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SEC vs Musk, Barrick vs Newmont, India vs Pakistan: CEO Daily for February 26, 2019

Good morning.

Two stories to call your attention to this morning.

First, Microsoft CEO Satya Nadella has smartly shot down the growing group of employees petitioning the company to stop its work with the U.S. Army. The $749 million contract would provide HoloLens augmented reality tech for soldiers.

Here’s what Nadella said yesterday: “We made a principled decision that we’re not going to withhold technology from institutions that we have elected in democracies to protect the freedoms we enjoy.”


Second, former Danaher CEO, and now GE CEO, Larry Culp found a white knight who will help him alleviate GE’s debt woes, and that white knight is… Danaher! The company agreed to pay $21.4 billion for GE’s biopharma business. GE had rejected Danaher’s approach a year ago, but the new CEO appears to have changed the tune. The move helped GE’s bonds, but still leaves the company facing its biggest challenge—how to revive the struggling power business. That one will take longer.

More news below.

Alan Murray

Top News

SEC vs Musk

The Securities and Exchange Commission wants Elon Musk held in contempt of court, after the Tesla CEO tweeted that his firm would produce half a million cars this year. Tesla told shareholders last month that the actual delivery forecast topped out at 400,000. Musk’s settlement with the SEC forbids him from making grand pronouncements that could affect Tesla’s stock price, without clearing them with the company beforehand. Fortune

Barrick vs Newmont

Barrick Gold has made an unsolicited, all-share bid for Newmont Mining. If Newmont accepts the $17.85 billion offer, the world’s biggest gold miners would be united and—Barrick claims—costs would go down. Newmont CEO Gary Goldberg: “At this stage, they propose an 8% discount to our close on Friday. That doesn’t make sense…Look at our record of good delivery and Barrick’s destruction of value.”

India vs Pakistan

India has launched air strikes on the Pakistani side of the disputed Kashmir region. India says it was targeting a terrorist training camp, and claims to have killed 300 people. Pakistan says the attack was a “grave aggression.” This is a significant escalation of recent tensions that began on February 14 with a suicide attack on Indian forces in Kashmir. Bloomberg

Brexit Upheaval

The leader of the U.K. opposition party, Labour, has made a significant u-turn on the idea of a second Brexit referendum. Having previously been lukewarm on the idea, Jeremy Corbyn now says Labour will support a second referendum if the government doesn’t agree (it won’t) to swap out its own Brexit plan for Labour’s, which involves a permanent customs union with the EU. Meanwhile, Theresa May could announce today that she wants to delay the Brexit date. Politico

Around the Water Cooler

Buffett Admission

Warren Buffett admits Berkshire Hathaway and 3G Capital overpaid during the formation of Kraft Heinz. In a wide-ranging CNBC interview, he also said: he’d only buy more Apple stock if it were cheaper; he still finds stocks attractive; he’s still looking for an “elephant-sized acquisition”; and Bitcoin is still rubbish. CNBC

Etsy Revenue

The crafts marketplace Etsy hit $200 million in quarterly revenues—that’s a 47% year-on-year boost. The service’s stock popped by 6% following the news. CEO Josh Silverman: “We are gaining share.” BBC

Bump Stocks

The Trump administration’s ban on bump stocks has withstood a challenge in Washington, D.C. The ban on the devices, which effectively turn semi-automatic rifles into machine guns, will go into effect a month from now. Plaintiffs including the Firearm Policy Foundation claimed it was the “product of serious, multi-dimensional legal violations,” but U.S. District Judge Dabney L. Friedrich didn’t see a problem. NBC

Facebook Moderators

Facebook’s moderators have a job that is frequently traumatic and, in some cases, even radicalizing. That’s according to a bombshell report from The Verge, which notes that the moderators—generally contractors with a low-perk deal—”have begun to embrace the fringe viewpoints of the videos and memes that they are supposed to moderate.” The Verge

This edition of CEO Daily was edited by David Meyer. Find previous editions here, and sign up for other Fortune newsletters here.