Would Elon Musk actually step down as CEO of Twitter?
Will Twitter’s new boss be the same as the old boss?
Elon Musk has finally spoken about remaining CEO of Twitter after polling users on the matter earlier this week. He says he will step down – a majority of those polled said he should – but whether or not he will step down remains an open question.
And what Mr. Musk ultimately does will resonate beyond Twitter. Investors at Tesla, which he also runs, are increasingly upset by the automaker’s falling share price as he spends more time on social media.
“I will step down as CEO as soon as I find someone stupid enough to do the job!” That was Mr. Musk’s tweet on Tuesday, the day after the poll closed. In a way, that conclusion wasn’t surprising — he’s previously said he doesn’t plan to run Twitter forever (and that he doesn’t like being the CEO of a company), but CNBC reports that Musk was looking for a CEO, before doing the poll.
However, it’s not clear how much power the new boss would have:
Mr. Musk clarified Tuesday that he still plans to oversee Twitter’s software and server teams, which The Verge notes is essentially a big part of the company. That could mean the CEO would end up overseeing the business side of Twitter, including ads and subscriptions.
And Mr Musk will continue to own Twitter, making him the ultimate boss for whoever fills the role.
Mr. Musk also openly questioned the quality of anyone applying for the role. Aside from the “stupid” crack in Tuesday’s tweet, he previously wrote, “Those who want power are those who least deserve it.”
Tesla investors are eagerly awaiting Mr Musk’s next moves. The automaker’s market valuation has fallen below that of ExxonMobil for the first time in two years. Some Tesla shareholders have accused Musk of being too distracted by Twitter to focus on their company’s challenges, including growing competition and weakening demand for his cars. (Musk himself blames macroeconomic issues beyond his control.)
In more Musk news:
His efforts to raise more equity for Twitter — at its original purchase price of $54.20 per share, a level he has described as overvalued — are unlikely to continue to attract interest.
Here’s who Mr. Musk hung out with at the FIFA World Cup Finals in Doha, Qatar, including Jared Kushner and the restaurateur known as Salt Bae.
Police now say they believe a member of Mr Musk’s security team is a suspect, not a victim, in what the billionaire has described as a “crazy stalker.”
Mr. Musk said he’s “spent the last five weeks cutting costs like crazy” on Twitter because the company is on track to grow its cash flow to negative $3 billion.
HERE’S WHAT HAPPENS
House lawmakers reveal IRS failure to scrutinize Donald Trump The House Ways and Means Committee revealed the agency failed to follow its own guidelines for incumbent presidents by not auditing Mr Trump’s finances during his first two years in office. The committee also voted to declassify Mr Trump’s tax returns for six years.
Ukrainian President Volodymyr Zelenskyy visits Washington on Wednesday. On his first trip from his country since the Russian invasion, Mr. Zelensky will meet President Biden at the White House and then address a joint session of Congress. His trip comes as US lawmakers consider sending nearly $50 billion in additional aid to Ukraine’s military.
On Elon Musk’s Twitter
The European Union will intensify its investigation into Broadcom’s deal for VMware. A formal investigation into the $61 billion acquisition has been opened after EU antitrust authorities expressed concerns about reduced competition in computer hardware. This is the latest sign of a tightening regulatory landscape for doing business around the world.
Wells Fargo will pay $3.7 billion to settle consumer bank violations The payout, including $1.7 billion in penalties, will end a Consumer Finance Protection Bureau investigation into a series of alleged errors. It’s the largest fine ever levied by the CFPB, surpassing the $1 billion fine imposed on … Wells Fargo in 2017.
A financier buys control of the Phoenix Suns. United Wholesale Mortgage CEO Mat Ishbia will lead a $4 billion acquisition of the NBA team and Phoenix Mercury from the WNBA after the current owner put the franchises up for sale. Elsewhere, an investment firm backed by hedge fund mogul Jamie Dinan is buying Olympique Lyonnais, a French football club.
Questions about Bankman-Fried’s future swirl on the eve of his return to the United States
Sam Bankman-Fried, founder of bankrupt crypto exchange FTX, is expected to fly back to the United States on Wednesday to face federal charges in Manhattan on charges of defrauding investors out of billions, evading taxes and violating campaign finance rules. when he donated millions to politicians.
Mr Bankman-Fried, 30, is expected to seek a deal with prosecutors before his trial to be released on bail – essentially trading his current stint in Bahamian prison for house arrest.
FTX’s new management wants to reclaim Mr. Bankman-Fried’s political donations in an effort to repay debts. The top 50 creditors alone are owed more than $3 billion after the company posted losses of over $8 billion. (DealBook has previously explained why it will be difficult to recover funds for scammed investors in FTX.)
Bankman-Fried’s legal defense fund has no say in bankruptcy creditors. That’s what former federal prosecutors told DealBook Creditors cannot argue that he or his family are essentially using ill-gotten gains to fight his costly litigation. In a criminal case, only prosecutors can object to statutory payments and only if they believe funds related to the alleged crimes are funding the defense. That’s hard to argue: Judges tend not to rule against the accused on matters involving defense funds, according to legal experts.
Whether Mr. Bankman-Fried can ultimately afford his lawyers is another question. Experts estimate that defending it could cost millions and take years.
Here’s what else is happening in crypto:
Lawyers representing $1.6 billion in claims for FTX creditors have begun calling for preferential treatment in bankruptcy court.
The contagion continues: Core Scientific, a publicly traded crypto miner whose shares have plummeted 98 percent, has filed for bankruptcy protection. It plans to continue mining to repay creditors.
Crypto asset prices are steady this morning, with Bitcoin trading near $16,900, up 0.5 percent over the past 24 hours.
“Everyone was like, ‘Can we really not even afford Christmas lights anymore?'”
— Roland Kosa, who runs a film company in Györ, Hungary, on the unpopular decision to limit festive lighting this season. Hungary and large parts of Europe continue to struggle with rising energy prices following the Russian invasion of Ukraine.
The likely end of negative interest rates is shaking global markets
European stocks and US futures are rallying this morning – but in the bond market it’s a different story altogether. Investors are selling US Treasury bills and German bonds, also known as Bunds, while the yield on the two-year Japanese government bond was just above zero for the second straight day. All of this has prompted some market observers to wave goodbye to the negative interest rate era.
The Bank of Japan sparked a global sell-off in government bonds. At first glance, the BOJ’s decision Tuesday to ease its bond yield policy seemed small. It will allow its Treasury yield to fluctuate 0.5 percent instead of 0.25 percent. But that signaled to the market that Japan’s central bankers would join their global peers in raising interest rates.
The effect: For the first time since 2015, all Japanese government bonds have mostly been above zero in the last 24 hours.
Japan is an outlier among the world’s largest economies. With inflation at 3.6 percent, well below that of its largest trading partners, the short-term interest rate remained at a negative 0.1 percent. In search of a decent return on their investment portfolios, Japanese investors have instead “hoarded their cash abroad,” George Saravelos, head of FX research at Deutsche Bank, said in an investor note this morning.
Saravelos estimates that Japanese investors, who have amassed $100 billion in US dollar-denominated assets in the past 12 months alone, will now shift their focus to buying more Japanese bonds and yen and dumping their overseas holdings.
Elsewhere in the markets:
Shares of Nike rose more than 11 percent in premarket trading after the sportswear giant beat expectations for sales and earnings on Tuesday. The better-than-expected earnings report also boosted shares in rivals Adidas and Puma in European trading on Wednesday.
FedEx rises in premarket trading. The stock is up almost 5 percent after reporting a drop in earnings and announcing it had found another $1 billion in cost savings.
As of 7:00 a.m. EST, S&P 500 futures are up nearly 0.6 percent. The benchmark index posted a tiny gain on Tuesday, ending a four-day dry spell.
READ THE SPEED
A Revision of the Electoral Count Act and Protections for the Lobster Industry: Here’s what’s included in Congress’ $1.7 trillion omnibus spending package. (New York)
Amazon agreed to give EU-based retailers a higher profile on its platform in a bid to settle an antitrust investigation by the European Commission. (New York)
The European Union’s energy regulator doubted the possibility that the bloc’s price cap on gas would reduce energy costs. (FT)
The best of the rest
We want your feedback! Please email thoughts and suggestions to email@example.com.