U.S. announces new Russia sanctions in response to Ukraine annexation

President Joe Biden speaks during the First State Democratic Dinner in Dover, Delaware.

Saul Loeb | AFP | Getty Images

WASHINGTON – The Biden administration announced new economic sanctions on hundreds of Russian officials and entities Friday in response to the Kremlin’s illegal annexation of four regions of Ukraine.

“Make no mistake: these actions have no legitimacy,” President Joe Biden said in a statement slamming Russian President Vladimir Putin’s goal of recreating a Soviet-style Russian empire.

“I urge all members of the international community to reject Russia’s illegal attempts at annexation and to stand with the people of Ukraine for as long as it takes,” he said, vowing that America and its allies would hold the Kremlin accountable.

The new sanctions target several front companies outside of Russia that were created this year to help major Russian military suppliers evade the sanctions they had already faced.

U.S. pushes back against Putin annexation claim

The new designations also expand sanctions on top Kremlin officials to include their wives and adult children. After seven months of war and economic sanctions, these revisions offer a window into what U.S. officials believe is working.

The Treasury Department named 14 international suppliers that assisted Russia’s military supply chains. It also imposed designations on 109 members of Russia’s State Duma and 169 members of the Federation Council of the Federal Assembly of the Russian Federation.  

Also new on Friday is the addition of Elvira Sakhipzadovna Nabiullina, Russia’s central bank governor and a former advisor to Putin. Since 2013, she has overseen its efforts to protect the Kremlin from Western sanctions after Russia illegally seized Crimea in 2014, according to the Treasury Department.

The newly sanctioned family members are the relatives of members of Russia’s National Security Council. They include Russian Prime Minister Mikhail Mishustin’s wife and two adult children, along with Defense Minister Sergei Shoigu’s wife and adult children.

Meanwhile, the State Department will impose visa restrictions on Ochur-Suge Mongush, for a gross violation of human rights perpetrated against a Ukrainian prisoner of war and 910 individuals. The department will also impose visa restrictions on members of the Russian military, Belarusian military officials and proxies operating on behalf of the Kremlin.

What’s more, the Department of Commerce is adding 57 entities to its export controls list. It will reiterate that countries that seek to provide material support to Russia and Belarus’ defense sector are subject to penalties.

In announcing the annexations Friday in Moscow, Putin declared that “There are four new regions of Russia,” referring to the Ukrainian regions of Donetsk, Luhansk, Zaporizhzhia and Kherson.

Putin cited sham referendum votes held in Russian-occupied areas, saying voters approved becoming parts of Russia. Those votes are widely viewed by Western officials as rigged and illegitimate.

“The results are known, well known,” Putin said.

Russian President Vladimir Putin gives a speech during a ceremony formally annexing four regions of Ukraine Russian troops occupy, at the Kremlin in Moscow on September 30, 2022.

Gavriil Grigorov | AFP | Getty Images

Earlier this week, the White House said the U.S. would never acknowledge the results of the “sham referendum” and would continue providing Ukraine with military and humanitarian support.

On Wednesday, the Biden administration announced $1.1 billion in additional security assistance for Ukraine. The upcoming aid package, the 22nd such installment, brings U.S. commitment to more than $16.2 billion since Russia’s invasion in late February.

On the heels of Putin’s address, Ukrainian President Volodymyr Zelenskyy said he will submit an “accelerated” application for his country to join the NATO military alliance.

President of Ukraine Volodymyr Zelenskyy visits the Kharkiv region for the first time since Russia started the attacks against his country on February 24, in Kharkiv region, Ukraine on May 29, 2022.(Photo by Ukrainian Presidency/Handout/Anadolu Agency via Getty Images)

Ukrainian Presidency | Anadolu Agency | Getty Images

“We have already made our way to NATO, we have already proven compatibility with alliance standards,” Zelenskyy said on the Telegram messaging app, referring to the technical elements of integrating Ukraine’s military into the 30-member defensive alliance. “We are taking our decisive step by signing Ukraine’s application for accelerated accession to NATO,” he added.

In dramatic remarks before the 77th U.N. General Assembly last week, Zelenskyy called for more arms as his nation carries out an era-defining fight for democratic principles and global order. He specifically asked for long-range weapons, heavy artillery and air defense systems.

Zelenskyy, who has not left his war-weary nation since it was invaded by Russia in February, received nearly a minute of applause and a standing ovation. His speech was delivered shortly after Putin announced plans to conscript hundreds of thousands of Russian men for the war.

Putin’s order for approximately 300,000 Russians to join the fight is the first time since World War II that Moscow has drafted civilians into the military for a war.

The Kremlin’s decision to impose a partial draft was triggered in part by a series of stunning Ukrainian advances in recent weeks.

Equipped with an arsenal of Western weapons, Ukrainian forces have retaken vast swaths of territory that had been occupied by Russian forces since the early days of the war. Their battlefield successes have dented the reputation of the Kremlin’s mighty war machine.

But as Ukraine fights to retake land one village at a time, the cost to civilians has been enormous.

So far, the U.N. estimates that Russia’s invasion has claimed nearly 6,000 civilian lives and led to more than 8,600 injuries. The Office of the U.N. High Commissioner for Human Rights adds that the death toll in Ukraine is likely higher.

Putin pushes annexation while wielding nuclear threat

Disney reaches deal with Third Point, will add former Meta exec to its board

The Disney+ website on a laptop computer in the Brooklyn borough of New York, US, on Monday, July 18, 2022.

Gabby Jones | Bloomberg | Getty Images

Disney has reached a deal with activist investor Dan Loeb’s Third Point, which includes adding former Meta executive Carolyn Everson to its board of directors, the companies said on Friday.

The deal comes weeks after Third Point took a new stake in Disney representing about 0.4% of the company and urged the media company to spin out its sports property, ESPN. Third Point’s 6.35 million shares of Disney are worth about $600 million as of Friday’s closing.

On Friday, Disney said in a public filing that, with Third Point’s support, it would add Everson to its board ahead of its board meeting in November.

“We are pleased with our productive and ongoing dialogue with Bob and Disney’s management team,” Loeb said in the release on Friday.

As part of the deal, Third Point agreed to customary standstill and other provisions, including that it wouldn’t take a stake in Disney that’s larger than 2% and that it wouldn’t solicit proxies or present proposals. Third Point, which also won’t get involved in board nominations, has agreed to the stipulations through Disney’s 2024 annual shareholder meeting, according to the filing.

Disney shares were slightly up in after-hours trading.

“We have a productive and collegial relationship with Third Point, with whom we share a deep commitment to continue building on Disney’s many successes and increasing shareholder value,” Disney CEO Bob Chapek said in the release.

Chapek welcomed Everson’s appointment to the board, pointing to her experience in digital advertising, which he said makes her “a great fit as we continue to position the company for long-term growth.”

Everson was at Meta, formerly Facebook, for more than 10 years, where she served as the social media platform’s ads chief. Although Everson had been considered one of the most prominent women — alongside Facebook’s former COO Sheryl Sandberg — she left the company after Marne Levine was promoted to chief business officer last summer.

Most recently, she did a brief stint as president of grocery delivery service Instacart, where she left after just three months. At the time, Instacart and Everson told CNBC the decision for her to leave was mutual.

With Everson, who will officially take her seat on November 21, Disney will have 12 board members.

Loeb initially eyed Disney’s ESPN business, saying spinning that division off would give Disney more flexibility to pursue sports betting and other business initiatives. However, shortly after, he reversed course.

“We have a better understanding of @espn’s potential as a standalone business and another vertical for $DIS to reach a global audience to generate ad and subscriber revenues,” Loeb said earlier this month in a tweet.

American homebuyers find UK bargains, discounted by a weaker pound

Street in Chelsea district, London

Alexander Spatari | Moment | Getty Images

American homebuyers are searching for bargains in the U.K., as a weaker pound contributes to double-digit price cuts.

The fall in the British currency over the past year, down 17.5% against the U.S. dollar so far in 2022, has made U.K. real estate cheaper for buyers paying in U.S. dollars. Prices in London are down nearly 20% over the past year as a result of price declines and currency impact, according to real-estate brokerage and advisory firm Knight Frank.

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Here's what to buy and sell amid the UK's market turmoil, money managers say

Here’s what to buy and sell amid the UK’s market turmoil, money managers say

Brokers and real-estate experts say the drops have created a rare investment opportunity for Americans to buy into the U.K. real-estate market — whether it’s a $400,000 London pied-a-terre or a $30 million historic estate in the countryside.

“We’ve seen a steady increase from Americans,” said Paddy Dring, Global head of Prime Sales at Knight Frank. “There are those who are forwarding their plans, and will use this opportunity for their longer-term investment plans to diversify abroad.”

Knight Frank said the combined price declines and currency drops have created an effective discount of 19% in London’s sought-after Chelsea neighborhood and 17% in Knightsbridge.

When compared with 2014, when the British pound was equivalent to $1.71 and real-estate prices in London were 13% higher, the discounts are even greater, at over 50% in the Chelsea, Knightsbridge and Notting Hill, according to Tom Bill, head of residential research at Knight Frank. The neighborhoods of Kensington and Mayfair have seen discounts of over 45%.

A property listed at 5 million pounds in Knightsbridge, for instance, would have cost $8.6 million in 2014, but $4 million today.

The savings are even larger on the biggest and most expensive estates. Steve Schwarzman, the billionaire CEO and chairman of Blackstone, just bought a 2,500-acre historic estate in Wiltshire County, about 90 miles west of London, for 80 million pounds. The drop in the sterling meant he may have saved up to $20 million or more on the purchase compared with last year.

Dring said American buyers run the spectrum — from older couples looking for smaller apartments, to families looking at studios for a son or daughter attending school in the U.K., to the ultra-wealthy looking for rare properties that make for good long-term investments.

“We don’t see much pure speculation,” he said. “The buyers are usually driven by a business or education or lifestyle.”

Dring said that despite the currency drop, supply of homes throughout the country remains scarce, especially for history country estates.

For those with money, though, the savings can be substantial. Brokerage Savills just listed one of the U.K.’s most historic properties — a 1,922-acre estate in the English countryside called Adlington Hall. The property spans six farms, over 20 residential buildings, an event space and a village hall. It was once owned by the British Crown and has been in the same family for over 700 years.

The asking price: 30 million pounds, or about $33 million with today’s currency exchange rates. That marks a savings of more than $6 million for U.S. buyers, paying in dollars, compared with a year ago.

House passes funding measure to avoid government shutdown

House impeachment manager Rep. Eric Swalwell (D-CA) delivers part of the impeachment managers’ opening argument in the impeachment trial of former President Donald Trump, on charges of inciting the deadly attack on the U.S. Capitol, on the floor of the Senate chamber on Capitol Hill in Washington, U.S., February 10, 2021.

U.S. Senate TV via Reuters

The House on Friday passed a stopgap funding measure to keep the federal government open until at least mid-December.

The continuing resolution measure was approved by a 230-201 margin with a majority-Democratic vote. The approval came a day after the Senate passed the same resolution in a down-to-the-wire vote.

President Joe Biden is expected to sign it into law later Friday.

If the resolution had not been passed, the government would have shut down due to Friday evening’s deadline for approval of the upcoming federal budget

Funding in the resolution includes approximately $12 billion in emergency aid for Ukraine, $18.8 billion for the FEMA Disaster Relief Fund, and $1 billion for heating and utility assistance.

The bill, which will fund the government until December 16, needed to pass before negotiations for the final 2023 budget could continue.

The resolution had stalled in Congress until Thursday due to objections by Republicans and progressive Democrats over language that if approved would have sped up the federal process for issuing permits for big energy projects, including pipelines and electrical lines.

The bill moved forward after Senate Majority Leader Chuck Schumer, D-N.Y., agreed to strike the language.

Carnival shares fall on ballooning costs, dragging cruise stocks lower

The brand new Carnival Cruise Line ship Mardi Gras, docked at Port Canaveral, Florida, on July 30, 2021.

Joe Burbank | Orlando Sentinel | Tribune News Service | Getty Images

Shares of Carnival fell below their pandemic lows Friday after the cruising company posted third-quarter earnings that revealed higher costs associated with inflation, supply chain disruptions and the maintenance of health and safety protocols.

Shares of Carnival were down around 20% in late morning trading. The stock fell to a 52-week low of $7.01 earlier in the session, below the stock’s pandemic plunge lows in April 2020, when shares traded around $7.80 intraday.

If Friday’s losses hold, it would knock almost $3 billion off Carnival’s market value. Shares of Norwegian and Royal Caribbean also fell Friday, down 14% and 11%, respectively.

Carnival reported adjusted net losses of $770 million, or 65 cents per share, on $4.3 billion in revenue. Operating costs and expenses totaled $3.4 billion during the quarter, compared with costs of $1.6 billion in the third quarter 2021.

Carnival said bookings improved 15 percentage points from the prior quarter to 84%. That compares with 54% occupancy during the same period in 2021. Despite governments relaxation of pandemic-era protocols in both the U.S. and, more recently, Canada, the company is projecting fourth-quarter bookings below 2019 levels — at lower prices.

Cruise companies across the board are struggling with massive debts taken on during Covid lockdowns, made more expensive by rising interest rates. Carnival on Friday morning reported $1 billion in principal payments so far for 2022 and a total of $9 billion due by 2025.

Arizona official brings legal challenge against Biden’s student loan plan

'There's a lot of people celebrating prematurely': GOP could try to block student loan forgiveness

Arizona Attorney General Mark Brnovich has brought a legal challenge against the President Joe Biden’s sweeping student loan forgiveness plan, possibly putting the administration’s proposal to wipe out much of the debt of tens of millions of borrowers in jeopardy.

“This mass debt forgiveness program is fundamentally unfair, unconstitutional and unwise,” Brnovich said in a statement on Thursday.

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The lawsuits against Biden’s plan to cancel up to $20,000 in student debt for millions of borrowers are starting to pile up. The first legal challenge came on Tuesday from a lawyer working for a conservative legal group. In addition, GOP attorneys general from a number of other states, including Iowa, Kansa and South Carolina, also brought a legal challenge against the policy this week.

Brnovich is arguing that the U.S. Department of Education doesn’t have the power to cancel hundreds of billions of dollars in consumer debt without Congress.

The White House did not immediately respond to a request for comment.

Six Republican-led states are also suing the Biden administration in an effort to halt its plan to forgive student loan debt for tens of millions of Americans, accusing it of overstepping its executive powers.

In the lawsuit, filed Thursday in a federal court in Missouri,  the Republican states argue that Biden’s cancellation plan is “not remotely tailored to address the effects of the pandemic on federal student loan borrowers,” as required by the 2003 federal law that the administration is using as legal justification. 

 The states of Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina joined in filing the lawsuit.

Something big could be about to break in markets as rates continue to rise

US Federal Reserve Board Chairman Jerome Powell pauses during a news conference in Washington, DC, on September 21, 2022.

Saul Loeb | AFP | Getty Images

I wrote about the action of central bankers last week, suggesting that the rapid increase in interest rates, led by the U.S. Federal Reserve, would lead to a meaningful break in financial markets, whether at home or abroad sometime soon.

Well, it appears that day has come.

On Wednesday, the Bank of England, the historical model on whose practices modern central banking is based, intervened in the British bond market, reportedly, to prevent spiking “Gilt” yields from sinking certain British pension funds. (Gilts are British bonds so named for their gold-edged paper on which they were once printed.)

Unbeknownst to many of us, some British pension funds, which in total hold about $1.7 trillion in assets, used derivatives both to hedge a rise in interest rates but also to amplify gains coming from certain kinds of trades.

In other words, pension funds used borrowed money to speculate in financial markets.

As rates shot up, some of those trades collapsed in value, creating margin calls on those self-same funds, triggering a near-Lehman moment in UK financial markets.

The BoE stepped in and bought bonds, driving long-term yields down by over a full percentage point there and drove U.S. 10-year yields down here, as well. That led to a reflex rally in stocks in bonds in Europe and the U.S. Wednesday, which was all but erased a mere 24 hours later.

‘An even bigger break’ ahead

The Fed needs to catch up to inflation without surprising markets, says Stanford's John Taylor

I have argued that the chosen historical analog is the wrong one to use as a guide to current policy.

For the historical record, while Volcker’s draconian policies were successful in taming inflation, they also came with an associated, and unanticipated, cost even beyond the deep double-dip recession that ensued.

Rapidly rising rates in the US put a strain on Latin American nations which had borrowed considerable amounts of money from U.S. commercial banks throughout the 1970s.

Those debts, largely denominated in dollars, were hammered by a combination of higher rates and falling domestic currency values, effectively and substantially increasing the debt service burden on those nations.

As rates rose sharply, Latin American nations threatened to default on their outstanding debts, an event that could have rendered many U.S. money center banks, effectively, insolvent. Volcker had no choice but to stop raising rates and start cutting them to relieve the strains on the U.S. banking system.

So, even under those circumstances, the Fed raised rates until something broke.

They would do that again in 1987 (October stock market crash), in 1994 (Mexican peso crisis and Orange Country bankruptcy) and would try in 1997 and 1998, but were stopped by the Asian currency crisis and the Russian debt default and subsequent, and massive, failure of Long-Term Capital Management. LTCM was a hedge fund that used so much borrowed money from U.S. banks to speculate on international bonds, its collapse threatened, again, the solvency of the entire U.S. financial system.

Fed will have to stop soon

Facebook scrambles to escape death spiral as users flee, sales drop

Facebook CEO Mark Zuckerberg testifies before the U.S. House Financial Services Committee during An Examination of Facebook and Its Impact on the Financial Services and Housing Sectors hearing on Capitol Hill in Washington on Oct. 23, 2019.

Xinhua News Agency | Getty Images

A year ago, before Facebook had turned Meta, the social media company was sporting a market cap of $1 trillion, putting it in rarefied territory with a handful of U.S. technology giants.

Today the view looks much different. Meta has lost about two-thirds of its value since peaking in September 2021. The stock is trading at its lowest since January 2019 and is about to close out its third straight quarter of double-digit percentage losses. Only four stocks in the S&P 500 are having a worse year.

Facebook’s business was built on network effects — users brought their friends and family members, who told their colleagues, who invited their buddies. Suddenly everyone was convening in one place. Advertisers followed, and the company’s ensuing profits — and they were plentiful — provided the capital to recruit the best and brightest engineers to keep the cycle going.

But in 2022, the cycle has reversed. Users are jumping ship and advertisers are reducing their spending, leaving Meta poised to report its second straight drop in quarterly revenue. Businesses are removing Facebook’s once-ubiquitous social login button from their websites. Recruiting is an emerging challenge, especially as founder and CEO Mark Zuckerberg spends much of his time proselytizing the metaverse, which may be the company’s future but accounts for virtually none of its near-term revenue and is costing billions of dollars a year to build.

Zuckerberg said he hopes that within the next decade, the metaverse “will reach a billion people and “host hundreds of billions of dollars of digital commerce.” He told CNBC’s Jim Cramer in June that the “North Star” is to reach those sorts of figures by the end of the decade and create a “massive economy” around digital goods.

Meta's Mark Zuckerberg on seeing a 'massive economy' around the metaverse

Investors aren’t enthusiastic about it, and the way they’re dumping the stock has some observers questioning if the downward pressure is actually a death spiral from which Meta can’t recover.

“I’m not sure there’s a core business that works anymore at Facebook,” said Laura Martin of Needham, the only analyst among the 45 tracked by FactSet with a sell rating on the stock.

Nobody is suggesting that Facebook is at risk of going out of business. The company still has a dominant position in mobile advertising, and has one of the most profitable business models on the planet. Even with a 36% drop in net income in the latest quarter from the prior year, Meta generated $6.7 billion in profit and ended the period with over $40 billion in cash and marketable securities.

The Wall Street problem for Facebook is that it’s no longer a growth story. Up until this year, that’s the only thing it’s known. The company’s slowest year for revenue growth was the pandemic year of 2020, when it still expanded 22%. Analysts this year are predicting a revenue drop.

The number of daily active users in the U.S. and Canada has fallen in the past two years, from 198 million in mid-2020 to 197 million in the second quarter of this year. Globally, user numbers are up about 10% over that stretch, and are expected to increase 3% a year through 2024, according to FactSet estimates.

“I don’t see it spiraling in terms of cash flows in the next few years, but I’m just worried that they’re not winning the next generation,” said Jeremy Bondy, CEO of app marketing firm Liftoff.

Sales growth is expected to hover in the single digits for the first half of 2023, before ticking back up. But even that bet carries risks. The next generation, as Bondy describes it, is now moving over to TikTok, where users can create and view short, viral videos rather than scrolling past political rants from distant relatives with whom they mistakenly connected on Facebook.

Meta has been trying to mimic TikTok’s success with its short video offering called Reels, which has been a major focus across Facebook and Instagram. Meta plans to increase the amount of algorithmically recommended short videos in users’ Instagram feeds from 15% to 30%, and Bondy speculates the company will likely “get tremendous revenue flow from that” algorithmic shift.

However, Facebook acknowledges it’s early days for monetizing Reels, and it’s not yet clear how well the format works for advertisers. TikTok’s business remains opaque because the company is privately held and owned by China’s ByteDance.

Sheryl Sandberg, who’s leaving the company on Friday after over 14 years as chief operating officer, said in her final earnings call in July that videos are harder than photos in terms of ads and measurement, and that Facebook has to show businesses how to use the ad tools for Reels.

“I think it’s very promising,” Sandberg said, “but we’ve got some hard work ahead of us.”

Skeptics like Martin see Facebook pushing users away from the core news feed, where it makes tons of cash, and toward Reels, where the model is unproven. Martin says Zuckerberg must know something important about where the business is headed.

“He wouldn’t be hurting its revenue at the same time he needs more money, unless he felt like the core business wasn’t strong enough to stand alone,” Martin said. “He must feel he has to try to move his viewership to Reels to compete with TikTok.”

A Facebook spokesperson declined to comment for this story.

Zuckerberg has at least one major reason for concern beyond just stalled user growth and a slowing economy: Apple.

The 2021 iOS privacy update, called App Tracking Transparency, undermined Facebook’s ability to target users with ads, costing the company an estimated $10 billion in revenue this year. Meta is counting on artificial intelligence-powered advertising to eventually make up for Apple’s changes.

That may amount to little more than a band-aid. Chris Curtis, an online marketing expert and consultant, has seen social networks rise and fall as trends change and users move along. And that problem isn’t solvable with AI.

“I’m old enough and I was there when MySpace was a thing,” said Curtis, who previously worked at Anheuser-Busch and McKinsey. “Social networks are switchable, right?”

When you look at Meta’s user numbers, Curtis said, they suggest the company is “not in a good position.”

‘Force for good or evil’

Former Facebook employee and whistleblower Frances Haugen testifies during a Senate Committee on Commerce, Science, and Transportation hearing entitled ‘Protecting Kids Online: Testimony from a Facebook Whistleblower’ on Capitol Hill, in Washington, U.S., October 5, 2021.

Jabin Botsford | Reuters

Denise Lee Yohn, author of brand-building books including “What Great Brands Do” and “Fusion,” said there’s little evidence to suggest that Facebook’s rebranding to Meta late last year has changed public perception of the company.

“I think the company still suffers from a lot of criticism and skepticism about whether they are a force for good or evil,” Yohn said.

Rehabilitating a damaged brand is difficult but not impossible, Yohn said. She noted that in 2009, Domino’s Pizza was able to successfully come back from a crisis. In April of that year, a video made as a prank by two restaurant employees went viral, showing one of them doing disgusting acts with food while cooking in one of the company’s kitchens. Both employees were arrested and charged with food contamination.

In December 2009, Domino’s launched a marketing blitz called the “Pizza Turnaround.” The stock climbed 63% in the first quarter of 2010.

Yohn said the company’s approach was, “We’ve been told our pizzas suck, and so we’re actually going to make substantive changes to what we are offering and change people’s perceptions.” While it sounded initially like “just marketing speak,” Yohn said, “they actually really did change.”

Zuckerberg, on the other hand, is not “coming across as a leader who is serious about changing his culture and about changing himself and about kind of creating a company that will be able to step into the future that he’s envisioning,” she said.

Meta’s reputational hit could also harm the company’s ability to recruit top-tier talent, a stark contrast to a decade ago, when there was no more prized landing spot for a hotshot engineer.

A former Facebook ad executive, who spoke on condition that his name not be used, told CNBC that even though TikTok is owned by a Chinese parent, it now has an edge over Meta when it comes to recruiting because it’s viewed as having less “moral downside.”

Ben Zhao, a computer science professor at University of Chicago, said he’s seeing that play out on the ground as an increasing number of students in his department are showing interest in working for TikTok and ByteDance.

In order to stay competitive, given how the market has punished tech stocks this year, Zhao said Meta and Google are “having to pay more and are having certainly to handout more lucrative stock options and packages.”

The bull case

Meta could grow the metaverse, but there's a long road ahead, says Jefferies' Brent Thill

Zhao, from University of Chicago, says there’s immense uncertainty surrounding the metaverse’s prospects.

“The real question is — are daily users ready for the metaverse yet?” Zhao said. “Is the underlying technology ready and mature enough to make that transition seamless? That’s a real question and that may not be all up to Facebook or Meta at this point.”

If Zuckerberg is right, perhaps 10 years from now Meta’s stock price from the depths of 2022 will look like the discount of the decade. And if that happens, predictions of a death spiral will be mocked like a 2012 cover story from Barron’s, headlined “Facebook is worth $15” with a thumb pointing down. Four years later, it was trading near $130.

WATCH: Needham’s Martin is a Meta skeptic

I'm not sure there's a core business at Meta that works anymore, says Needham's Martin

Putin declares ‘four new regions of Russia’ as Moscow annexes parts of Ukraine

Russian President Vladimir Putin speaks during a meeting on the military-industrial complex at the Kremlin, September 20, 2022, in Moscow, Russia.

Contributor | Getty Images News | Getty Images

Russian President Vladimir Putin on Friday declared four new regions of the country, shortly after signing a decree formally annexing parts of occupied Ukraine.

“There are four new regions of Russia,” Putin said from the Kremlin in Moscow, according to a translation.

“The results are known, well known,” Putin said, referring to the series of annexations that the West described as a sham. He claimed the results were due to the will of millions of people, saying they had the right to self-determination.

Putin’s comments come shortly after Moscow formally incorporated four occupied parts of Ukraine into the Russian Federation.

These include two self-proclaimed, pro-Russian “republics” in Luhansk and Donetsk in the east, and in Kherson and Zaporizhzhia in the south.

Unsurprisingly, the votes, seen as illegitimate, illegal and rigged by Ukraine and its allies, saw a majority of people vote to join Russia.

Sham referendums in occupied Ukraine are taking place 'under the barrel of the gun'

Ukraine said the referendums were carried out “under the barrel of a gun” and called on its international allies to immediately ramp up severe sanctions on Russia in order to deter it from annexing more territory as it did with Crimea in 2014.

Kyiv said it will not stop fighting until it has reclaimed every last inch of land lost to Russia and said it will not negotiate with the Kremlin following the so-called votes.

Moscow, for its part, has warned it has “the right” to use nuclear weapons to defend its territory and citizens if it feels there is an existential threat, or even if it’s attacked by conventional weapons.

This has raised concerns that it could resort to using nuclear weapons against Ukraine now that more regions are annexed and Moscow can claim them, however falsely, as their own. One Ukrainian defense ministry official told CNBC this week that Kyiv understands the threat of such an attack is “real.”

War escalating

It is thought Moscow’s latest move is likely to escalate and prolong the war even further, making it more complex to reach a peaceful resolution.

Changes to Russia’s constitution made in 2020, under Putin, mean that it is illegal for Russia to give away any part of its territory to a foreign power, meaning it is unlikely to ever willingly cede territory back to Ukraine.

All the signs point to Putin deciding to up the ante in the war, having ramped up the nuclear rhetoric and ordered a military mobilization that has seen 300,000 reservists called up, with many trying to flee the draft, to be sent to fight in Ukraine with poor training and little equipment.

Russia’s Putin announces partial military mobilization