Happy Wednesday, !

This week’s world-famous news haiku competition™ is about the Iran… war? conflict? kerfuffle? ado? spat? mess? brouhaha? difference of opinions? Let’s just call it “the Iran situation.” Send me your entry — to haiku at cheddar dot com — by noon ET Thursday, for consideration by your Cheddar peers.

Also, three’s some other news you Need2Know…

Matt Davis — Need2Know Chedditor

News You Need2Know

• Jack Dorsey blamed AI for layoffs. Critics said na …

• Paramount Skydance debt downgraded to "junk" statu …

• This crossing guard grosses $16,000 a month maili …

• Dow dips 1,200 points then goes back up 900

• “First to fly” wins in the air taxi wars

• Poll of the day: Crossing guard media disruption

What’s the stock market up to, eh?

$SPX ( ▼ 1.22% ) $DJI ( ▼ 1.58% ) $NDX ( ▼ 1.24% )  

Companies mentioned in today’s newsletter

$XYZ ( ▲ 1.47% )  $MFG ( ▼ 1.4% )  $PSKY ( ▲ 0.29% )  $WBD ( ▼ 0.2% )  $SPGI ( ▲ 0.45% )  $ACHR ( ▼ 5.25% )  $JOBY ( ▼ 5.16% )  $BZG23 ( 0.0% )  $LQNT ( 0.0% )$NVDA ( ▼ 0.46% )  

Jack Dorsey blamed AI for layoffs. Critics said nah.

Block Inc., $XYZ ( ▲ 1.47% ) the payments giant founded by Twitter founder Jack Dorsey, laid off 40% of its workforce last week: more than 4,000 employees. Dorsey attributed the cuts to the exponential advancements in AI, which I believe you may have heard of, and which stands for “artificial intelligence.” 🤷

“Within the next year, I believe the majority of companies will reach the same conclusion and make similar structural changes,” he told Twitter, and Block’s stock saw an immediate 20% uptick following the announcement.

But critics have, let’s say, “raised” “doubts” about AI being the driving force behind the layoffs. Dan “Double D“ Dolev of Mizuho Americas $MFG ( ▼ 1.4% ) remarked on the company’s history of overhiring, telling the Wall Street Journal, “The vast majority of these cuts were probably not due to AI,” and citing “a significant amount of bloating” over recent years. We get it: We have dairy issues, too.

Former Block employee Jason “Harsh” Karsh also slammed the justification on X, writing “This isn’t an AI story. It’s a workforce correction wearing an AI costume.”

The layoffs followed years of hiring sprees, costly acquisitions, and Dorsey’s “intermittent” leadership style, Karsh suggested. Dorsey only eats one meal a day and fasts all weekend. He often avoids speaking for 10 days at a time and takes daily ice baths, sauna sessions, and walks more than five miles to work. Still, who among us hasn’t behaved like that from time to time while also shepherding multi-billion-dollar investment rounds at a major startup? If skipping a meal here and there lands you in the C-suite, it will have been worthwhile.

Paramount Skydance debt downgraded to "junk" status after Warner Bros. deal

Paramount Skydance’s $PSKY ( ▲ 0.29% ) ambitious acquisition of Warner Bros. Discovery $WBD ( ▼ 0.2% ) has raised significant financial red flags. Fitch Ratings, which helps investors figure out if a bond issuer’s word is good enough for them to pay back their loans, announced the downgrade of Paramount Skydance’s long-term issuer default rating from “BBB-” (which as we all know, means “investment grade”) to “BB+” (which as we all know, signifies “junk” status), citing competitive pressures and ongoing cash flow challenges tied to the acquisition. The firm’s unsecured debt was also downgraded to junk.

The company’s acquisition of WBD — valued at $111 billion — will see Paramount assume $33 billion in WBD’s existing debt, bringing its total long-term debt to a staggering $79 billion. Despite the risks, Fitch acknowledged that the deal could bolster Paramount’s competitive edge by expanding its portfolio of premium content and increasing its pricing power.

However, concerns about regulatory scrutiny, escalating costs, and integration complexity dominate the conversation. S&P Global $SPGI ( ▲ 0.45% ) , which previously rated Paramount as “BB+” (junk), also remarked that the acquisition would push Paramount’s leverage “well above” its further downgrade threshold. “[This deal] will also increase its exposure to linear TV,” S&P warned, noting that some people still watch television on [checks notes] “cable.” I think that’s like rabbit ears, right?

I guess you could turn on CNN to find out more about the details here, but it’s likely the content there — already behind a paywall — might also receive a different kind of downgrade on the deal. Best you stick with Cheddar, my friends, for truly fair and balanced balanced and fair content, not to mention unfair and unbalanced but remarkably strong and mature cheese puns.

Quote of the Day

This crossing guard grosses $16,000 a month mailing out her musings from the job

Christine Tyler Hill, a Vermont designer and illustrator, has transformed her morning gig as a crossing guard into a surprising entrepreneurial venture, blending art and offline connection, the Wall Street Journal reports. Standing at an intersection in Burlington every morning, Hill began sharing daily musings and illustrations about her surroundings — moments like spotting a dachshund on the crosswalk — on social media. Her posts resonated deeply, building a loyal audience eager for more.

These early “cloud reports” inspired Hill to launch a subscription-based mail club in January 2024. Subscribers pay $8 a month to receive an eight-page magazine filled with her illustrations and reflections from her intersection and art studio. Within days, her concept took off, amassing 1,000 subscribers and later growing to include a waitlist of 3,600. “People really want physical things,” Hill said of the overwhelming demand. “The response to it has been crazy.”

Social strategist Carmen Vicente noted Hill’s success highlights a growing hunger for tangible joys in a digital world. “It’s really nice to devote your entire attention to something,” Vicente explained.

Now with global subscribers from Germany to Singapore and 2,000 members actively receiving her mailers, Hill’s venture connects far-flung admirers to her small Vermont crossroads, proving even everyday moments can inspire extraordinary connections and creativity.

Next up, subscribe to come and visit my N2K cave paintings for a modest fee. Or subscribe to an optional ad-free version of Need2Know for just $5 a month!

Dow dips 1,200 points then goes back up 900

Markets opened Tuesday morning tanking as the U.S.-Iran conflict continued to escalate, driving oil prices higher and unsettling investors. Then markets clawed back most of the losses:

The Dow Jones Industrial Average dropped 371 points, or 0.8%, recovering considerably after an earlier 1,200-point plunge. The S&P 500 and Nasdaq also slipped by 0.9% each, having pared back earlier losses of as much as 2.5%.

Brent crude oil surged 6% to over $82 a barrel $BZG23 ( 0.0% ) , sparking fresh concerns about inflation just as investors were hoping for relief from Federal Reserve rate cuts. Jeffrey O’Connor, U.S. head of equity market structure at Liquidnet $LQNT ( 0.0% ) , warned about the economic impact: “The possibility of high oil prices becoming sticky can weigh on markets for the next several weeks. The Strait of Hormuz is closed… and that can’t be overlooked,” he told CNBC.

Tech stocks, which led Monday’s rebound, fell again, with companies like Nvidia $NVDA ( ▼ 0.46% ) and memory stocks taking a hit. Investor uncertainty continues to mount as the conflict disrupts global markets, with O’Connor noting, “Historically, the U.S. market is able to overlook a geopolitical shock like this, but this time feels different.”

We asked on Tuesday morning, “Are you surprised the stock market didn't tank because of the war in Iran?” You answered:

🟩🟩🟩🟩🟩🟩 Nothing surprises me about the stock market any more. (475)
🟨⬜️⬜️⬜️⬜️⬜️ Yes. I expected it to tank by at least 5%. What the heck!? (92)

(567 Votes via @beehiiv polls).

And I guess that says an awful lot, really, about where we’re at today. Thanks, Cheddfriends. I really appreciate you expressing your helpful opinions through our polls!

Song of the Day: Absolutely, ‘Paracosm’

“Paracosm” is a highly praised, cinematic, and exploratory soul-pop album that embraces childlike wonder and creative freedom. All the more remarkable, this comes from a South London songwriter, and this is the title track. Enjoy!

Free yourself from advertising forever!

“First to fly” wins in the air taxi wars

The Electric Vertical Takeoff and Landing (EVTOL) industry is in a pivotal race. As companies like Archer $ACHR ( ▼ 5.25% ) and Joby $JOBY ( ▼ 5.16% ) aim for a commercial air taxi service by the "end of 2026," the skies are heating up, not just with innovation, but with legal battles.

The core of the conflict, according to The Verge’s transportation editor Andrew “Screamin’ Jay” Hawkins, is intellectual property. Since these companies are "sort of pre-revenue at this point," their IP is "really kind of a part of the strategic moat." This has led to patent infringement lawsuits, such as the one between Archer $ACHR ( ▼ 5.25% ) and Vertical $EVTL ( ▼ 0.49% ) , as aerospace engineers are "all trying to solve the same problems around battery weight and lift and noise."

The designs are converging because regulators like the FAA are preferring certain aircraft types, forcing the industry to narrow its focus, Andrew said. This consolidation is a sign of things to come, with investors closely watching for companies that have the right intellectual property.

Beyond the boardroom battles lies the ultimate challenge: Physics. The "prospects of electric flight" are considered the "holy grail" for decarbonizing aviation. However, as Hawkins points out, it runs into "physics problems around weight, and how much weight that you can sustain while also achieving liftoff is extremely challenging."

Don’t try to fly too close to the sun, folks.

Should you check your 401(k) today?

👎️ 

Safe to say, “No.”

Poll of the day: Crossing guard media disruption

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P.S. So, you remember the cheese puns that used to open this newsletter? Suffice to say, they were divisive. Now, thanks to a thing called “dynamic content options,” I can offer you the option to see cheese puns again, if you’re one of the thousands who got in touch bemoaning their departure six months ago. All you need to do is answer “true” on this survey, and submit it. If you never want to see cheese puns in this newsletter again, don’t click that link, don’t fill out the survey, don’t submit it. Just keep reading and pretend this conversation never happened. Mmmkay? Thank you.