurt and Eschborn by the end of 2024, due to the increasing number of remote workers.
Three years ago, the bank introduced a hybrid work option allowing up to three days at home per week. Nearly two-thirds of employees are now enrolled.
Last year, the bank held 3,500 lease agreements, and real estate costs totaled €1.4 billion. The company plans to consolidate staff into fewer, higher-quality buildings.
With remote work on the rise, companies no longer need as much office space—putting enormous pressure on commercial real estate.
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4. U.S. Housing Starts Increase
According to data released by the government today, U.S. housing starts rose 2.2% in April to an annualized pace of 1.4 million units.
Single-family housing starts also increased by 1.6% to their highest level this year, entirely driven by growth in the Western U.S. Multifamily and apartment projects also rose.
Building permit applications fell 1.5% to an annualized 1.42 million units.
An economist at High Frequency Economics noted that while mortgage rates remain high and affordability is limited, tight inventory continues to support construction activity and home prices.
Both single-family and multifamily housing starts increased, signaling improved supply prospects ahead.
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5. Western Alliance Deposits Grow by $2B
Regional U.S. bank Western Alliance said its total deposits grew by over $2 billion compared to the end of last quarter, easing concerns over the health of regional banks.
Pre-market, Western Alliance shares jumped 9.7%, lifting other regional bank stocks as well.
Western Alliance was among the first regional banks impacted by recent turmoil, with investors fearing unrealized losses in bond holdings and potential bank runs.
Bloomberg analysts said Western Alliance’s financials are solid, with $22.6 billion in liquidity assets and only $10 billion in uninsured deposits.
Analysts believe that Western Alliance and similar banks are likely to weather the current crisis successfully.
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6. Sony Announces $1.5B Buyback
Japanese electronics and entertainment firm Sony Group plans to repurchase up to 2.03% of its shares, worth $1.5 billion, within the next 12 months. However, it warned that weakening global consumer spending may hurt demand for products like the PlayStation.
This week, Sony’s stock climbed to a 52-week high, benefiting from a broader rally in Japan’s stock market.
While Japanese firms are repurchasing shares at record levels, U.S. companies have significantly cut back.
The buyback may support Sony’s stock price, but it cannot offset declines in product demand.
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7. China’s Home Price Growth Slows
According to data released today by China’s National Bureau of Statistics, home prices in more than 70 cities rose 0.32% in April from the previous month—slower than the 0.44% increase in March.
In recent months, Chinese residential property prices have seen a rare but brief rebound after an 18-month decline.
A research director at China Index Holdings said that short-term property policy will likely remain loose, as maintaining buyer confidence is essential.
China’s real estate sector is crucial to economic growth, accounting for around 20% of GDP. It also influences global trade in key materials like iron and copper.
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This content is sourced from Financial Times, Bloomberg, and The Real Deal, among other financial news outlets.