The consequences of Musk’s offensive attack on advertisers are not over

The consequences of Musk’s offensive attack on advertisers are not over

Thursday was supposed to be a big day for Tesla and its investors, as the electric vehicle maker finally began delivering its much-hyped Cybertruck pickup truck — its first new model in more than three years — to customers.

Instead, Tesla shares fell nearly 2 percent. Part of this loss may be due to disappointing news regarding the Cybertruck prices and availability. But some may also reflect renewed concern about Elon Musk’s latest comments, made at the DealBook Summit this week, and whether his self-inflicted damage to X is distracting from his other activities .

Advertisers are not impressed by Musk’s recent tirade. On Wednesday, he claimed brands were trying to “blackmail” him by suspending their advertising after he endorsed an anti-Semitic conspiracy theory about ‘use an expletive for emphasis.

At least half a dozen marketing agencies said their clients would keep their advertising campaigns off the site, while others had begun advising their clients to opt out as well. “There is no advertising value that would offset the reputational risk of returning to the platform,” Lou Paskalis, founder and CEO of AJL Advisory, a marketing consultancy, told the Times.

This has renewed concerns about the fate of which could lose as much as $75 million in advertising sales – its main source of revenue – by the end of the year amid such controversies. Increased tension only makes life more difficult for Linda Yaccarino, CEO of X, as she attempts to revive the company’s ailing finances. (That said, in an internal note On Thursday, she praised Musk’s comments as “frank and profound” and urged employees to “not get distracted by fringe critiques that don’t understand our mission.” “)

Musk’s crude remarks indicate he is willing to let X die because of an ad boycott, in what he suggested was martyrdom in the name of free speech. He suggested that X could potentially make money by licensing technology companies to train artificial intelligence models. But it’s a risky bet and we don’t know exactly how much money it would raise.

Certain shareholders of private company billionaire financier Bill Ackman, might not be perturbed by Musk’s comments. But other stakeholders — including banks that still hold billions in debt tied to the company’s $44 billion buyout — are likely feeling less optimistic.

Musk’s latest antics could be a distraction from his other activities. The White House has previously criticized the billionaire for his anti-Semitism outcry. The federal government is a major customer of SpaceX, Elon Musk’s rocket company. And Tesla shareholders had denounced Musk over this previous incident: a prominent investor, Ross Gerber, denounced the tycoon’s attitude last month. “scandalous” behavior and “the damage it caused to the brand”.

The duration of this damage remains uncertain. The US government still relies heavily on SpaceX and its Starlink satellite internet service. And Gerber, who has previously said he hasn’t sold his Tesla shares, didn’t weigh in on Musk’s advertisers’ comments. Instead, Gerber touted the features of the Cybertruck.

An Emirati fund partners with Wall Street giants to invest in the climate. Lunate Capital, a fund with $50 billion in assets controlled by the Abu Dhabi royal family, is expected to announce a partnership with BlackRock, Brookfield Asset Management and TPG to invest in green projects. Along the same lines, the world’s richest countries agreed at the COP28 climate summit in Dubai to create a new disaster relief fund for the poorest and most vulnerable countries.

OPEC Plus countries announce further cuts in oil production. The cartel said it would cut production by about 700,000 barrels, or 1 percent of global production, per day in an effort to prop up falling oil prices, prompting a rebuke from the White House . Still, the price of Brent crude is falling this morning as investors remain concerned about slowing global demand.

Fighting has resumed in Gaza. A week-long ceasefire ended Friday after Israel, citing rocket fire from Gaza, resumed strikes on the territory even as international mediators worked to restore the truce. At the same time, the Times reported that Israeli military and intelligence officials had obtained a battle plan for the Oct. 7 Hamas attack more than a year in advance.

Meta would bring its Threads app to the EU The tech giant is expected to introduce the app, its rival to social network The Wall Street Journal reports, in the biggest expansion of the service since Threads launched in July. In other social media news, a Montana judge temporarily overturned a statewide ban on TikTok.

Disney CEO Bob Iger said this week at the DealBook Summit that his media giant has made too many movie sequels. But his business is now consolidated into the equivalent of a corporation.

Financier Nelson Peltz, who runs the activist investment firm Trian, officially announced a fight for representation on Disney’s board of directors, nearly a year after ending a similar battle. The question is how this effort will attract investors.

Peltz targeted Disney’s stock performance, noting that the company had lost about $70 billion in market value since he abandoned his previous efforts to win a board seat. He added that the arrival of two new directors – James Gorman, outgoing CEO of Morgan Stanley, and Jeremy Darroch, former boss of British media company Sky – had improved Disney’s corporate governance, but not enough.

Unsaid: the specific actions Peltz wants Disney to take. (CEO succession is an issue Peltz has raised before; in appointing Gorman as a director, Disney highlighted how he received praise for his handling of the issue at Morgan Stanley.)

Disney defended its performance, declaring Thursday that he was on track to save approximately $7.5 billion in costs, more than initially expected. And at the DealBook Summit, Iger said he’s faced unexpected challenges, “some brought on by decisions made by my predecessor, others that are simply the result of enormous disruption in the world and in our profession. »

Disney also criticized Peltz’s partnership with Ike Perlmutter, the former chairman of Marvel Entertainment who is one of the company’s largest individual shareholders.

The company noted that shares owned by Perlmutter, who was fired this spring after years of conflicts with other Disney executives, represented 78 percent of the shares Peltz says he controls. Perlmutter’s “long-standing personal agenda” against Iger has raised questions about Peltz’s campaign, since that motivation “may be different from that of any other shareholders,” Disney said.

At least one Disney investor appears concerned about Peltz’s campaign. Capital of Blackwells said he was “concerned that Trian’s campaign prioritizes Mr. Peltz’s ego over what is best for all Disney shareholders, and that his latest effort could cost to Disney shareholders more than $50 million. (The size of Blackwells’ stake is unclear.)

Gavin Newsom, the Democratic governor of California, during a Fox News debate with the governor. Ron DeSantis from Florida last night. Newsom dropped the zinger suggesting DeSantis would inevitably drop out of the race for the Republican presidential nomination because he was so far behind Donald Trump in the polls.

Global stocks look set to extend their winning streak on Friday, with European markets in the green and Dow Jones Industrial Average futures pointing to a positive open.

And debt markets’ rally continues after U.S. bonds hit their best monthly performance since 1985, according to Deutsche Bank, a sign that investors are increasingly hopeful that interest rates have peaked.

Investors had a good month in November. The S&P 500 ended a three-month losing streak, gaining 8.9%, its best monthly gain. since the pandemic rebound of 2020. Fears of a wider war in the Middle East have eased, pushing crude prices lower, while a raft of inflation data from both sides of the Atlantic shows prices are moderating .

Inflation advocates received more good news Thursday when the report on personal consumption expenditures, a measure of inflation closely watched by the Fed, showed a slowdown in price increases.

Market watchers are betting that central banks are done raising rates. Some even now see the fed Cut its preferential rate during its May political meeting. With borrowing costs expected to fall, investors have turned to risky assets. The Nasdaq 100, a collection of big tech stocks, rose about 11% last month.

Not everything is rosy. Many economists are worried slower global growth next year. And JPMorgan Chase analysts see a multitude of risksincluding political uncertainties – dozens of national elections will take place around the world next year, including the race for the White House – which could send stocks lower over the next 13 months.

Can the gathering last? A major test could come later Friday, when Jay Powell, the Fed chairman, delivers a speech that could reveal his concerns about the latest surge in asset prices.

“The market moves have been so large since I suggested that tight financial conditions were doing part of the Fed’s work in their favor (November 1) that one has to think he will address subsequent moves and push them back or approve them,” Jim Reid, a Deutsche Bank strategist, wrote to investors this morning.



The best of the rest

  • A new report from UBS reveals that the new billionaires gained their status this year. by inheritance instead of creating wealth. (UBS)

  • Alistair darling, who as Britain’s finance minister during the 2008 financial crisis oversaw the rescue of Britain’s banking system, died Thursday. He was 70 years old. (FT)

  • Bloomberg Businessweek takes place monthly. (NYT)

  • “A Harvard Professor Prepares to Teach a New Subject: Taylor Swift” (NYT)

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David B.Otero

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