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The fallout from Musk’s profanity-laden attack on advertisers is not over yet

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

Instead, Tesla shares fell nearly 2 percent. Some of that loss may be due to disappointing news about the Cybertruck pricing 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 at X is distracting from his other activities.

Advertisers are unimpressed by Musk’s recent rant. On Wednesday, he claimed brands were trying to “blackmail” him by suspending their advertising after he endorsed an anti-Semitic conspiracy theory about X. “Don’t advertise,” he said, before using an expletive for emphasis.

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

That has renewed concerns about X’s fate. which could lose up to $75 million in ad sales – its main source of revenue – by the end of the year due to such controversies. The increased tension only adds life harder for Linda Yaccarino, the CEO of X, as she attempts to revive the company’s embattled finances. (That said, in an internal memo On Thursday, she praised Musk’s comments as “candid and profound” and urged employees “not to be distracted by side critics who don’t understand our mission.”)

Musk’s crude comments indicate he is willing to let X die due to an advertiser boycott, in what he suggested is martyrdom in the name of freedom of speech. He did hint that X could eventually make money by licensing his wealth of content to tech companies to train artificial intelligence models. But that’s a risky bet and it’s unclear how much money it would generate.

Some shareholders in private X, including the billionaire financier Bill Ackman, may not be impressed by Musk’s comments. But other stakeholders — including banks that still owe billions in debt tied to his $44 billion takeover of the company — are likely feeling less optimistic.

Musk’s latest antics could be a distraction from his other activities. The White House has already criticized the billionaire for anti-Semitism. The federal government is a major customer of SpaceX, Musk’s rocket company. And Tesla shareholders had reprimanded Musk over that earlier incident: A prominent investor, Ross Gerber, denounced the mogul’s plans last month. “scandalous” behavior and “the damage he has done to the brand.”

It remains unclear how permanent that damage will be. The US government is still heavily dependent on SpaceX and its Starlink satellite internet service. And Gerber, who has already said he has not sold his Tesla shares, has not responded to Musk’s comments about his advertisers. Instead, Gerber praised the features of the Cybertruck.

An Emirati fund is working with Wall Street giants on climate investments. Lunate Capital, a fund with $50 billion in assets controlled by Abu Dhabi’s royal family, is expected to announce a partnership with BlackRock, Brookfield Asset Management and TPG to invest in green projects. In related news, the world’s richest countries agreed to a new disaster fund for poorer, vulnerable countries at the COP28 climate summit in Dubai.

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

The fighting in Gaza has resumed. A weeklong ceasefire ended Friday after Israel, citing rocket fire from Gaza, resumed attacks on the territory as international mediators worked to revive the truce. Meanwhile, The Times reports that Israeli military and intelligence officials obtained a battle plan for Hamas’ October 7 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 X, as early as this month. The Wall Street Journal reports this, in the service’s largest expansion since Threads debuted in July. In other social media news, a Montana judge has temporarily lifted a state-wide ban on TikTok.

Disney’s CEO Bob Iger said at the DealBook Summit this week that his media giant has created this too many sequels. But his company is now packaged into the corporate equivalent of one.

The financier Nelson Peltz, who runs the activist investment firm Trian, formally announced a fight for representation on Disney’s board, nearly a year after ending a similar battle. The question is how this effort will end up with investors.

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

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

Disney has defended its performance, said Thursday that it is on the right track Save approximately $7.5 billion in costs, more than initially predicted. And at the DealBook Summit, Iger said he has faced unexpected challenges, “some that arose from decisions made by my predecessor, others that are really just the result of a tremendous amount of disruption in the world and in our business. ”

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

The company noted that the shares of Perlmutter, who was fired this spring after years of clashes with other Disney executives, represent 78 percent of the shares Peltz says he controls. Perlmutter’s “long-standing personal agenda” against Iger raised questions about Peltz’s campaign because that motivation “may be different than that of all other shareholders,” Disney said.

At least one Disney investor appears concerned about Peltz’s campaign. Blackwell’s capital said it was “concerned that Trian’s campaign is prioritizing Mr. Peltz’s ego over what is best for all Disney shareholders, and that his latest effort could cost Disney shareholders more than $50 million.” (The extent of the stakes in Blackwells is unclear.)

— Gavin Newsom, the Democratic governor of California, last night in a Fox News debate with Governor Ron DeSantis of Florida. Newsom dropped the zinger suggesting that 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 continue their winning streak on Friday, with European markets in the green and Dow Jones industrial average futures pointing to a positive open.

And the rally in debt markets continues after U.S. bonds posted their best monthly performance since 1985, according to Deutsche Bank, a sign that investors are becoming increasingly hopeful that yields have peaked.

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

Inflation hawks got more good news Thursday when the Personal Consumption Expenditures report, an inflation measure closely tied to the Fed, showed price increases cooling.

Market watchers are betting that central banks are done raising interest rates. Some now even see the fed to cut its main interest rate during the May policy meeting. With financing costs expected to fall, investors have flocked back into risky assets. The Nasdaq 100, a collection of major technology stocks, rose about 11 percent last month.

It’s not all rosy. Many economists are concerned slower global growth next year. And JPMorgan Chase analysts see it a large number of risksincluding political uncertainties – there will be dozens of national elections around the world next year, including the race for the White House – which could send stocks down over the next thirteen months.

Can the rally last? A big test could come later on Friday, when Fed Chairman Jay Powell gives a speech that could highlight any concerns about the latest surge in asset prices.

“Market moves have been so big since he suggested that tight financial conditions were doing some of the Fed’s work for them (Nov. 1) that you have to think he will address the subsequent moves and either push back or support them ,” said Jim Reid, a spokesman for the US Federal Reserve. strategist at Deutsche Bank, wrote to investors this morning.

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