TechCrunch : Netflix buys independent game developer Boss Fight in latest gaming

Netflix buys independent game developer Boss Fight in latest gaming acquisition

Netflix has acquired Texas-based independent game developer Boss Fight Entertainment, the company announced in a blog post. The financial terms of the deal were not disclosed. The deal, which marks Netflix’s third acquisition of a gaming company, is part of the streaming service’s ongoing push toward gaming.
Boss Fight was founded in 2013 by former Zynga Dallas and Ensemble Studios employees. Netflix says the studio’s experience with building games across genres will help accelerate its ability to provide Netflix users with more titles. The Boss Fight team will continue to operate out of their current studios in Dallas, Austin and Seattle.
“Boss Fight’s mission is to bring simple, beautiful, and fun game experiences to our players wherever they want to play,” said Boss Fight Entertainment founders David Rippy, Bill Jackson and Scott Winsett, in a statement. “Netflix’s commitment to offer ad-free games as part of members’ subscriptions enables game developers like us to focus on creating delightful game play without worrying about monetization. We couldn’t be more excited to join Netflix at this early stage as we continue doing what we love to do while helping to shape the future of games on Netflix together.”

Earlier this month, Netflix announced that it was acquiring Finland’s Next Games, a developer of mobile games, for a total value of €65 million ($72 million). The free-to-play mobile games publisher already has developed titles related to some of Netflix’s biggest draws, such as “Stranger Things” and “The Walking Dead.” The deal is expected to close in Q2 2022.
Last September, Netflix acquired Night School Studio, the independent game developer known for narrative-driven titles like “Oxenfree.” The financial terms of the deal were not disclosed. Night School executives had said that the studio would continue to work on Oxenfree II and other Night School titles.
The acquisitions are part of Netflix’s bigger strategy to build out its gaming content to complement its video catalog.
“We’re still in the early days of building great game experiences as part of your Netflix membership,” Amir Rahimi, the vice president of game studios at Netflix, said in a statement. “Through partnerships with developers around the world, hiring top talent, and acquisitions like this, we hope to build a world-class games studio capable of bringing a wide variety of delightful and deeply engaging original games – with no ads and no in-app purchases – to our hundreds of millions of members around the world.”

Netflix has been building out its gaming service since late last year, when the company debuted its initial lineup that included a couple of “Stranger Things”-themed titles and other casual games.
Since then, Netflix has rolled out several other titles, including “Arcanium: Rise of Akhan,” “Asphalt Xtreme,” “Bowling Ballers,” “Card Blast,” “Dominoes Café, “Dungeon Dwarves,” “Hextech Mayhem: A League of Legends Story,” “Knittens,” “Krispee Street,” “Shooting Hoops,” “Teeter (Up)” and “Wonderputt Forever.” Earlier this week, the company expanded its lineup with two games called “Shatter Remastered” and “This Is A True Story.” Netflix also teased its first upcoming first-person shooter title called “Into the Dead 2: Unleashed.”
The company explained to investors during its Q4 earnings call that these initial gaming launches are more about setting up Netflix to better understand what consumers want from the new service. Netflix has yet to detail how well its games are performing, only saying that it has a “growing number” of both daily active and monthly active users on its gaming titles. Netflix has also hinted that it’s open to licensing larger game IP that people will recognize in the future.

(ZH) How The West's Ban On Russian Gold Could Backfire

How The West's Ban On Russian Gold Could Backfire

  • The latest round of sanctions imposed on Moscow by the West is drawing some mixed reactions from experts.
  • The U.S. announcement to block gold transactions was done alongside Group of Seven and European Union allies that will also impose the gold reserve ban.
  • “Any sanctions on Russia’s gold reserves would do little more than reveal the degree to which government bureaucrats don’t understand gold.”
Following Russia's invasion of Ukraine about a month ago, the U.S. and its western allies swiftly imposed a raft of economic and trade sanctions on Russia, notably on buying oil, a partial SWIFT ban and against billionaire oligarchs seen as close to President Vladimir Putin. Russia hit back by imposing export bans including telecoms, medical, vehicle, agricultural, and electrical equipment, as well as some forestry products such as timber.

But it’s the latest round of sanctions that has been drawing mixed reactions across the board: the U.S. ban on gold transactions with Russia.
On Thursday, the U.S. made it clear that any transaction involving gold related to the Central Bank of the Russian Federation is already covered by existing sanctions, and any violations were likely to attract secondary sanctions.
Russia has an estimated $132 billion in gold stockpiles, roughly 20% of the holdings in the Russian Central Bank, thanks to heightened buying activity since the 2014 annexation of Crimea. Those reserves, coupled with Russia’s $630 billion in foreign exchange reserves, can help finance its war machine.
“U.S. persons, including gold dealers, distributors, wholesalers, buyers, individual traders, refineries, and financial institutions, are generally prohibited from engaging in or facilitating prohibited transactions, including gold-related transactions in which blocked persons have an interest,” according to a release from the Treasury on frequently asked questions.
The U.S. announcement to block gold transactions was done alongside Group of Seven and European Union allies that will also impose the gold reserve ban. Putin’s foreign minister Sergey Lavrov has termed the foreign reserves ban ‘thievery,’ with finance minister Anton Siluanov revealing earlier this month that about $300 billion had been frozen.
A cross-section of experts, however, is not optimistic that a gold ban will be equally effective while others say that Putin might have unveiled the ultimate countermeasure against all sanctions.
Propping the ruble
There’s growing speculation by U.S. officials that Russia is using its vast gold reserves to support its currency as a way to circumvent the impact of sanctions. One way to do that is by swapping the gold for a more liquid foreign exchange that is not subject to current sanctions. Another way would be to sell the bullion through gold markets and dealers. The gold could also be used to directly purchase goods and services from willing sellers.
However, some experts are now questioning the rationale behind banning Russian gold transactions.
“Any sanctions on Russia’s gold reserves would do little more than reveal the degree to which government bureaucrats don’t understand gold. The beauty of gold, unlike currencies, is that it is an untrackable store of value that has no counterparty,” Brien Lundin, editor of Gold Newsletter, has told MarketWatch.
“At least in smaller amounts, Russia could easily sell gold on the open market. In bulk quantities, it could just as easily sell the gold to China with no record of the transaction,” Lundin has added, noting that China has demonstrated that it is an “eager buyer of gold.”
Jeff Wright, chief investment officer at Wolfpack Capital, says selling gold is probably not Russia’s first choice anyway because it could effectively signal a complete collapse of its economy and a sign of weakness by Russian leadership. Rather, Russia is more likely to resort to selling discounted oil to Russian-aligned countries, rather than selling gold, according to Wright.
And, these experts might be right on the money.
A couple of days ago, Putin instructed Russian oil and gas companies to sell their oil and gas to unfriendly countries exclusively in rubles.
Rubles for oil
Putin has ordered that gas contracts with "unfriendly" countries--those responsible for sanctions against Russia--be settled in rubles rather than in foreign currencies and gave Russia's central bank and gas suppliers like Gazprom one week to implement the change.
Last year, about 97% of Gazprom’s foreign gas sales were in euros and dollars.
Maybe Putin need not have gone that far thanks to the western heavy reliance on Russia’s energy commodities.
Energy payments are a lifeline for Russia’s increasingly isolated economy, and western gas sales have been softening the blow by harsh sanctions. After crashing as much as 40% in the wake of Russia’s invasion of Ukraine, the ruble has managed to claw back much of its losses against the dollar, though it’s still trading nearly 30% below pre-invasion levels. The ruble briefly strengthened to a three-week peak of 95 rubles to the U.S. dollar on news of Putin's order, before settling weaker at 98 rubles to the dollar.
It’s not clear how far Putin is willing to go to enforce the order. Last week, Russia made a critical bond payment in U.S. dollars despite speculation that it might choose to pay in rubles or even default altogether.
"In an extreme scenario, insisting on ruble payments may give buyers cause to re-open other aspects of their contracts--such as the duration--and simply speed up their exit from Russian gas altogether," Vinicius Romano, senior analyst for Rystad Energy, has told Fortune.
In the final analysis, sanctions are likely to deal a big blow to the Russian economy, but Russia still might have significant leverage to soften the blow.

(ZH) Exxon Is Using Its Excess Natural Gas To Mine Bitcoin

Exxon Is Using Its Excess Natural Gas To Mine Bitcoin

In a move that is surely going to be some type of new microaggression for environmental activists, Exxon has begun a pilot program to use its excess natural gas to power power cryptocurrency-mining operations.
The oil and gas supermajor has started to program using excess gas that would "otherwise be burned off from North Dakota oil wells", according to a new report from Bloomberg. But the company has plans to potentially expand the idea globally, if it catches on and is found to be worthwhile.
Exxon has a new agreement with Crusoe Energy Systems, the report says, to use gas from an oil well pad in the Bakken shale basin to power mobile generators. The pilot project reportedly began in January 2021 and expanded in the summer of last year.
The mining operation uses "up 18 million cubic feet of gas per month" that otherwise would have been burned off or flared.
Exxon is considering similar projects in places like Alaska, Nigeria, Argentina, Guyana and Germany, the report says.
An official Exxon spokesperson said: “We continuously evaluate emerging technologies aimed at reducing flaring volumes across our operations.” She said the company wouldn't comment on “rumors and speculations regarding the pilot project."
Exxon has said it intends to meet the World Bank's call to end routine flaring by 2030.
Its partner, Crusoe, is backed by Bain Capital, the Winklevoss brothers and former Tesla VC Valor Equity Partners. The company has 20 portable engines permitted for use in North Dakota, of which Bloomberg notes that 11 have operators. Crusoe also has similar projects in place for Equinor and Devon Energy.
“It is creating use of what would be otherwise wasted,” said Danielle Fugere, president of As You Sow, an environmental shareholder-activist group. But still, her praise was qualified by stating that it would "be better if the company worked more aggressively to transition away from fossil fuels".
Can't say we're surprised...

(ZH) After Biden Sparks "Global Uproar" With Regime Change Comment, Blinken Awkw

After Biden Sparks "Global Uproar" With Regime Change Comment, Blinken Awkwardly Tries To Walk It Back

Secretary of State Antony Blinken on Sunday while on a visit to Jerusalem to meet with Israeli PM Naftali Bennett continued the White House's efforts to try and clean up the mess unleashed by Joe Biden's words from Warsaw the day prior where he issued statements tantamount to calling for regime change in Russia.
"I think the president, the White House, made the point last night that, quite simply, President Putin cannot be empowered to wage war or engage in aggression against Ukraine or anyone else," Blinken said, clearly trying to greatly alter the plain meaning of the words Biden spoke.
Biden had concluded the televised Warsaw speech by bluntly saying of Putin (who he also had called a "butcher" in a separate statement to a reporter)... "For God’s sake, this man cannot remain in power."Within the very hour as headlines spread around the world that the US president called for regime change in Moscow, and none other than the deep state's preferred mouthpie, the Washington Post, said Biden "sparked a global uproar", the White House desperately scrambled to walk it back.
A White House official tried to clarify to Bloomberg, "The President’s point was that Putin cannot be allowed to exercise power over his neighbors or the region. He was not discussing Putin’s power in Russia, or regime change." But Biden appeared to be reading a carefully prepared written speech from the teleprompter.
Blinken's Sunday explanation of Biden's words continued:
"As you know, and as you have heard us say repeatedly, we do not have a strategy of regime change in Russia — or anywhere else, for that matter," the US’ top diplomat said.
"As in any case, it’s up to the people of the country in question. It’s up to the Russians," Blinken said.
Kremlin Spokesman Dmitry Peskov had hit back after Biden's speech, stressing that it is not up to the White House or any country anywhere for that matter to decide who is in power in Russia. "​The president of Russia is elected by Russians​," Peskov said dismissively on Saturday.
Biden's words also triggered an avalanche of commentary in the West from pundits warning that this kind of talk is dangerous given two nuclear-armed superpowers already appear headed toward a war-footing and possible direct clash over Ukraine. Further the Russians have already warned that they could completely sever diplomatic ties over Biden's prior "murderous dictator" and Putin is a "thug" comments.
Those fiery references weren't absent from Biden's Saturday speech, where he doubled down of this theme of "evil" Putin, saying, "A dictator bent on rebuilding an empire will never erase a people’s love for liberty. Brutality will never grind down their will to be free. Ukraine will never be a victory for Russia — for free people refuse to live in a world of hopelessness and darkness."
Just prior to the Saturday Warsaw speech, an op-ed in The Wall Street Journal had urged, The President Should Avoid Public Speaking ...at least when the topic is important.
Commenting on prior dangerous "gaffes" - the piece stated, "A good number of us will cling to the belief that the president was confused and didn’t understand what he was saying, which is all the more reason for him to avoid deviating from a prepared text in this perilous time."
The question remains, was this a mere "gaffe"? Anti-war journalist Michael Tracey and others say no: "Biden’s call for regime change in Russia wasn’t some off-the-cuff “gaffe.” It was declared as the climax of a carefully choreographed, “legacy-defining” speech, in a deliberately chosen venue (Poland) where the call would be well-received."
And then this:

WSJ : Yandex, Russia’s Internet Giant, Struggles to Dodge Geopolitics

Yandex, Russia’s Internet Giant, Struggles to Dodge Geopolitics
Dubbed ‘Russian Google,’ Nasdaq-listed company wants to get rid of media assets to avoid inevitable political questions following Kremlin’s invasion of Ukraine

If you thought Silicon Valley had a problem with politics, spare a thought for Russia’s top internet company.

Nasdaq-listed Yandex, which runs the largest Russian search engine and ride-hailing service, is caught between its local customers and regulators on the one hand, and American technology and finance on the other. The latest flashpoint is the potential sale of its media interests, which consist of a news-aggregation service similar to Google News and a social platform called Zen.

Since Russia’s invasion of Ukraine, the Kremlin has cracked down on dissident voices by criminalizing what it considers false information—such as calling what President Vladimir Putin terms a special military operation in Ukraine a war. Yandex’s aggregator, which under local regulations is only allowed to show licensed content, displays news that hews ever more closely to the official line.


The messenger has come under fire. One casualty is Yandex’s former executive director and deputy chief executive, Tigran Khudaverdyan, who recently has been sanctioned by the European Union despite having made his name in the company’s ride-hailing division. The EU cited the news service, as well as Mr. Khudaverdyan’s attendance of a Kremlin meeting on the day of the invasion, as reasons for putting him on the sanctions list. He resigned from his Yandex roles.

Before his sanctioning, Mr. Khudaverdyan wrote a Facebook post arguing that, although “war is a monstrous thing,” Yandex needed to keep its head below the parapet and carry on offering tech solutions to the Russian people. The company now seems to be taking a similar view by “exploring strategic options” for its news aggregator and Zen. It is trying to position itself as an apolitical technology provider—a strategy inimical to media assets under an authoritarian regime.

Fast-growing Zen is much more valuable than the aggregator and hasn’t yet come in for criticism. As pressure increases on the likes of Facebook to take more responsibility for the content on their platforms, Yandex appears to see a risk that its social-media channel could also become a problem.

One of the biggest challenges the company faces is a brain drain if its well-educated staff see its apolitical stance as little better than complicity in Mr. Putin’s repressive rule. Until now, the company has kept at the cutting edge of consumer technology by retaining bright Russian computer scientists who could easily get jobs in the U.S. Some will leave; the only question is how many.

The consequences of harsh economic sanctions against Russia are already being felt across the globe. WSJ’s Greg Ip joins other experts to explain the significance of what has happened so far and how the conflict might transform the global economy. Photo Illustration: Alexander Hotz
This is by no means the company’s only problem. Imports of vital technology hardware are on pause as vendors wait to see how sanctions play out. Trading in its stock is suspended, which has triggered an obligation it can’t readily meet to redeem a $1.25 billion convertible bond. Russia’s economy is under intense pressure, which will hit the company’s growth.

Yandex’s search business is highly profitable, like Google’s, which should provide some financial security while it is cut off from Western capital. That stands in contrast to the situation at Ozon, a cash-burning e-commerce company pitched as Russia’s Amazon.com in a Nasdaq initial public offering less than 18 months ago. Still, Yandex will need to tighten its belt: Its strategy of plowing search profits into less-developed markets such as food delivery is no longer viable.

In November, the company hit a peak market value of about $31 billion. Its shares are now literally uninvestable with an aggregate value below $7 billion. Such dramatic falls from grace usually follow corporate scandals, not geopolitical ones companies can do little to resolve. Yandex’s refuge in a studied neutrality just shows how few good options it has.

WSJ : Shanghai Imposes Staggered Lockdowns to Keep Coronavirus at Bay

Shanghai Imposes Staggered Lockdowns to Keep Coronavirus at Bay
Decision comes day after officials denied lockdown plans

Shanghai announced staggered lockdowns and mandatory citywide testing on Sunday, subjecting China’s financial center to the type of stringent pandemic restrictions it has long tried to avoid.

Local authorities said they plan to split the city of more than 25 million residents in two, locking down one half and then the other over the next week and a half as the city tries to control an outbreak of the highly infectious Omicron variant of the Covid-19 virus.

Shanghai residents living east of the Huangpu River, which bisects the city, will be ordered to stay inside their residential compounds, with public transportation halted and strict limits on traffic in and out of the area for five days starting Monday, the local government said in a notice posted on its social media account late Sunday.

The same measures will then be imposed west of the river for five days starting April 1, according to the notice, which didn’t explain why authorities decided to do the lockdown in phases.

Shanghai, one of the wealthiest and most developed cities in China, reported 2,676 confirmed coronavirus cases for Saturday, all but 45 of them asymptomatic, according to a social media post by the Shanghai government.

China recorded a total of more than 5,700 new Covid-19 infections on Saturday. Shanghai accounted for more than half of the new asymptomatic cases.

As recently as Saturday, Shanghai government officials denied plans for a full lockdown. City police also previously said they had punished two offenders who were spreading false information online about a potential lockdown.

“It wouldn’t work” Wu Fan, a local medical official, said at a news briefing in response to suggestions the city should contemplate a lockdown. “Our city plays an important role in the national economic and social development, and even has an impact on the global economy.”

The measures announced Sunday fall short of the full lockdowns previously imposed on other Chinese cities such as Wuhan and Xi’an.

According to the municipal government statement, essential workers and service providers such as medical staff, police and food delivery workers will still be allowed to move about provided they show a work pass.

Companies and factories will be allowed to maintain operations under “closed loop production,” a term that has been used by local governments in the past to refer to businesses operating in a bubblelike environment, with staff working, living and staying within the factory campus, without leaving the site.

Shanghai hopes to “achieve dynamic zero-Covid strategy as early as possible,” Sunday’s statement said.

Shanghai is home to factories run by several multinationals, including U.S. car makers Tesla Inc. and General Motors Co. China’s largest chip maker Semiconductor Manufacturing International Corp. also has a large manufacturing presence in the city. It couldn’t be determined if those companies would need to halt production under the tightened restrictions. Tesla, GM and SMIC didn’t immediately reply to requests for comment sent late Sunday night.

China has sought to wean itself off disruptive and costly all-out lockdowns, but faces an immense challenge with the Omicron variant putting stress on the country’s healthcare and governance systems.

A strategy of hospitalizing and isolating Covid-19 patients and their close contacts also has come at a cost. As of Friday, 41 of Shanghai’s main hospitals had suspended some outpatient and emergency services because of anti-Covid-19 measures. A nurse’s death from asthma after she was denied access to her own hospital’s emergency room recently roiled Shanghai residents frustrated over weeks of district-level restrictions imposed by the government.

FT : Daimler trucks chief warns cost of electric will ‘forever be higher’

Daimler trucks chief warns cost of electric will ‘forever be higher’
World’s largest truckmaker more than tripled the sales of zero-emission trucks and buses last year

The cost of building a battery-powered truck will “forever be higher” than a combustion engine equivalent, the boss of the world’s largest truckmaker has warned, as the war in Ukraine accelerates an already rapid rise in the price of crucial commodities.

“If you take the entirety of engine, transmission, axle, tank system, cooling . . . ” the chief executive officer of Daimler Truck, Martin Daum, told the Financial Times, “we have a maximum of about €25,000 [of material in a combustion engine truck].”

“How much battery do you get for €25,000? Even if [battery costs fall to] €60 per kilowatt hour, and I need 400 kilowatt hours, then I need €24,000 alone for the battery cells [in a single truck]”.

He added that it would be up to governments to make up the difference, using whichever mechanism they chose. “Without any subsidies . . . the price of an [electric] truck will always, forever be higher than a [combustion engine] truck.”

Daum’s comments come after Daimler Truck, which was an early entrant into the electric market and has been manufacturing batter-powered vehicles since 2017, reported that it had more than tripled the sales of zero-emission trucks and buses last year, to a total of 712.

However, that accounts for a fraction of the 455,000 trucks and buses the company delivered in total in 2021.

Its long-haul eActros model, which went into series production last year, still costs three times the price of its combustion engine equivalent, and that gap is unlikely to narrow significantly in the near future.

The cost of the key raw materials used in modern batteries has risen sharply over the past year, with cobalt and lithium more than doubling in price, and nickel climbing by almost 40 per cent, according to IHS Markit.

As a result, battery pack prices, which fell to an average of $132 per kilowatt hour in 2021, according to a survey conducted by BloombergNEF, are predicted to remain above the $100 level until at least 2024.

Daum, who like other bosses in the industry has called for a tax on carbon to narrow the cost disparity between combustion engine trucks and battery-powered models, said he nonetheless supported efforts by the German government to help businesses deal with soaring diesel costs.

“We have to raise the price over time,” the executive said, “we can live with two or three euros per litre, but we can’t live if that comes overnight.”

Daimler Truck, whose longstanding strategy has been to pursue both battery-powered and hydrogen trucks, could focus more on the latter if battery costs continued to soar, and commodities remained scarce, Daum added.

“In the fuel cell, we have far less rare raw material,” he said, “and we don’t compete with millions of passenger cars for the same material.”

Daum praised German economics minister Robert Habeck for signing an agreement with Qatar last week for the delivery of hydrogen, as well as for the supply of liquid natural gas.

But he criticised antitrust authorities in Brussels for dragging their feet when it comes to approving a joint venture between Daimler and its key competitors Volvo and Traton, which will spend €500mn on developing a network of 1700 truck charging points in Europe.

“We are ready to invest the money,” he said, “we have someone ready to take over the chief executive role and she can’t do it because we don’t have the approval.

“It should have been done three months ago. We should have been up and running operationally.”

FT : US companies buy back shares in record volumes

US companies buy back shares in record volumes
Repurchasing spree aims to tap volatile markets and reassure investors as growth slows

US companies are rushing to repurchase large volumes of shares to take advantage of recent stock market volatility and reassure investors as growth slows.

A record $319bn of new share buybacks have been authorised so far this year, according to Goldman Sachs data, with rising numbers of companies using “accelerated” deals to buy large volumes as quickly as possible while their share prices are depressed. There were $267bn in share buybacks at the same point in 2021.

Even recently listed companies, that traditionally spend cash to fuel growth rather than return excess to shareholders, have joined the trend after sharp drops in their stock prices make repurchases more attractive.

“The breadth of different industry groups buying stock is the highest we’ve seen in a few years, and volumes have increased,” said Michael Voris, Goldman Sachs’ head of structured equity. “That’s much more due to the market backdrop as opposed to anything else.”

Management teams use share buybacks to prop up demand for their stock and increase their profitability on an earnings per share basis by reducing the number of shares in circulation.


The average stock in the broad-based Russell 3000 index has lost more than 30 per cent of its value so far this year, allowing companies that believe their stock is undervalued to purchase more for the same price. Earnings growth is also forecast to slow as groups battle rising inflation and supply chain issues, increasing the appeal of buybacks as a way to flatter earnings.

“The buyback business ironically tends to pick up in periods of volatility because there’s a downdraft and so people who are flush with cash look at their opportunities,” said Craig McCracken, co-head of equity capital markets at Wells Fargo. “It’s a sign of the underlying strength, that companies expect things will continue to be fairly positive so they’re using their cash to buy back shares instead of keeping it on the balance sheet.”

In addition to the increase in authorisations — which can take several years to carry out — companies have publicly announced more than $33bn of so-called accelerated share repurchases, according to analysis of company filings compiled by Sentieo. ASRs allow them to buy back large volumes in a matter of months.

“Accelerated repurchases send a strong signal to shareholders because the cash is committed to buy back the stock upfront,” said Goldman’s Voris.

The total is already almost four times higher than the amount reported in the first quarter of 2021, and is likely to grow further as companies begin reporting their first-quarter results next month.

ZipRecruiter, which went public less than a year ago through a direct listing, said “investing in undervalued equity is an attractive option” as it announced a $50mn ASR last week. The company’s stock has fallen more than a quarter from its peak late last year.

Another recently listed company, fintech lender Upstart, started a $400mn buyback programme just 14 months after its initial public offering.

The surge in buybacks has provided a rare bright spot for investment banks’ equity capital markets businesses, which have suffered a sharp drop in fees due to a slowdown in IPOs and other capital raising activities.