DealBook Briefing: Elon Musk Declares War on the Media

DealBook Briefing: Elon Musk Declares War on the Media

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Today’s DealBook Briefing was written by Andrew Ross Sorkin in New York, and Michael J. de la Merced and Jamie Condliffe in London.

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Photo Credit Jorge Duenes/Reuters
Trump has made foreign cars the latest trade battleground

Why has the president directed the Commerce Department to investigate whether imported cars are a national security threat? It’s to put pressure on Mexico, where many U.S. cars are now made, as negotiations over a revised Nafta treaty have stalled.

But the hardball tactic worries the U.S. auto industry that it’s meant to protect.

Critics’ corner, Chinese trade war edition: China is winning because it has done its homework and the U.S. hasn’t, according to John Cassidy of The New Yorker. Mr. Trump should declare victory and call it a day, argues Ramesh Ponnuru of Bloomberg Opinion.

Photo Credit Matt Rourke/Associated Press
Comcast’s bet for winning Fox: Play the Murdochs against other investors

Comcast yesterday made public what we all knew: It is preparing an all-cash offer for the 21st Century Fox assets that would surpass Walt Disney’s $52.4 billion bid. The announcement has a clear goal. With Fox and Disney moving toward a shareholder vote on their deal by midsummer, the cable giant wanted to give Fox shareholders a reason to hesitate.

There’s an opening for Comcast. The Murdochs normally control 40 percent of Fox’s voting power through special shares. But they will not enjoy that luxury with the Disney offer, and will be able to to vote only using their 17 percent stake.

A potential spoiler: The activist investor Chris Hohn has disclosed that he holds a 7.4 percent stake in Fox and wants the company to begin talks with Comcast. (Per Fox’s merger agreement with Disney, however, it can do nothing until Comcast formally makes a bid.)

Elsewhere in media:

• CBS said in legal filings that its controlling shareholder, Shari Redstone, was “a substantial threat” to other investors.

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• Netflix has overtaken Comcast in market value.

The political flyaround

• A federal judge ruled that President Trump can’t block people who criticize him on Twitter. (NYT)

• A federal regulator that once chased banks out of the market for small, emergency loans wants them to get back in. (NYT)

• The I.R.S. warned states not to offer loopholes for new state and local tax rules. (NYT)

• Fed officials see global trade tensions as a potential weight on U.S. business sentiment. At their meeting next week, they’re expected to discuss potential changes to the Volcker Rule.

• Michael Cohen reportedly received $400,000 from Ukraine to arrange a meeting with Mr. Trump last summer. A Ukrainian inquiry into Paul Manafort stopped shortly afterward. (BBC)

Photo Credit Tyrone Siu/Reuters
Uber made a profit. Don’t get too excited.

The healthy balance sheet is because the ride-hailing company threw in the towel overseas, including by selling businesses to rivals in Southeast Asia and Eastern Europe. Ignoring those transactions, the company lost $601 million — but that’s an improvement over the last quarter.

Expect Uber to keep spending. Though it has shut down its driverless car tests in Arizona following a fatal crash in March, the company is still investing heavily in autonomous vehicles. And it is opening a laboratory in Paris to work on electric flying taxis.

But not to worry, according to Shira Ovide of Bloomberg Opinion: Investors are still comfortable with that.

Photo John Flannery, the General Electric C.E.O. Credit Alwyn Scott/Reuters
G.E.’s chief: There’s no ‘quick fix’ here

The company’s C.E.O., John Flannery, offered little reassurance to shareholders yesterday that better days were around the corner. The conglomerate’s power division? It’s still struggling amid weak demand for gas turbines. Another dividend cut? That can’t be ruled out.

The result: Shares in G.E. tumbled more than 7 percent, to a low last seen in 2009.

Photo Credit Lucas Jackson/Reuters
The deals flyaround

• FanDuel agreed to sell itself to Britain’s Paddy Power Betfair, a week after the Supreme Court legalized sports betting in the U.S. (USA Today)

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• Kroger plans to buy Home Chef, America’s biggest privately held meal-kit company. (WSJ)

• Canada blocked the sale of the construction company Aecon to a Chinese counterpart, citing national security concerns. (Bloomberg)

• ESPN agreed to buy the broadcast rights for Ultimate Fighting Championship in a five-year, $1.5 billion deal. (Reuters)

• Adyen, a European payments company used by Facebook and Netflix, plans to go public. (Business Insider)

Photo Serge Elkiner, left, the C.E.O. of YellowPepper, and Eduardo Coello, the head of Visa’s Latin America team. Credit YellowPepper
Why Visa is investing in Latin American fintech

By leading a $12.5 million investment in YellowPepper, Visa is trying to secure a toehold in the fast-growing Latin American market. YellowPepper, which provides mobile payment products to banks in countries like Brazil and Mexico, already processes 480 million transactions each year.

“Visa has a large interest in seeing the ecosystem in Latin America grow around payments,” Ruben Salazar, Visa’s head of products and services for Latin America, told Michael de la Merced. “This is the right company to start making investments in.”

The question: Can YellowPepper compete against bigger rivals like Alibaba, who see Latin America as a big opportunity?

The tech flyaround

• Apple plans to work with Volkswagen on a fleet of autonomous vehicles, though the automaker wasn’t its first choice. (NYT)

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• To fight false news, Facebook is opening up data to academics and embarking on a public education campaign. Oh, and it made a film to prove it’s working on the problem. (Wired)

• The F.B.I. has seized a Russian server that hacked 500,000 network routers to perform criminal tasks. (Daily Beast)

• Samsung is betting that you want every appliance in your home to talk to you. (WSJ)

• A new study suggests that the work force isn’t learning tech skills fast enough. (McKinsey)

Photo Carl Icahn Credit Neilson Barnard/Getty Images For New York Times
One last thing: A $100,000 martini with Carl Icahn

Don’t worry. The six-figure cocktail was bought as part of a fund-raiser for the Wolf Conservation Center, an environmental nonprofit. Kicking off bidding for the drink — at $1.50 — was Richard Handler of Jefferies, the husband of the organization’s chairwoman, Martha Handler.

Revolving door

• The law firm Norton Rose Fulbright lost a swath of lawyers yesterday. A life sciences team, led by Rick Robinson, joined Reed Smith, while Abbe Lowell, the white-collar specialist representing Jared Kushner, joined Winston Strawn.

The speed read

• A majority of N.F.L. team owners voted to penalize players who kneel during the national anthem, in a bid to stem protests that have hurt business. (NYT)

• Goldman Sachs made a $200 million trading profit on a single day in February. (CNBC)

• Turkey raised interest rates to defend the lira, making investors worry again about emerging markets. (NYT)

• A look at how quickly China’s economy is catching up to the U.S. (Bloomberg)

• Failing to meet the goals of the Paris climate agreement could cost the world $20 trillion. (MIT Technology Review)

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• Federal prosecutors are reportedly investigating sex-abuse allegations against Harvey Weinstein. (WSJ)

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