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Message: <blockquote data-quote="ELA" data-source="post: 12738" data-attributes="member: 1562">4. Uber’s Shares Tumble ([USER=1550]@Sairah[/USER])The Story:Last Thursday, Uber’s second-quarter earnings showed a loss of $5.24 billion in the last three months, following its initial public offering in May. Uber’s second-quarter numbers included a $3.9 billion charge of stock-based compensation related to its IPO, an action which has been reported to be the root cause of the latest quarterly loss.Although Uber’s revenues rose 14% to $3.17 billion in the second quarter, this was still below investors’ expectations of $3.30 billion. Uber lost more money than it generated in sales and continues to lose more, as the company’s share price, which had climbed to 8% on Thursday, fell more than 10% in after-hours trading.Impact on Businesses and Law Firms:The growth of the company has worried investors, as Uber’s revenue has slowed down in each of the past six quarters. Also, it is reported the company’s shares have only closed above their initial public offering price of $45 twice since its share sale, costing early investors around $618 million. Despite this, Uber’s CEO, Dara Khosrowshahi is determined to reassure investors that the company has the determination to ‘grow scale and deliver efficiencies’, while ride-hailing might not be succeeding because of tougher competition. For instance, Japan’s Softbank (a current Uber investor) is currently raising a second Vision Fund and is expected to raise substantial capital that could potentially enter the market to compete against Uber. Another drawback for the hire-vehicle industry is the consideration of even stricter regulations in New York (the US’s largest ride-hailing market), after extending control on new vehicle licenses this month.However, Uber has the potential to deliver long-term profitability through its other primary business: Uber Eats. Despite competitors such as Just Eat, which announced its mega-merger with Takeaway.com and Deliveroo and recently added Amazon to its investor base, Uber Eats’s revenue expanded 72% from $346 million to $595 million and doubled its customer base, compared to a year ago.To maximise long-term growth, corporate and finance lawyers will be needed to instruct Uber on its follow-on public financings. Also, if Uber considers re-structuring their company strategy in the future, the existing investor agreement will need to be re-negotiated with the assistance of corporate lawyers to avoid any conflict with investors.5. China's Currency Devaluation ([USER=1643]@Moni[/USER])The StoryChina’s economy is currently battling an <a href="https://edition.cnn.com/2019/07/19/economy/china-economy-trump-trade-war/index.html" target="_blank">economic slowdown</a>, <a href="https://www.nytimes.com/2019/08/12/world/asia/hong-kong-protests-communist-party.html" target="_blank">political unrest</a> in Hong Kong, and of course the effects of a <a href="https://www.forbes.com/sites/pedrodacosta/2019/08/13/u-s-china-trade-war-snowballs-toward-worst-case-scenario/" target="_blank">trade war</a> with the United States. In what many perceive as a response to US tariffs on Chinese goods, the People’s Bank of China allowed the Chinese Yuan to weakened past the critical level of 7 yuan to 1 US Dollar for the first time since the global financial crisis in 2008. Since then the PBOC has kept the Yuan at this weakened level for <a href="https://www.cnbc.com/2019/08/12/peoples-bank-of-china-sets-yuan-midpoint-at-7point0211.html" target="_blank">three consecutive sessions</a>. A weaker Chinese Yuan poses a threat to US exporters as it makes Chinese good relatively cheaper and the Trump administration has consistently accused the Chinese government of manipulating its currency to give the country a trade advantage.The Chinese government has maintained that the weakening of the Yuan is a response to market dynamics, however the U.S Treasury department designated China as a <a href="https://www.cnbc.com/2019/08/05/us-treasury-designates-china-as-a-currency-manipulator.html" target="_blank">currency manipulator</a> for then first time since the Clinton administration and said China’s actions were another step in a currency war. Impact on Businesses and Law FirmsInvestors worry that China’s actions may exacerbate the current trade war which is already having significant effects on the global economy and stock markets from the <a href="https://www.washingtonpost.com/world/asia_pacific/asian-stock-tumble-after-china-lets-yuan-sink/2019/08/05/9a12bdc8-b739-11e9-8e83-4e6687e99814_story.html" target="_blank">US</a> to <a href="https://www.theguardian.com/australia-news/2019/aug/06/us-china-trade-war-hits-australian-stock-market" target="_blank">Australia</a> saw significant drops following the weakening of the Yuan. There is also some concern that the devaluation of the Yuan could do more harm than good in the Chinese economy, by making it harder for China to <a href="https://www.cnbc.com/2019/08/09/chinese-yuan-peoples-bank-of-china-sets-midpoint-at-7point0136-per-dollar.html" target="_blank">import key  commodities</a> and  <a href="https://www.theguardian.com/business/2019/aug/12/could-devaluation-of-china-yuan-trigger-the-next-financial-crisis" target="_blank">triggering as potential debt crisis</a>. This could happen if the weakening of the Yuan makes it more difficult for Chinese companies to pay back debts denominated in foreign companies. Given China’s increasingly  important role in the global economy, an economic slowdown, Chinese recession or further escalation of the US-China trade war would have significant ramifications for business globally and could result in less business for law firms.</blockquote>

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