India and Pakistan, Cohen Testimony, Trump Border: CEO Daily for February 27, 2019
If I were a Tesla board member, I’d be beginning to worry—scratch that, I’d be beyond worry and into panicking—about whether my CEO is seriously ill. Why else would he openly taunt the SEC, in effect daring the agency to do exactly what it did Monday night, filing a suit saying his tweets had violated the agreement he signed with the SEC last year. Who does that? Wedbush Securities analyst Dan Ives wrote yesterday that Musk’s actions create a “tornado of uncertainty” for Tesla shares, and “another distraction for Musk & Co.” CNBC’s Jim Cramer, no shrinking violet himself, went a step further, saying Musk “should be removed” from the job.
In the meantime, Fortune’s Eamon Barrett profiles a company that aims to displace Tesla as the fan favorite in the electric car crowd: Dyson. The company currently produces vacuum cleaners, hair dryers, humidifiers and the like. But it has been working in recent years to build its battery expertise. And ultimately, it is batteries that may win the electric car race.
While Tesla just broke ground on a factory in China, Dyson is putting its plant in Singapore. I’ll be going there next week for Fortune’s Brainstorm Design conference, and interviewing Dyson CEO Jim Rowan. Dyson was into design thinking before it was a thing, and I’m looking forward to asking him about his big bet on electric cars.
Stay tuned here. More news below.
India and Pakistan
Tensions between India and Pakistan continue to ratchet up in a very scary fashion. The latest: Pakistan claims to have shot down two Indian Air Force jets inside Pakistani airspace, India has apparently shot down a Pakistani jet that violated its airspace, no planes are reportedly allowed to fly north of Delhi right now, and armies are on high alert. The yen and Swiss franc have strengthened as investors flee for safe markets. Bloomberg
Former Trump lawyer Michael Cohen, who was disbarred in New York yesterday, will today tell Congress that his ex-employer is a “con man,” a “racist” and a “cheat.” He says the president knew full well that Roger Stone was working with WikiLeaks to put out the Clinton team’s emails, was directing Trump Tower Moscow negotiations during his campaign, and got Cohen to threaten his former school and colleges to suppress his grades and SAT scores, according to an advance copy of Cohen’s testimony. The White House, meanwhile, has condemned Cohen as a “disgraced felon.” New York Times
Meanwhile, as the president meets with Kim Jong-un in Vietnam to discuss a denuclearization deal, his national emergency back home is in jeopardy. The House of Representatives voted yesterday to overturn Trump’s declaration of an emergency over the Mexican border wall, with 13 Republicans siding with the Democrats. BBC
AT&T Time Warner
The way is now clear for AT&T’s Time Warner buy, after a federal appeals court nixed the Justice Department’s attempted blockage. The rollback bid was “unpersuasive,” according to the unanimous ruling. Justice Department: “We are grateful that the Court of Appeals considered our objections to the District Court opinion. The Department has no plans to seek further review.” Wall Street Journal
Around the Water Cooler
CME Group, the world’s biggest exchange operator, suffered a three-hour outage yesterday evening due to a technical error. Affected markets included metals, oil and gas, and Eurodollars. “There are some people who make arbitrage trades in after-hours trading. This poses a risk of hurting investor sentiment,” complained one trader. Bloomberg
Barrick and Newmont
Flossbach von Storch, which owns a lot of shares in both Barrick Gold and Newmont Mining, has backed the merger proposed by Barrick, as long as it is “seamless and not too hostile.” Shareholders such as Flossbach von Storch and BlackRock will be key to the future of the bid. Financial Times
The British broadcasters ITV and BBC have teamed up to launch a streaming service featuring classic British TV, but not the latest series. The BritBox service, intended as a rival to Netflix, is currently available in North America and will launch in the U.K. itself in the second half of the year. Variety
IBM has apologized for job application forms on its website that gave applicants the option to choose “yellow” and “coloured” as their ethnic groups. “IBM has long rejected all forms of racial discrimination and we are taking appropriate steps to make sure this does not happen again,” it said. This is actually more complicated than it seems. The terms are official classifications in Brazil and South Africa—and certainly in the latter case, it’s how a large section of the population self-identifies—but for an applicant in the U.S., they were inappropriate and understandably shocking. Fortune