Why Elon Musk went to China
Elon Musk descended on China's capital just days after Secretary of State Antony Blinken visited Beijing and warned China about unfair trade practices. The meeting between Tesla's president and China's second-largest official may have been successful. Musk has reportedly cleared two hurdles to introducing fully autonomous driving systems to the world's largest car market.
Split screen once again reveals the gap between Western diplomacy and corporate imperatives.tesla have Continuing to serve China in the face of significant headwinds is a challenge that other multinationals also face, and one that Beijing hopes to exploit.
Musk is betting big on self-driving cars, and China is key. Tesla last week reported its worst quarter in two years as price competition weighed on profits. Tesla shares have fallen sharply on the back of massive layoff plans (though they have rebounded in recent days and are up more than 8% in pre-market trading).
Mr. Musk has sought to reassure the market by promoting a low-cost model. Fully automated driving is also important. Musk told analysts last week that if investors don't believe Tesla will “solve” the technological challenge of autonomous driving, “I don't think they should be investors in Tesla.”
The automaker faces challenges in its second-largest market. Heavily subsidized Chinese rivals are eating into sales, including Warren Buffett-backed BYD, which is vying with Tesla to be the world's biggest EV maker.
Tesla has been banned from many Chinese government sites due to concerns about what kind of data the US company is collecting. President Biden's declaration of Chinese EVs as a national security threat probably didn't make it any easier for Tesla in China.
But Musk appears to have received some good news. The Chinese government has indicated that Tesla may roll out its self-driving system after passing data security tests. The company will reportedly partner with Chinese tech company Baidu to supply mapping and navigation software for cars.
(It also suggests that, despite speculation, targeting Tesla in retaliation for a possible US ban on TikTok is not coming to fruition.)
Musk's visit will also be a boost for China. The Chinese government used this to demonstrate that it still has influence over foreign companies that rely on the Chinese market. Musk's meeting with Chinese Prime Minister Li Qiang was widely reported in state media (and Musk's X) as an example of Western companies playing by the Chinese government's rules.
Tesla isn't the only company bending over backwards to stay in China. Many foreign automakers are doubling their numbers. Volkswagen is competing with Chinese AI chip designer Horizon Robotics and Chinese EV rivals, even though non-German competitors say they need EU protection from cheap Chinese imports. It has invested in companies such as Xpeng.
Of course, Musk has proven his doubters wrong time and time again. But he and his foreign rivals may have little choice.
what's happening here
Antony Blinken talks with Arab leaders about the Israel-Gaza war. The secretary of state has been meeting with officials in Riyadh, including Saudi Arabia's foreign minister, Prince Faisal bin Farhan, on issues such as Israeli hostages and the path to a Palestinian state. Meanwhile, the nonprofit organization World Central Kitchen announced it would resume operations in the Gaza Strip, nearly a month after a targeted Israeli military attack killed seven of its employees there.
Philips' stock price soared after a lower-than-expected sleep apnea settlement. The Dutch company's shares soared 45% on Monday after it set aside about 982 million euros ($1 billion) to cover costs related to U.S. claims for defective sleep apnea devices. .
Taylor Swift's latest album breaks records. “The Tortured Poets Department” sold 2.61 million albums in its first week, equating to 891 million streams, making it the biggest streaming week ever for an album and topping the Billboard 200 chart. debuted in. Swift is currently tied with Jay-Z for the most No. 1 albums by a solo artist, although there are concerns that the market is oversaturated.
What the big changes mean for Paramount's deal talks
Paramount's chaotic corporate saga is about to take a dramatic new turn. The media giant is expected to announce CEO Bob Bakish's resignation as soon as Monday, despite Shari Redstone's bid to sell control.
Skydance, director David Ellison's film studio that is in exclusive negotiations with Paramount, the company behind the Top Gun series and television properties including CBS and Nickelodeon, submitted the revised proposal.
Dealbook's Lauren Hirsch writes that it is unusual for a top executive to step down in the midst of negotiations, and could affect future developments.
New focus on special committees overseeing transactions. The Skydance deal could allow Mr. Redstone, who controls Paramount through his holding company National Amusements, to personally reap a substantial premium, including more than $2 billion in cash.
This could prompt further legal scrutiny of the deal, which has already drawn criticism from several large investors. Investors are pushing Paramount to consider an all-cash approach from private equity giant Apollo, which it had previously rejected.
A break with Bakish could further heighten tensions. “We're in special committee land. So from a legal perspective, we're in church,” says veteran M&A expert Jim Woolley. the lawyer and banker, who has advised numerous special committees on transactions, told DealBook. “This is un-church and sloppy. This creates additional risks.”
Bakish's departure could weaken Paramount's hand. Bakish will not be replaced by a CEO, but multiple executives will run the CEO's office.The focus will also be on the financial strength of Paramount, which has secured the company's all-important cable deal with Charter. The company is scheduled to report earnings on Monday amid questions about its status. Investors are looking for progress on its streaming ambitions.
The company is preparing for all eventualities, including no deal. The Wall Street Journal reported that the company has developed a contingency plan to maintain its independence.
THis clock is ticking. Skydance's exclusive negotiation period is scheduled to end on Friday (though it may be extended). And given the potential partnership with Sony, which would bring in additional funding and operational expertise, Apollo's hand appears to be considerably stronger than when it last approached Paramount about a deal.
But Apollo and Sony's push could face tough questions from shareholders and even the board of directors. And how will they address anticipated regulatory risks?
Betting on green in sports
Investors are eager to get their hands on live sports coverage, from team stakes to media rights.
Bruin Capital, the sports-focused private equity firm run by former NASCAR chief operating officer George Pyne, is taking a new approach by acquiring an expert in growing and maintaining stadium natural turf. The deal was first reported by Dealbook.
Bruins acquire PlayGreen. Owner of SGL based in the Netherlands. We provide technology such as lighting and monitoring tools to grow natural grass. The deal values PlayGreen at about $120 million, according to DealBook.
SGL was founded in 1997 to focus on sports. In 2004, he signed his first major contract with English Premier League football club Arsenal. After that, he expanded to include the NFL, professional tennis (Wimbledon), cricket, and horse racing, all while weathering the trend toward artificial turf.
SGL is affiliated with approximately 520 stadiums, from the Green Bay Packers' Lambeau Field in Wisconsin to Kingdom Arena in Riyadh, Saudi Arabia. “We've proven that we can grow grass in any situation,” SGL CEO Mark Trubenbacher told DealBook.
Investing involves betting on several things, Pine said:
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Player Safety: Given the prevalence of injuries such as anterior cruciate ligament tears in football and soccer, highly paid athletes need to be protected. “The surface you play on impacts the quality and safety of the game,” Pine said. (Trubenbacher added that interest in SGL increased after Aaron Rodgers suffered a season-ending injury in September.)
There is also an artificial intelligence perspective. With all the data SGL's systems collect, Trubenbacher said his company will eventually deploy AI to help automate lawn management.
“We know exactly when we reach ideal daylight hours,” he said. “In the future, we will be able to know when to turn off the lights. Previously, we would set them on a timer.”
“Most of what he has learned about AI comes from working with me over the years.”
— Demis Hassabis, about his childhood friend, former colleague and current rival Mustafa Suleiman from Microsoft. The two grew up in London and co-founded DeepMind, an artificial intelligence research lab (acquired by Google) where Hassabis is CEO. These two are among the most influential figures in the AI field, and their companies are in a high-stakes race to dominate the world. sector.
next week
The Fed, employment, and a busy earnings calendar — here's what to watch.
Tuesday: Amazon, AMD, Samsung, Eli Lilly, Volkswagen, Starbucks, and McDonald's are scheduled to announce their financial results. Investors will also be watching the latest euro zone inflation figures for clues that the European Central Bank may start cutting interest rates in June.
Wednesday: It's the Fed's decision date. Economists expect the central bank to keep borrowing costs at multi-decade highs through the fall. On the revenue side, KKR, Mastercard, Pfizer and Devon Energy are expected to report.
Thursday: Apple, Ozempic maker Novo Nordisk, Shell, Apollo, Live Nation and Maersk report quarterly results.
Friday: It's a work day. Economists polled by Bloomberg expect employers added about 250,000 jobs in April, down from March but slow enough to keep the unemployment rate at a relatively robust 3.8%. That was enough.
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Some marketers blame Meta's AI-powered advertising tools for eating up their budgets and forcing them off the tech giant's platform. (The Verge)
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CalStars, a major California public pension fund, reportedly miscalculated the carbon footprint of its $331 billion investment portfolio, forcing it to postpone publication of its latest climate report. (FT)
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“Mid-TV Comfort Problem” (NYT)
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