It’s definitive. A Delaware Chancery Court judge ruled this week that Elon Musk won’t be getting his $100 billion payday. Chancellor Kathaleen St. J. McCormick said she won’t be reversing her January ruling that said Tesla’s board of directors wasn’t independent enough of Musk when it awarded him the pay package back in 2018, and that they hadn’t fully informed shareholders of their options when they put the package to a new vote in June. Musk was promised a mountain of stock options if Tesla’s price soared and sales and earnings rose. And all those things did, in fact, happen while Musk was Tesla’s CEO. In her January ruling, after a trial in 2022, McCormick said, “The process leading to the approval of Musk’s compensation plan was deeply flawed.”
That’s despite the fact that 71% of Tesla’s shareholders (Musk and his brother Kimbal didn’t vote) approved the package. But McCormick’s ruling that Tesla, incorporated in Delaware, violated the state’s laws, is binding on Tesla. “A stockholder vote standing alone cannot ratify a conflicted-controller transaction,” she wrote, referring to Musk’s influence over the board and its decisions through his 13% stake in Tesla. The package, interestingly, was worth only about $50 billion when Musk tried to claim it in 2022, but it’s doubled in value since then.
Still, no one should feel sorry for Elon Musk. He has a 42% stake in privately held SpaceX, which is gazooming in value, especially after Trump’s electoral win, which investors say could position the company for billions more in government-funded contracts and open the way to private space exploration. A recent private fund-raise values the company at about $350 billion, but as Morningstar reports, there’s little chance of an imminent public offering. SpaceX raised $1.7 billion at a company valuation of $125 billion in June 2022 in a secondary transaction, according to ForgeGlobal. SpaceX’s privately held stock is currently trading at $118.59 a share on the ForgeGlobal platform. It hit an all-time high of $136.87 a share in June.
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The Usual Suspects
- Detroit’s China Syndrome: General Motors said it will take a $5 billion hit to its profits this year in its 50-50 joint venture with China’s state-owned SAIC Motor. Chinese consumers are eschewing U.S. cars and opting for locally made sedans, embracing hybrid and electric cars. GM said sales in the first nine months of the year fell 20%, and the company lost $347 million. Many foreign automakers are taking it in the gut in China, as local makers cut prices and build market share. Ford said it spent $881 million restructuring its China business in the first nine months of the year.
- Bitcoin’s Breakthrough: On Thursday morning, Bitcoin broke through the $100,000 barrier, up 159% from a low of $38,505 earlier this year, probably on the back of Donald Trump’s plan to name crypto-friendly former SEC commissioner Paul Atkins to head the commission (see below). But the wildly varying price of Bitcoin still means it’s not easy to buy anything with it, including a Tesla (which only takes Dogecoin anyway).
- AI Safe, Says AI Guy: OpenAI founder Sam Altman says he expects AI to equal the ability of the human brain, a turning point known as artificial general intelligence, or AGI, within the next few years, but says there’s nothing to worry about. “A lot of safety concerns that we and others expressed actually don’t come at the AGI moment,” Altman told a conference in New York.
- Black Friday Dreams: From Thanksgiving through Cyber Monday, a near record 197 million Americans went shopping for deals, the National Retail Federation reports. That’s just shy of last year’s all-time record of 200.4 million shoppers and way above the trade group’s initial forecast of 183.4 million. Two-thirds of those shoppers actually braved the crowds and went into brick-and-mortar stores, as well as steel-sided giant sheds like Costco. Top destinations were department stores and grocery stores, and shoppers spent an average of $235 apiece. Top purchases: clothing, with 49% of shoppers buying clothes, followed by toys at 31%, and unimaginative gift cards at 27%.
- Home Depot No-No: Looks like the folks at Home Depot were trying to goose their Black Friday sales by labeling regular prices as special deals for the shopping holiday. A TikToker who goes by the handle SideMoneyTome posted a video of himself peeling off a series of “Black Friday Savings” stickers at Home Depot to reveal the regular prices underneath—and they were the same. Another TikToker posted a similar video from Target, where ordinary sale prices were covered over with labels declaring “Black Friday Special.” Home Depot didn’t respond to questions from various media. Target said the items were already on sale. No harm, no foul?
- Disney’s Up: There’s more cheddar for investors in the House of Mouse. Disney is boosting its dividend by a third, to $1 a share for FY 2025. Last year’s dividend was 75 cents. Disney says it’s trimmed costs and had a great year. Moana 2 took in a record $221 million at the U.S. box office over Thanksgiving weekend, though with ever-rising ticket prices, the number of people who saw it in theater was well behind records set back in the heyday of movie-going. Shares in Disney are up 28% this year, but still down about 5% from their 2024 peak in April.
- Stepping Out: Tough times for two corporate leaders. Stellantis CEO Carlos Tavares is gone, after failing to turn around the international auto group that includes Chrysler and Jeep. Stellantis shares have plunged 40% in the last year. At Intel, CEO Pat Gelsinger is gone after four years of trying to revive the fortunes of the also-ran chipmaker. Intel is inside most of the world’s PCs, but it has failed to develop its own AI chip and has not been inside smartphones for years. Intel’s shares are down 50% in the past year.
- Is Amazon Redlining? Washington, D.C.’s attorney general sued Amazon this week, accusing the online shopping mecca of making slower deliveries to Prime members in low-income neighborhoods, in a bid to save money. Attorney General Brian Schwalb said Amazon had secretly ended high-speed delivery to 50,000 Prime subscribers in subprime zip codes, handing their packages over to UPS and the U.S. Postal Service. Amazon said it made the changes because it feared for the safety of its drivers. Major crime has been on the decline in the U.S., according to the FBI.
- What’s the Job of the Hut? Remember when Pizza Hut was a place to go for a meal or take a date, where you’d sit in those red vinyl booths under a faux-Tiffany lampshade and eat a pie with soggy dough, bland red sauce and weirdly chewy cheese? Well, the concept is getting a makeover, as in-store dining declines and deliveries are down, too. So now Pizza Hut is adding a drive-through option that will let you pick up a pie in less than three minutes from the time you order. The first U.S. location is in Plano, Texas, but the chain has been doing this in other countries for years. The Hut must be doing its job right because traffic is up 9 percent in the most recent nine-month period measured by Placer.ai, which tracks visitors to stores and restaurants using smartphone data, and that’s three times the quick-serve restaurant industry average of 3%. Shares in parent Yum Brands are up 11% in the past year.
- Nvidia Nvy? Jensen Huang may make the world’s fastest computer chips, but he may also be one of the biggest individual tax dodgers in the U.S. According to The New York Times’s Jesse Drucker, inheritance-tax workarounds will let Huang’s family keep an extra $8 billion that should probably go to cover the cost of running the U.S. government when his fortune—now estimated at $127 billion—passes to his next of kin. As Drucker notes from digging into piles of tax documents “It is just one sign of how the estate tax—imposed solely on a sliver of the country’s multimillionaires—has been eviscerated.” Estate tax revenue has barely changed since 2000, even as the wealth of the richest Americans has roughly quadrupled, Drucker noted. “If the estate tax had simply kept pace, it would have raised around $120 billion last year. Instead it brought in about a quarter of that.”
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The Short Stack
- Who Killed Brian Thompson? The 50-year-old CEO of insurer UnitedHealthcare was shot dead in an apparent hit on a midtown Manhattan street Wednesday morning. Video from the scene showed a tall, thin man in a black hoodie with gloves and a gray backpack firing an automatic pistol with a silencer into Thompson’s back and leg. On Thursday, police were still hunting for the gunman and had yet to identify him, or his motive. Shares of United Healthcare have been steadily rising for decades, and closed Wednesday evening at 610.79, near an all-time high.
- Greenhouse Gaslighting? Carrboro, N.C., knows who to blame for the warming planet and the environmental effects the city is feeling: Charlotte-based Duke Energy. The local power provider, one of the nation’s largest private utilities, knew its operations were pumping greenhouse gases into the atmosphere, but rather than curb their use, it burned more and mostly in poorer neighborhoods, according to the suit. The town, outside Chapel Hill, has sued Duke for damages, saying the utility’s actions were costing residents millions of dollars as manmade climate change boosted the intensity of floods and extreme weather.
- A New World Cup? Maybe. Soccer’s governing body, FIFA, says Ukrainian-British billionaire Lev Blavatnik has promised to pay $1 billion for rights to stream a planned 32-team Club World Cup to be held in the U.S. next year. FIFA has promised a purse worth about the same amount to draw teams including Real Madrid, InterMilan, and Bayern Munich. It remains to be seen whether FIFA can actually pull off the event, and whether Blavatnik can come up with the cash. His DAZN streaming network has lost billions of dollars on sports in the past few years, and Saudi Arabia’s sovereign wealth fund is reportedly angling for a piece of the streamer—and the tournament.
News From Trumpland
- President-elect Donald Trump has picked a former SEC commissioner, Paul Atkins, to run the agency that ensures the safety and transparency of America’s exchanges and public companies. Atkins, who served under George W. Bush, is known as an advocate for looser regulation of cryptocurrencies. Atkins is co-chair of the Token Alliance, where he is helping draft a best-practices code for crypto exchanges. The crypto industry spent tens of millions of dollars to support Trump’s presidential campaign.
- Donald Trump keeps trying to get Fed chair Jerome Powell to mix it up with him, in an effort to get Powell, whom Trump appointed in his first term, to quit. But J.P. ain’t biting and he ain’t fighting. “What is the case for the Fed being independent?” Powell asked at a conference in New York this week. “It basically means that we can make our decisions without them being reversed—other than by Congress. And that gives us the ability to make these decisions for the benefit of all Americans, at all times. Not for any particular political party or political outcome.” Powell added, “We are the sort of envy of other large economies around the world, and I want to do everything I can to keep it there during the rest of my term.”
- Nouriel Roubini, the NYU economist who correctly predicted the 2008 real estate crash and ensuing Great Recession, warns Trump’s economic policies might give a quick flash in the pan of growth, but the rebound will hit hard. “Some of the economic policies of Trump may lead to high economic growth,” Roubini told Bloomberg this week. “Unfortunately many of the other policies are going to have an implication of higher inflation and lower economic growth.” Roubini says inflation under Trump could hit 5%. Meanwhile, Ernst & Young chief economist Gregory Daco says Trump’s proposed 25% tariffs on Mexico and Canada, along with 10% tariffs on China “would reduce US GDP by 1.5% in 2025, while raising inflation by 0.4ppt.”
- Amazon master Jeff Bezos, who’s been in an on-again, off-again Twitter spat with Elon Musk, says he wants to support Trump’s red-tape-cutting effort. Yes, the same one that Elon Musk is co-leading with human chatbot Vivek Ramaswamy. “He seems to have a lot of energy around reducing regulation. And from my point of view, if I can help him do that, I’m going to help him,” Bezos said of Trump in an interview this week. Is Bezos trying to mend fences with space rival Musk in a bid for more government money? Or just get in good with the next president? The Bezos-owned Washington Post last month famously pulled its planned endorsement of Kamala Harris on the eve of the election.
- Trump’s pick to run the IRS is a former GOP congressman who sold dubious tax credits. Former Missouri Rep. Billy Long served six terms in Congress, then helped businesses claim a pandemic-era tax credit that has been riddled with fraud and cost the government billions more than anticipated. Long defended his work helping companies claim the Employee Retention Tax Credit, intended to help small businesses keep workers they couldn’t afford to pay when the pandemic shut down the economy. “We don’t sneak anyone through,” he said in a podcast last year. “We make darn sure they do qualify for this refund of their own money from the I.R.S. with interest.”
Peter S. Green is a veteran reporter and editor who has spent more than two decades covering business and finance from Eastern Europe to New York City, and has worked for Bloomberg News, The New York Post, The New York Times and The Messenger. He lives in New York City and is always looking for the next big story.
