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Mo News: Twitter Deal or No Deal
Mosheh Oinounou
July 11, 2022
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Hey everyone!
Hope you had a relaxing weekend. Here's today's rundown:
More details emerging about the former Japanese PM's assassination: The shooter, the homemade gun and the motive.
Recession: Are we or aren't we in one? Job growth is strong. GDP's not. This week we'll get more inflation data.
Finally, gas prices are going down!
Elon Musk wants out of his $44 billion dollar offer to buy Twitter. Twitter says not so fast. Where things stand right now.
Wimbledon's a wrap. And the winner is... Prince George?
Why more sharks on Long Island's shores isn't all bad news.
Amazon Prime Day is tomorrow but the deals have already started.
And as always, Good Mood Monday to start the week right (Can you say... free slurpees?!)
Mosh will see you tonight at 9pmET on his regular Mondays with Mosh Instagram Live, where he'll take all your questions.
🎙 We have a new podcast out this morning looking at today's headlines and what we're watching this week. Check it out!
~ Mosh & Jill
🚀 TWITTER DEAL OR NO DEAL?
Elon Musk has pulled out of his $44 billion deal to buy Twitter. Twitter says: not so fast. The company just hired a law firm as it prepares to sue Musk for terminating the deal. ~ Bloomberg
Back Story: In April, Tesla and SpaceX CEO Elon Musk offered to buy Twitter for $44 billion, even though they were not seeking a buyer. At the time, Musk said his goal was to increase the social media giant’s trustworthiness, promote more free speech on the platform, and take the company private. He said it was important for the future of global free speech. The Twitter board, after some debate, accepted Musk's offer.
Trouble in Paradise: In the last 3 months, the buyout has been a rollercoaster of ups and downs. Musk started to claim Twitter is dramatically underreporting the real number of fake accounts, or bots, that exist on the platform. Twitter claims it’s less than 5 percent. Musk thinks it’s closer to 20%, though he has no proof. The disagreement ignited a war of words between Musk and Twitter’s top execs.
It all came to a head on Friday, when Musk officially called off the blockbuster deal. He said it's because Twitter made “false and misleading” statements during negotiations, and failed to provide necessary information to calculate the number of fake accounts.
HMMM: Many critics say Musk was looking for ANY excuse to get out of the deal. Since he first made the offer, Twitter stock has plunged -- as has Tesla's, which means he'd be greatly overpaying for the company, and could have a hard time paying for it. Musk offered to buy Twitter for $54.20 per share; on Friday it closed at $36.81 a share. And his net worth has fallen by $65 billion since he announced he was buying Twitter. In sum: Twitter is now trying to force Musk to follow through on the $44 billion deal even though he said he doesn't want to own the company anymore.
Tweet from Chairman of Twitter Board of Directors, saying they will force Elon to buy the company.
CAN MUSK GET OUT OF THE DEAL?
The jury's still out. Musk signed a legally binding SEC agreement to buy the company, or pay a $1 billion breakup fee if the agreement falls apart -- but it's not that simple.
"A reverse breakup fee paid from a buyer to a target applies when there is an outside reason a deal can’t close, such as regulatory intermediation or third-party financing concerns. A buyer can also walk if there’s fraud, assuming the discovery of incorrect information has a so-called 'material adverse effect.'" ~ CNBC
Most analysts believe Twitter has a much better case here. The Musk filing didn’t provide evidence to back up his assertion that the bot estimate was inaccurate or that it drastically changed the value of the company.“This isn’t even in the ballpark,” said Zohar Goshen, a Columbia Law School professor. He adds that the impact on a company’s value needs to be so dramatic that its value would be halved, for example. ~WSJThe bigger question is what Musk does even if the court rules against him and orders him to buy Twitter for $44 billion. Who can force him to? See Axios chart below.
Chart: Danielle Alberti/Axios
TWITTER UNDER PRESSURE
For Twitter, locking in this deal is vital. They aren't likely to get a better one. Its latest quarterly report warned the company’s finances “may suffer” without it. Sinking stock prices, low investor confidence, and shareholder lawsuits are just some of what could come.
🇯🇵 JAPAN IN MOURNING
Two days after Japan’s former prime minister, Shinzo Abe, was assassinated while campaigning for his Liberal Democratic Party, voters headed to the polls and overwhelmingly elected his allies and reaffirmed his party's vision for the future. ~ NY Times
His party has enough seats to amend a clause in the Constitution-- imposed by Americans after WWII-- that renounces war. This would now allow Japan to become a military power after nearly 80 years of official pacifism. (They are concerned about North Korea and China).
Assassination Latest: Japan’s former prime minister, Shinzo Abe, was shot and killed in broad daylight Friday as he was giving a campaign speech. Abe, 67, was rushed to the hospital, where he was pronounced dead just hours later.
Photo of the homemade gun via Asahi Shimbun newspaper.
The Assassin: Police arrested 41-year-old Tetsuya Yamagami at the scene for attempted murder. Yamagami later confessed he killed the former prime minister.. The gunman used a clunky, homemade gun to fire off two gunshots aimed at Abe, less than a minute into his speech. Security officials immediately tackled him.The Motive: According to Japanese newspaper Mainchi, the suspect told investigators his family fell apart over his mother’s obsession with a religious group that Abe had allegedly promoted (though we don't have many details there). He said her obsession lead to their bankruptcy - so he targeted Abe “out of resentment.”
The top law enforcement official in Nara, where the former Prime Minister was assassinated, acknowledged security lapses at the political rally where Abe was killed, and pledged to identify and resolve those flaws.
Japan's Gun Laws: The world was left stunned, given the fact that Japan’s gun restrictions are tight and shootings are extremely rare. Homicide rates in Japan are among the lowest in the world. The suspect was all-but-forced to make his own gun, because obtaining a firearm in Japan is that difficult of a process - a stark contrast to those of the U.S., where you can be a gun owner in less than an hour in some states.
Remembering Abe: Prime Minister Abe prioritized Japan's strong relationship with America. In 2015, be came the first Japanese leader to address a joint session of congress. He’s hosted President Obama at Hiroshima, the site of the 1945 atomic bombing, and developed a friendship with President Trump - both on and off the golf course.
💰 U.S. ECONOMY: HUGE STATUS UPDATES AHEAD
This will be another big week when it comes to the economy. Inflation data comes out on Wednesday, expected to be another big number -- some analysts say it could be even larger than the 8.6% year-over-year pace we saw in June. What does that mean? What we already know -- that it's costing A LOT more money to buy pretty much anything. ~ CNBC
We will also get new American consumer sentiment data and June retail sales numbers on Friday. That will be key to helping the Fed understand if the economy is slowing down fast enough or too slowly.
One piece of good news -- gas prices are finally falling. The national average is now $4.68 a gallon, down from $4.99 one month ago. ~ AAA
And job growth is still really strong. The U.S. economy added more jobs than anticipated last month - easing some fears that the country could be on the cusp of a recession. Employers added 372,000 jobs in June, and the unemployment rate held steady at 3.6% for the fourth-straight month. Education and health services saw the biggest jump, with 96,000 new jobs.Average hourly earnings, or wages, rose 5.1% in June, but it's not enough to keep up with inflation (8.6%). It's left many Americans feeling like they’ve taken a pay cut - which is why inflation is understandably at the tip top of Americans' lists of concerns.
Recession Fears: Despite the strong job growth, we're seeing some signs of an upcoming recession. Consumer spending dropped in May for the first time this year. Home sales are down are 9% from a year ago. Inflation is sitting near 40-year highs. The Federal Reserve is aggressively raising interest rates in an attempt to lower record-high inflation - but some warn that could eventually cause a recession.
🇱🇰SRI LANKA CRISIS
Protesters demanding the resignation of Sri Lanka's President swim in a pool inside his Presidential Palace in Colombo on Saturday after overcoming security and invading the complex. (Photo by AFP via Getty Images)
Sri Lankan President President Gotabaya Rajapaksa, as well as his hand-picked prime minister, have both agreed to resign after tens of thousands of demonstrators stormed the president's residence to protest a crippling economic crisis.
Sri Lanka is an island nation of about 22 million, located just off the coast of India, whose economy has completely collapsed.
What's behind the protests? There are a variety of factors, including complete mismanagement by President Rajapaksa and his family–who have effectively controlled the country for nearly 20 years. The country has gone bankrupt, which means essential imports of fuel, food and medicine have been cut in recent months. This shortage has pushed the island into its worst financial situation in 70 years. ~ReutersAmong the issues: taking on too much debt with loans from China and other countries for vanity projects, excessive tax cuts, mismanagement of agriculture and farm policy, lost tourism due to COVID, and finally increased fuel and food costs due to the war in Ukraine. @mosheh Instagram highlights went into further depth on Sri Lanka.
What's next: Other counties are dealing with similar issues, like Kenya, Ethiopia, and Somalia-- where one person is dying of hunger every 48 seconds. We could see similar protests as part of the domino effect of the war in Ukraine. ~Washington Post
🗞 THE SPEED READ
Steve Bannon told the House select committee investigating the January 6th insurrection that's he's now willing to testify, ideally at a public hearing, according to a letter obtained by CNN. Bannon's reversal comes after he received a letter from former President Trump waiving executive privilege.
Former New Mexico Gov. Bill Richardson is planning to travel to Russia in the near future for talks aimed at finding a deal to free the detained WNBA star Brittney Griner and former US Marine Paul Whelan, a source with knowledge of the proposed trip told ABC News. Richardson previously played a role in achieving an April prisoner exchange that saw Russia release former U.S. Marine Trevor Reed.
President Biden heads to the Middle East this week on his first visit as American head of state. He'll find a region where alliances, priorities and relations with the United States have shifted significantly since his last official trip, six years ago. His visit opens in Israel and the West Bank and ends in Saudi Arabia.
Joe Biden Opinion Piece: Why I’m going to Saudi Arabia (Washington Post)"I know that there are many who disagree with my decision to travel to Saudi Arabia. My views on human rights are clear and long-standing, and fundamental freedoms are always on the agenda when I travel abroad, as they will be during this trip, just as they will be in Israel and the West Bank," he writes.
Facing mounting pressure to be more forceful, President Biden signed an executive order on Friday to protect some abortion rights - but acknowledged Congress has the ultimate power. His order aims at protecting access to medical abortions and launching public education efforts, among other things. But abortion rights protesters still gathered outside the White House on Saturday, calling on President Biden to do more.
In the wake of the Highland Park parade shooting, the newly-formed group "March Fourth" plan to travel to the nation's capital on Wednesday where they'll rally for gun reform. The organizer says: "We just want one thing. We want to ban assault weapons."
Long Island has a new relationship with sharks, made clear by two attacks and one possible bite in about a week, experts said. The area averaged about one such shark attack every 10 years for a century. Why the increase? Experts say conservation efforts have helped clean up the local waters, drawing more sharks and allowing those here to thrive. Plus the warming of the oceans has drawn sharks to more northern locations.
Novak Djokovic took home Wimbledon’s men’s singles title in an enthralling four-set victory yesterday over Nick Kyrgios. It’s Djokovic’s fourth Wimbledon championship win in a row. Djokovic now has 21 major titles, one behind Nadal, who had to pull out of Wimbledon because of an injury. But don't look for him to tie the record at the US Open next month. Djokovic isn't vaccinated, so he's not eligible to play.
Elena Rybakina was crowned the 2022 Wimbledon's women's singles champion on Saturday, claiming her first grand slam title, and the first for Kazakhstan. 23-year-old Rybakina beat world Number 3 from Tunisia, Ons Jabeur, in three sets, making a comeback to win 3-6, 6-2, 6-2 on Center Court.Prince George made his Wimbledon debut… and even got his hands on the legendary trophy!
☀️ GOOD MOOD MONDAY
Tomorrow is Amazon Prime Day, but the sales have already started. And today is National 7/11 Day! Here's how to get your free slurpee.
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