Flight cancellations number over 5,000 on Christmas weekend

Globally, airlines have canceled about 5,700 flights on Christmas Eve day, Christmas and the day after Christmas, according to FlightAware. That includes about 1,700 flights within, into or out of the United States.

Operational snags at airlines are coming as millions are still flying in spite of rising coronavirus cases. The TSA says it screened 2.19 million people at airports across the country on Thursday, the highest figure since the uptick in holiday travel started a week ago.

On Thursday, United Airlines (UAL) said it had to “cancel some flights” because of the Omicron variant of the coronavirus.

“The nationwide spike in Omicron cases this week has had a direct impact on our flight crews and the people who run our operation,” said a United memo obtained by CNN.

United canceled 201 flights on Friday, representing 10% of its total schedule, and 238 flights on Saturday, representing 12% of its schedule, according to flight tracking site FlightAware.

United said it is “notifying impacted customers in advance of them coming to the airport,” according to a company statement. “We’re sorry for the disruption and are working hard to rebook as many people as possible and get them on their way for the holidays.”

Later Thursday night, Delta Air Lines (DAL) also canceled flights. The airline canceled 173 Christmas Eve flights, according to FlightAware.

Delta said the cancellations are due to multiple issues including the Omicron variant.

“We apologize to our customers for the delay in their holiday travel plans,” Delta said in a statement. “Delta people are working hard to get them to where they need to be as quickly and as safely as possible on the next available flight.”

Additionally, JetBlue (JBLU) canceled 80 flights, or about 7% of its overall schedule, on the day before Christmas.

Alaska Airlines said in a statement that it canceled 17 flights because of Omicron Thursday and more cancellations are possible on Christmas Eve. The airline canceled 11 flights Friday.

Thousands of international flights canceled

China Eastern has canceled 474 flights, or 22% of its operation, according to FlightAware. Similarly, Air China canceled about 190 flights, or 15% of its schedule.

Air India, Shenzhen Airlines, Lion Air and Wings Air all canceled dozens of flights as well.

Andy Rose, Sharif Paget, Ramishah Maruf, Eric Levenson and Carma Hassan contributed to this report

India IPOs: 2021 was a dramatic year for tech. The hype won’t go away in 2022

By December, more than $15 billion had been raised in Mumbai through initial public offerings, a record amount, according to Dealogic. About $6 billion, or nearly 40%, went to tech companies — another record.

This year was historic for another big reason: It’s the first time any of India’s tech unicorns, or startups valued at more than $1 billion, have gone public.

Most of these high-profile startups are losing money, which was making retail investors leery, Piyush Nagda, head of investment products at Mumbai-based brokerage Prabhudas Lilladher, told CNN Business.

But that all changed after food delivery giant Zomato made its red hot debut this summer. Nagda said the IPO sent a clear signal that “perception is changing” among investors.

The party that started with Zomato’s $1.3 billion IPO — the company popped 65% on listing day to reach a market value of $13 billion — swept up a handful of other tech firms as well. E-commerce company Nykaa and online insurance marketplace Policybazaar each surged on their debuts.
The euphoria came to a screeching halt with Paytm’s disastrous IPO last month. The mammoth listing from the digital payments firm crashed 27% on its first day of trading, and hasn’t come close to reaching its offer price again.
Despite that fiasco, which analysts blamed on the lack of a clear pathway to profitability and an overly high valuation, other Indian tech firms likely won’t be stopped from going public in the coming years. They’ll just have to be careful about how they price themselves and whether they’re buying too much into the hype.

Why the party could keep going

There are a few reasons to remain hopeful about the Indian tech sector.

Many of the country’s digital startups saw a big jump in growth during the pandemic, both in terms of customers and funding.

Coronavirus-related lockdowns have encouraged people outside of major cities to spend money online, speeding up digitization of businesses and opening up more opportunities for technology entrepreneurs.

Tech firms in India have raised nearly $25 billion this year, the highest annual amount ever, according to data platform Tracxn. Some 34 companies have reached unicorn status.

India has also attracted more attention from top global investors this year due to the crackdown on tech firms in China, where authorities have imposed sweeping curbs on private enterprise that have eaten into share prices and triggered concerns about future growth.

As a result of those regulatory actions, “growth investors have shifted funds to India” said Tom Masi and Nuno Fernandes, co-portfolio managers of the emerging wealth strategy at GW&K Investment Management. They told CNN Business that the performances of the two countries have diverged this year, “with India up about 20% and China down 20%.”

Nagda also said that interest in Indian tech from global investors has made the sector more attractive to India’s tech-savvy millennials. He estimates that India added about 20 million retail investors since April 2020, and between 30% to 40% of them are under the age of 40.

They’ve been piling into the stock market since the pandemic started, and are eager to invest in the country’s internet giants, he added.

And, they should be getting plenty of opportunities next year, with some of India’s biggest startups gearing up for IPOs, including Walmart-owned Flipkart and hotel chain OYO.

Young investors don’t look at companies in a “traditional” manner “where profitability and those kind of ratios were heavily looked at,” Nagda said, adding that there is a “revolutionary change” underway in stock trading in India.

A wake-up call

Even those investors may have their limit, though.

Paytm raised $2.5 billion during its IPO, with almost half of that coming from foreign investors.

The company was valued at $20 billion when it launched its public offering — even though it lost hundreds of millions of dollars last year and seemed far from ready to turn a profit.

“Paytm was overpriced,” said Masi and Fernandes. “It required investors to make growth assumptions well into the future for a business model that has not been firmly established.”

Some analysts describe Paytm’s flop as a much-needed wake-up call for companies that need to rethink their valuations.

“Some rationality will prevail,” Nagda said. To see Zomato-like “success stories,” you need to “price the stock rightly,” he added.

After Paytm’s historically terrible debut, some companies in fintech sector are rethinking their IPOs. Paytm’s smaller rival Mobikwik said it would defer its IPO, originally planned for November, by a few months.

Paytm is still struggling to convince investors after disastrous IPO

“The company is witnessing strong business growth, has a clear path to profitability and will list at the right time,” it told CNN Business.

Some tech entrepreneurs have urged caution while chasing big money in public markets.

Nithin Kamath, founder of India’s largest retail brokerage Zerodha, tweeted recently that his firm won’t be filing for an IPO, even though he “can potentially get ridiculous valuations.”

“We are in a world where companies are getting priced to perfection based on all the future growth potential. For a stock to do well, you have to outperform,” he wrote. “As CEO, I dread to think how you can outperform the already really high expectations that growth companies have today.”

Along with managing overwhelming expectations, startups that go public will also have to adjust to the amount of company information they’d be expected to regularly reveal to their new shareholders.

Privately held tech giants are less beholden to such transparency. And many investors think those requirements would be a welcome change.

There will be “visibility into this for the very, very first time,” said Karthik Reddy, co-founder of venture capital firm Blume Ventures. “Even I don’t know what was going on in all these companies, even though I’m an industry person.”

Boeing and Airbus want Biden administration to delay rollout of 5G cell service, cite safety concerns

Boeing (BA) CEO David Calhoun and Airbus Americas CEO Jeffery Knittel sent a letter to Transportation Secretary Pete Buttigieg to say the January 5 rollout could cause interference that could “adversely affect the ability of aircraft to safely operate.”

At issue are instruments known as radar altimeters that pilots of commercial airliners need to make safe landings in low visibility conditions. An industry analysis says interference could affect hundreds of thousands of flights each year, delaying flights or causing them to divert.

The CEOs say they have developed a new proposal to limit the power of 5G transmissions near airports, and call on the Biden administration to work with the Federal Communications Commission to adopt such a plan.

The impacts of allowing 5G to deploy, “are massive, and come at a time when our industry is still struggling from the COVID-19 pandemic,” the CEOs said.

he Federal Aviation Administration announced a new rule earlier this month that forbids pilots from using auto-landing and other certain flight systems at low altitudes where 5G wireless signals could interfere with onboard instruments that measure a plane’s distance to the ground.

The rule, which affects more than 6,800 US airplanes and dozens of aircraft manufacturers, could lead to disruptions in some flight routes involving low-visibility conditions, There is a potential risk, the FAA said, that the 5G signals could lead to faulty readings that may make flying unsafe in these conditions.

Characterizing the orders as urgent, the FAA bypassed the typical public feedback process in issuing the restrictions.

— CNN’s Brian Fung contributed to this report

Stocks week ahead: The year Reddit and meme stocks changed Wall Street forever

Around mid-January, shares of GameStop (GME) — a brick-and-mortar retailer that most analysts expected to go the way of Blockbuster — began surging, fueled by a pile-on of day traders from the WallStreetBets forum on Reddit. They were doubling, tripling, their positions by the day, chanting “diamond hands,” and “to the moon,” rally cries to hold onto their shares rather than cash out. The term “meme stock” sauntered into the mainstream. 

Better still, these amateur traders, who winkingly referred to themselves as “Apes,” were sticking it to the fat cats on Wall Street who’d heavily shorted GameStop. The more people tried to dismiss the Reddit crowd — Citron Research called them “the suckers at this poker game” — the more they drove up the stock, squeezing the short sellers.

In the end, the GameStop rally sent the stock up 1,600% before coming back down to Earth. Citron, meanwhile, shut down its short-selling business after the episode. Melvin Capital, one of Wall Street’s elite hedge funds, was so financially gutted it had to be bailed out by two other firms. The Apes rejoiced. Who’s the sucker now? 

It looked, in the moment, like David had taken down Goliath. But the giant was merely caught off guard.  

The GameStop saga, brief though it was, marked a turning point for Wall Street. Did the Apes overthrow the establishment? No, far from it. But the spectacle of the uprising was every bit as important as the result. Once GameStop caught the public’s imagination, Wall Street could no longer afford to dismiss social media or the investors who congregate on it. 

“Most people saw it as this revolution,” says Spencer Jakab, a Wall Street Journal columnist and author of a forthcoming book about the GameStop rally. “And a lot of young people are still convinced that they’re fighting some kind of virtuous fight against evil hedge funds… but, basically, the story is the same: If you think you’ve figured something out to beat Wall Street, you probably haven’t.” 

The Reddit army’s moment fizzled in early February when GameStop cratered to around $45. Those who joined late, buying the stock at its peak of around $480, were left with huge losses. These days, GME trades around $145 — up nearly 700% for the year, but far from January’s highs.  

Jaime Rogozinski, the founder of WallStreetBets, acknowledges that what happened with GameStop wasn’t a revolution per se, but that doesn’t mean the community or the ethos that guided it — sniffing out market inefficiencies and exploiting them for profit — is dead.  

“They’re little accounts, but they’ve now figured out how to push a stock price, even with their insignificant size,” Rogozinski told CNN Business.  “They’re not going to stop looking for these things.” 

The original WallStreetBets page has more than doubled in size since the GME rally, going from about 5 million at the end of January to over 11 million now — an explosion of popularity that’s put off some early adherents who broke off to form new, more specialized investing groups on Reddit and elsewhere.  

So who won, David or Goliath? Maybe both.  

The force of the January squeeze was powerful enough to make even the stodgiest of Wall Street elite sit up and take notice. US regulators are paying close attention, too

“You’ll be hard-pressed to find a company that has over 100% short float now, right?” Rogozinski says. In other words, no Wall Street firm with any sense wants to end up like Melvin, a titan that was squeezed so hard by the GameStop surge it lost 53% of its fund in under a month. If you massively short a stock and run up your exposure, you’re putting a target on your back.  

WallStreetBets, with all its crude jargon and machismo, became a check on institutional investors who had perhaps gotten too cozy. Not wanting to be wrong twice, firms have hired social media managers and subscribed to services that monitor social chatter. JPMorgan, for one, is currently testing a new tool aimed at protecting clients from losses tied to meme stocks, Bloomberg reported earlier this month.   

“If you don’t have a clear view of what retail is up to, it feels like you’re driving partially blind,” Chris Berthe, JPMorgan’s global co-head of cash equities trading, told Bloomberg.  

For better or worse, Jakab says, all of this has made Wall Street even better at making money. 

“I think what’s changed is that Wall Street is totally aware of what’s going on,” says Jakab. “And they are not going to get caught out in the same way again. They monitor social media, they’re going to be more judicious about getting exposed.”  

For all the so-called Apes accomplished, Jakab argues, in the end it was the little guy that got hosed in the GameStop saga. His book, “The Revolution That Wasn’t: GameStop, Reddit, and the Fleecing of Small Investors,” Jakab makes the case that despite all the talk of sticking it to the Man, the rally only tipped the odds further in Wall Street’s favor.  

“Wall Street likes this,” he told CNN Business. “Wall Street likes millions of young people who hate Wall Street putting their money on Wall Street — they don’t care if they’re hated.” 

Perhaps the more significant legacy of WallStreetBets and the GME saga is cultural. Spend half a minute on the site and you quickly understand this isn’t a convention of Boomers in suits but rather a bunch of young Millennials and Gen Zers (still mostly male) talking about complicated options trades via memes and emoji.  

“The best analogy that I can come up with is, you’ve had these seasoned professional poker players playing this game for decades, and now they’ve all had to scoot over to make room for this new player that doesn’t use the same rules,” Rogozinski says. “You have somewhat of a reckless individual that has a different concept of risk and a different objective. And so these players now have to adjust their strategy.”  

Up next

Monday: Nike and Micron earnings

Tuesday: General Mills, Rite Aid and BlackBerry earnings

Wednesday: US consumer confidence and existing home sales; CarMax earnings

Thursday: US personal income data and PCE Price Index

Friday: US markets closed and half day of trading in London