— SpaceX Rocket Explodes After Launch; Blackstone Profit Drops 36%; Goldman Invests $1.15B in Affordable Housing; ChangXin Memory Plans Domestic IPO; Snap Surpasses 3M Paid Users; AMEX Card Spending Rises; Nestlé Pressured on Unhealthy Products
1. SpaceX Rocket Explodes After Launch
Today, SpaceX launched its nearly 400-foot-tall super heavy rocket on its maiden flight. The Starship, equipped with 33 Raptor engines, successfully lifted off and reached an altitude of 40,000 meters before descending and exploding.
The company stated that although the rocket failed to complete its mission and reach space, the launch still provided critical data.
Just days ago, SpaceX CEO Elon Musk had admitted that the rocket was unlikely to reach orbit during this test flight.
Although Starship failed to reach orbit on its first flight, it still provided valuable insights.
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2. Blackstone Profit Drops 36%
Blackstone Group in New York reported today that its distributable profit fell 36% to $1.25 billion in the first quarter, slightly above analyst expectations. Assets under management (AUM) rose 8% to $991.3 billion, approaching the $1 trillion mark.
President of Blackstone commented in an interview that with current market uncertainty, a slowdown in deal activity is not surprising.
In Q1, Blackstone raised $29.5 billion in capital, down from $39.9 billion a year earlier. The real estate division attracted the most capital.
As the world’s largest commercial property owner, Blackstone marked down its U.S. office building assets last quarter. Office assets now account for only 2% of its real estate portfolio, compared to 61% in 2007.
Both asset sales and deal-making slowed in the first quarter.
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3. Goldman Invests $1.15B in Affordable Housing
Goldman Sachs’ Urban Investment Group (UIG), in partnership with Michaels Organization and the Community Development Trust, has acquired a portfolio of 90 affordable housing properties valued at $1.15 billion.
The more than 10,000 units in the portfolio have an average monthly rent of under $1,000.
UIG co-head Dan Alger stated that with housing affordability at record lows in the U.S., the firm aims to deliver positive social impact despite market headwinds.
The seller was Harmony Housing, and the portfolio includes multifamily and senior living properties across eight states, housing more than 30,000 residents.
The 90 properties span cities like Chicago, Dallas, Milwaukee, Tampa, and Indianapolis.
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4. ChangXin Memory Plans Domestic IPO
Sources say Chinese chipmaker ChangXin Memory Technologies (CXMT) is planning an IPO in Shanghai, with a potential valuation exceeding $14.5 billion.
CXMT is currently selecting underwriters for the IPO. Final pricing is yet to be determined.
CXMT is one of China’s leading DRAM memory chip producers, a market dominated by Samsung Electronics, SK Hynix, and Micron Technology.
Recent U.S. policies under President Biden restricting China’s access to American tech may negatively impact market sentiment toward CXMT.
In 2018, another Chinese DRAM producer, Fujian Jinhua Integrated Circuit, was added to the U.S. Entity List.
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5. Snap Surpasses 3M Paid Users
Today, social media platform Snap announced at its annual Partner Summit that its Snapchat+ subscription service has attracted over 3 million paid users.
The service offers early access to AI chatbot features, app customization options, and other perks for a monthly fee of $3.99.
Snapchat+ launched last year, but user growth accelerated in February when Snap integrated the My AI chatbot powered by OpenAI’s GPT technology.
Snap announced today that the My AI feature will soon be available to all users, free of charge.
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6. AMEX Card Spending Rises
American Express reported that it allocated $1.1 billion in loan loss provisions for Q1, exceeding analyst expectations of $890 million.
CEO Steve Squeri stated that despite economic slowdown, high inflation, and interest rates, cardholder spending remains strong.
In Q1, AMEX card spending rose 14% to $398.9 billion, driven by Platinum and other premium card usage.
The company earned $7.95 billion in merchant fees and $1.7 billion in annual card fees. Total revenue rose 22% to $14.3 billion.
However, Q1 net profit declined 13% to $1.82 billion due to a 22% surge in operating expenses to $11.1 billion.
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7. Nestlé Pressured on Unhealthy Products
Investors holding $3 billion in Nestlé shares have pressured the food giant, warning that continued reliance on unhealthy processed foods poses systemic risks.
They are calling for the company to raise the proportion of revenue from healthier food products and set clear target ratios.
Governments worldwide are increasing taxes on sugary foods and tightening restrictions on advertising such products. Nestlé’s brands such as KitKat, Milkybar, and Smarties have expanded nutritional disclosures.
CEO Mark Schneider said Nestlé is working to reduce fat, sugar, and salt content, but noted that inherently indulgent products like chocolate are difficult to replace with fully healthy alternatives.
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This content is sourced from Financial Times, Bloomberg, and The Real Deal, among other financial news outlets.