Yelp lays off 1000, furloughs 1100

Liquidity injections from central banks, federal governments, risks of the virus are starting to be known, stairs up & elevator down tends to lead to an over reaction, price discovery, oil cuts possibly happening today with OPEC, the FED announced +2T in purchasing of junk debt this morning, and there are going to be companies coming out of this much stronger than before.

Maybe. Personally, I think the median investor, especially the median short term investor, tends to be more optimistic than the rational market hypothesis would argue. Information availability isn't symmetric, and the news sources favored by these people tend to paint rosier pictures of the recovery than seem likely.

I mean, one very straightforward interpretation of the headline of this linked article is that Yelp will be seeing a 30-40% shortfall in revenue for the medium term future (i.e. long enough to make the firing and hiring process worthwhile). At its worst, the market was guessing at a 38% drop in valuation, and it's now recovered significantly from that.

My guess, and no I'm not buying puts to test it, is that we're going to see another series of shocks to the market when the revenue numbers start being reported and the big employers start running out of money and shutting things down.

Right now the immediate job losses are all in the service sector and small employers, and those jobs are basically invisible to your typical trader bro.

I am speculating:

1) pricing in the return of US manufacturing. In a pandemic, it's every country for themselves. We've outsourced items critical for national sovereignty and the ability to respond to crises. I think left and right agrees now, that's a risk which needs to be mitigated.

2) govt has unprecedented support, in terms of small business loans and benefits

3) bonds and stocks are usually inversely correlated, they are not because the fed is buying up a significant portion of the debt, at low rates. Meaning your not getting much return if you hold bonds.

4) Capital flight from foreign markets. If you can't trust China, and emerging markets are going to get hit worse, then the US is where you want your money.

5) Less uncertainty.

6) More speculation that this virus is not as bad as we think. We're well below the expected deaths on the models, which means the models are wrong, by a factor of multiples.

>> I think my best speculation is that the economy's fall factored in uncertainty about how bad this really is.

I don't think anyone really understands how bad things are, and the only reason fears have abated is because everyone is operating under the assumption that the country will "open back up" later this month or next month, and things will largely go back to normal in the summer. Once that sentiment erodes and reality sinks in, we can expect the stock market to sink with it.

> Today we will let 1,000 of our colleagues go and furlough approximately 1,100 more, while reducing hours for others. Your department leaders will be in touch this morning to discuss how this affects you individually, and letters with more details and FAQs will follow this afternoon.

Honest question - is it normal to announce layoffs publicly before telling the affected employees? I guess I can understand it from a PR perspective, but it must be awful to read that and sit around waiting to find out if you're affected.