The social network’s new owner wants to cut costs and make money from more aspects of tweeting. But some advertisers and celebrities remain cautious.
- 1 Moving fast and breaking things
- 2 Elon Musk’s Acquisition of Twitter
- 3 Hong Kong tries to reopen for business
- 4 Businesses make the case for college diversity
- 5 “You can’t keep doing what you were doing last year and hoping for the same results. The market has changed. Everything has changed completely.”
- 6 The week ahead
Moving fast and breaking things
Just days after taking the reins at Twitter, Elon Musk appears set to be in an all-out sprint to wring savings out of the company to ensure the math works on his $44 billion purchase. If that move-fast approach means antagonizing Twitter employees or alienating advertisers and celebrity users, so be it. (Musk also isn’t letting up on his typically unpredictable and sometimes seemingly petty behavior. He rehashed an old grievance, saying Twitter’s board “deliberately” hid user metrics, and then cryptically promised, “more to come.”)
In the meantime, he is surrounding himself with friends and allies: Those spotted in the office include Alex Spiro, Musk’s personal lawyer; the investors David Sacks and Jason Calacanis; and engineers from Tesla and the Boring Company.
Musk is already weighing one big change: making users pay to remain verified on the service, Platformer reports. Under the plan reportedly being considered, users would have to subscribe to Twitter Blue, which is expected to eventually cost $19.99 a month, or lose their coveted blue check mark badges. (Employees working on the project are said to face a Nov. 7 deadline or risk being fired, according to The Verge.) “The whole verification process is being revamped right now,” Musk tweeted.
Advertisers remain wary of Musk’s plans. General Motors and Ford, both rivals to Tesla, said they are pausing ads on the platform. But other companies have also temporarily halted advertising to see what will happen — and what’s happened recently may not be reassuring:
On Sunday, Musk tweeted, then deleted baseless allegations about the recent attack on the husband of House Speaker Nancy Pelosi.
The N.B.A. star LeBron James highlighted a report showing that use of a racial slur on Twitter had increased within the first 12 hours of the Musk era by nearly 500 percent. “I don’t know Elon Musk and, tbh, I could care less who owns twitter. But I will say that if this is true, I hope he and his people take this very seriously because this is scary,” James tweeted. (Musk responded by retweeting a Twitter executive who had said that nearly all those instances appear “inauthentic,” and that the company has “taken action to ban the users involved in this trolling campaign.”)
Some celebrities, including the star TV producer Shonda Rhimes, signaled that they planned to delete their accounts—or take a break from the platform.
Meanwhile, Musk is focused on slashing costs. He has ordered cuts across the company, and — as DealBook reported on Friday — employees are worried they may be laid off before tomorrow, when they are scheduled to receive stock grants as part of their compensation.
He’s also challenging big golden parachutes. The four executives whom Musk fired shortly after taking over Twitter had been owed millions under the merger agreement; Parag Agrawal, the former C.E.O., had been set to receive up to $60 million alone. But Musk fired them “for cause” — though his justification remains unclear.
That could void the payout agreement, but those executives will surely contest the move. They are “deliberating their next steps,” The Times reports.
HERE’S WHAT’S HAPPENING
Lula defeats Jair Bolsonaro in Brazil’s presidential runoff. The leftist former president, Luiz Inacio de Lula da Silva, prevailed over the far-right incumbent in an election marred by rampant disinformation. But many worry Bolsonaro won’t accept defeat, having complained without merit of widespread election fraud.
Wheat prices soar after Russia suspends a Ukraine grain export deal. The price of wheat futures briefly jumped over 7 percent on Monday, after Russia said it would temporarily pull out of a pact allowing the passage of wheat and other grains from Ukraine. For now, ships are still sailing from Ukrainian ports, as United Nations and Turkish officials try to save the deal.
Workers flee the world’s biggest iPhone plant in China to escape a Covid lockdown. Video footage posted online purportedly showed Foxconn employees jumping the fence surrounding the Zhengzhou factory, after an unknown number of Covid cases were reported there. It was one of the most dramatic acts of rebellion yet against China’s zero-Covid policies.
Elon Musk’s Acquisition of Twitter
A blockbuster deal. In April, Elon Musk made an unsolicited bid worth $44 billion for the social media platform, saying he wanted to turn Twitter into a private company and allow people to speak more freely on the service. Here’s how the monthslong battle that followed played out:
Tesla had reportedly weighed buying a stake in a major miner of battery materials. The electric carmaker had been in talks for up to a 20 percent stake in Glencore, which produces cobalt and nickel, according to The Financial Times. The talks have since cooled, in part because Tesla was unsure of whether Glencore’s coal mining was compatible with its environmental goals.
Hong Kong tries to reopen for business
Hong Kong wants to show the world it’s still a global financial center. After its status was pummeled by a political crackdown and crippling Covid-19 restrictions, the city is hosting a summit with leading bankers this week, The Times’s Alexandra Stevenson reports for DealBook. David Solomon of Goldman Sachs, James Gorman of Morgan Stanley and Rob Kapito of BlackRock top the speaker list, bringing some shine back to Hong Kong’s tarnished reputation.
A successful summit is critical for the city. An exodus of professionals has shrunk the labor force to a decade low; its economy is heading for a recession; and its stock market is having its worst year since 2009 as it faces a drought of new listings.
But C.E.O.s keep dropping out. Jon Gray, the chief operating officer at Blackstone, is the latest to pull out after testing positive for Covid; the firm’s C.F.O., Michael Chae, will go instead. C.S. Venkatakrishnan, the Barclays C.E.O., canceled his plans to travel to Asia, the bank said, and Jane Fraser, Citigroup’s C.E.O., said she wouldn’t go after contracting Covid last week.
Even Paul Chan, Hong Kong’s finance secretary, looks set to miss out after testing positive during a trip to Saudi Arabia. He said he would return to Hong Kong “at the earliest opportunity,” though an in-person summit appearance seems unlikely.
The city has gone out of its way to lure top executives, who balked at the country’s severe pandemic restrictions. Attendees will be able to dine in private rooms at certain venues, despite rules that bar overseas visitors from restaurants for their first three days in Hong Kong. If anyone tests positive for Covid, they can skip mandatory quarantine as long as they leave on a private jet.
Attendees face criticism. Some U.S. lawmakers and pro-democracy campaign groups have slammed the event as legitimizing Hong Kong’s repression of free speech, and called on U.S. banks to boycott the conference.
The backlash demonstrates that whoever attends, Hong Kong will continue to be stuck in the middle of rising U.S.-Chinese tensions.
Businesses make the case for college diversity
On Monday, the Supreme Court will hear oral arguments in two cases about college admission policies that businesses are watching closely — because they could reshape the employment landscape. The question is whether schools can consider race as a factor in admissions to foster a diverse learning environment.
Nearly 70 major companies in tech, finance, health care and other sectors joined a brief to the court, saying they have a “significant interest” in the cases because “promoting student-body diversity on university campuses remains compelling from a business perspective.”
Meta, Google, Apple, United Airlines and Walgreens joined the plea for diversity. The companies did not take a direct stance on the cases — brought by a conservative activist group against Harvard and the University of North Carolina — but did address the general principles at stake. Businesses need employees “with exposure to a broad array of life experiences and viewpoints, and who can bring diverse perspectives and experiences to the workplace” the firms wrote, and if colleges become less diverse, businesses, consumers and the economy will be hurt, the companies contend.
A similar case is playing out in the business world. The man behind the fight to end race-conscious admission policies at colleges is also fighting the S.E.C. over its approval of board diversity disclosure rules introduced by Nasdaq. Edward Blum, a conservative activist and former stockbroker, last year launched the Alliance for Fair Board Recruitment, which aims “to promote the recruitment of corporate board members without regard to race, ethnicity, sex and sexual identity.” A three-judge panel heard oral arguments in an appeal on the director diversity case last month. Decisions on the college admissions cases are expected during the Supreme Court term, which ends in June.
“You can’t keep doing what you were doing last year and hoping for the same results. The market has changed. Everything has changed completely.”
— Vieje Piauwasdy, a director at Secfi Securities, a San Francisco firm that provides start-up employees equity planning. He joins a growing chorus that believes tech start-ups face a harsh new economic reality.
The week ahead
Three major central banks announce rate decisions this week. Plus, we get the final jobs report before the midterm elections, and there’s more corporate earnings.
Tuesday: New York City’s pay transparency law goes into effect. Similar laws requiring employers to include salary ranges in job postings have been enacted in California, Colorado and Washington State. Elsewhere: The U.S. government releases the September “JOLTS” data on job openings. The Reserve Bank of Australia announces its rate decision, and earnings are expected from Saudi Aramco, Eli Lilly, Pfizer and Advanced Micro Devices.
Wednesday: It’s rate decision day for the Fed. The central bank is likely to raise rates by 75 basis points, which would be the fourth consecutive increase of that size. CVS, Qualcomm and Robinhood report.
Thursday: Investors expect the Bank of England to raise rates by 75 basis points, which would be the largest increase in more than 30 years. Britain’s new prime minister, Rishi Sunak, delayed announcing his highly anticipated fiscal plan until Nov. 17. Elsewhere: Netflix begins offering a cheaper ad-supported subscription.
Friday: The U.S. government reports jobs data. Employers are expected to have added about 200,000 jobs in October, continuing a gradual slowdown that began in August. Duke Energy, Dominion Energy and DraftKings report.
THE SPEED READ
With Elon Musk’s takeover of Twitter complete, arbitrage investors have billions available to bet on the outcomes of other mergers. (Bloomberg)
Credit Suisse has reportedly asked at least 20 banks to help it raise $4 billion in a rights offering to finance its restructuring plans. (Bloomberg)
Blackstone agreed to buy a majority stake in Emerson Electric’s climate technologies arm for $14 billion. (WSJ)
House Republicans vow to investigate China and the spread of Covid if they take control of the chamber in the November midterms. (Bloomberg)
Inflation in the eurozone has hit a record high, reaching 10.7 percent this month. (CNBC)
The Treasury Department named Douglas O’Donnell as the I.R.S.’s acting commissioner, but delays in picking a permanent leader could hamstring plans to revamp the tax agency. (NYT)
“The Mystery of America’s Millions of Missing Oil Barrels” (Bloomberg Opinion)
Best of the rest
Banks in the S&P 500 have shed women directors, despite pressure to diversify their boards. (Bloomberg)
Retailers like Gap and Foot Locker have pulled Yeezy products from shelves, but the online luxury seller Farfetch so far hasn’t. (Insider)
The elite London law firm Slaughter & May said employees could restrict how often they check emails over the weekend — unless work demands otherwise. (FT)
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