📉 Bitcoin in free fall
Indian states face vaccine costs, Musk's tweet causes Bitcoin to drop, AT&T-Discovery merger, and some more updates
Hey 👋
Welcome to In The Loop➰
A newsletter that brings you the latest news from finance, business, and tech straight to your inbox every morning. Sign up below 👇
There’s so much to cover today so let’s get started.
First up,
Market Snapshot 📈
Sensex: 49,580.73 (+1.74% ) ↑
Nifty 50: 14,923.15 (+1.67% ) ↑
Dow Jones: 34,382.13 (+1.06% ) ↑
Nasdaq 100: 13,393.12 (+2.17% ) ↑
Bitcoin: $45,459.32
Top Stories 📰
1. Vaccine cost strains budget of Indian states 💉
The pandemic only seems to get worse for India.
On May 1, the Centre waived all responsibility after Prime Minister Narendra Modi called on states to vaccinate their adults as the second COVID-19 wave continued to ravage the Indian economy. Now, states are scurrying to find more than $5 billion in their already depreciating budgets to vaccinate nearly 590 million Indians in the 18-to-44 age group that would cost them around Rs 600 per person.
To address this rising deficit, Rajasthan intends to sell or lease out unused properties in the region. Meanwhile, the southern state of Telangana plans to sell land parcels to raise around Rs. 145 billion. However, there's no guarantee that these deals will happen. Punjab is also planning to reduce its capital spending and increase healthcare expenditure.
The lockdowns have significantly affected states' ability to drive their budgets. According to RBI, the average gross deficit for states that presented their budgets stood at 2.4% of output before the lockdown, while it was 4.6% after the lockdown.
The crisis also comes as states face higher yields on market borrowings amid the growing fiscal deficit, expected to breach the government's set target of 6.8% and reach around 8.3% of GDP in 2022.
Why it matters? On top of these expenses, Indian states will have to create additional funds within their budgets for extending vaccinations to those under 18 years. As per Emkay Global Financial Services, these costs could rise to $7 billion, or 0.25% of India's GDP.
2. Bitcoin goes down after... 💰
Elon Musk tweets.
The Dogefather has, yet again, sent Bitcoin prices into free fall.
In a Twitter exchange on Sunday, Tesla CEO Elon Musk implied that he may sell or has sold the company's cryptocurrency holdings. The online commentary sent Bitcoin's prices to fall to $45,270, a $4,000 drop from its Friday figures.
Hours later, Musk put an end to such speculation and clarified that the electric vehicle manufacturer had not sold any Bitcoin. Despite this, Twitter was quite unhappy with his changing stance on the cryptocurrency, with some users telling him to act more responsibly.
Bitcoin prices have been falling ever since Elon Musk tweeted on May 13 that Tesla won't accept Bitcoin as car payments, citing climate change concerns. A few days before that, when he hosted Saturday Night Live, he joked about Dogecoin and called it a "hustle" that sent its prices to fall by 35%, erasing the cryptocurrency's previous gains.
Why it matters? Besides Musk's antics, several other factors have contributed to the decline in cryptocurrency prices— mainly its use for illicit purposes. Colonial Pipeline paid a $5 million ransom to hackers using untraceable digital currencies to get their systems back. Moreover, Binance is also under investigation by the Justice Department and the IRS over possible money-laundering and tax offenses.
3. Today's big deals 🎉
AT&T, Discovery to create new entertainment giant 📺
AT&T is reportedly in talks with Discovery to merge its media holdings with Discovery’s reality-TV empire to create a new entertainment giant that could compete with big players like Netflix and Disney. The decision is a surprising reversal for AT&T, which acquired Time Warner $85 billion less than three years ago. The deal is structured to be tax-free and values AT&T's business at over $50 billion (including debt). The decision also highlights the difficulty faced by telecom companies like Verizon and AT&T that have had a hard time finding a payoff from their media operations. While the deal is expected to be announced as early as this week, sources said that its details could change or the entire deal could fall through.Pine Labs raises $285 million in a fresh round 💲
Noida-based merchant platform Pine Labs has raised over $285 million in new funding round as it hopes to expand operation for merchants and push for its buy-now-pay-later product across India and South Asia. The fundraise valued the company at $3 billion, up from last year's $1 billion. Pine Lab's existing investors, including Temasek, Lone Pine Capital, and Sunley House Capital, along with new investors Baron Capital Group, Marshall Wace, Moore Strategic Ventures, Ward Ferry Management, and Duro Capital, financed the latest round. The company, which serves over 140,000 merchants, offers payments terminals, invoicing tools and working capital. Last month, Pine Labs acquired Fave for $45 billion to double down on the QR-code-based payment system and loyalty solutions.
Top Reads 📑
China is breaking COVID-19 vaccinating records as the country vaccinates 14 million people a day.
Microsoft investigated Bill Gates in 2019 after it was informed about his prior romantic relationship with a female Microsoft employee in 2000: Report
Clubhouse for Android to be available worldwide in a week.
UN chief says the Israel-Gaza conflict "utterly appalling," calls for an immediate ceasefire.
Hero MotorCorp plans to enter the EV market next year.
Tweet Of The Day 🌟
US states are coming up with new and fun ways to encourage people to get vaccinated for COVID-19.
Well, that's all from us. Until next time 👋
If you liked reading this newsletter, give us a ️❤️ and share it on your socials!