‘This is for the best’
A week ago, we learned that Elon Musk had purchased a big stake in Twitter. Shortly after, the billionaire chief of Tesla — and Twitter power user — was invited to join the social media company’s board.
Late last night, Twitter announced that Musk would not join the board after all, another unexpected twist in an increasingly convoluted saga. Twitter’s shares fell in premarket trading, although they remain higher than before Musk’s stake was first revealed.
What is going on?
“I believe this is for the best,” Twitter’s C.E.O., Parag Agrawal, said in a short statement on the U-turn. But in offering him a seat, he said Twitter’s board had decided that having Musk on the board, where fiduciary duties as a director would require him “to act in the best interests of the company and all our shareholders,” was “the best path forward.” That said, “we will remain open to his input,” Agrawal said of Musk.
On the morning he was supposed to join the board, Musk told Twitter he wouldn’t, Agrawal said. That was Saturday, and no specific reason was given — Agrawal noted that Musk’s appointment was contingent on a background check and formally accepting the offer. (Musk also needed to fill out a questionnaire given to all directors, according to a filing.) Musk tweeted erratically throughout the weekend, asking his 81 million followers “Is Twitter dying?” and rattling off a stream of critiques in now-deleted tweets, suggesting (with unclear degrees of seriousness) that Twitter should think about removing ads, changing its name and converting its San Francisco headquarters into a homeless shelter.
Now what? This might not be the end of the drama. If he is not on Twitter’s board, Musk is not bound by the “standstill” agreement in which he pledged to buy no more than 14.9 percent of Twitter’s stock. Recall that Musk initially disclosed his stake in a filing that suggested he was a passive investor in Twitter, but later refiled with the form that activist investors use. The famously mercurial Musk now has no restrictions on how much of Twitter’s stock he can buy, leading some to lay out scenarios in which he takes an even more active role trying to influence the platform.
Pointedly, Agrawal said that “there will be distractions ahead” and told Twitter employees to “tune out the noise.”
HERE’S WHAT’S HAPPENING
Emmanuel Macron will face Marine Le Pen for president of France. After Sunday’s first round of voting, a runoff on April 24 will pit Macron, the incumbent, against Le Pen, the far-right leader whose late surge reflected French voters’ anger and anxiety over rising prices, security and immigration.
Companies are set to report strong first-quarter profits. Earnings season begins this week, and FactSet forecasts that profits for the S&P 500 will rise an average of 10 percent from a year ago. The data service also noted that analysts had the highest number of “buy” recommendations in a decade.
JetBlue and Alaska Air are cutting flights. Ahead of what is likely to be a busy summer travel season, the airline industry is hoping to avoid the problems of thin staffing and long delays that plagued travelers last summer.
The Private Life of MacKenzie Scott
The novelist is one of the most consequential philanthropists in the world.
The crypto industry is writing its own legislation. In the absence of strong federal regulation, crypto executives and lobbyists are helping to draft bills at the state level, then pushing state lawmakers to adopt them.
A former Goldman banker has been convicted on bribery and money-laundering charges. Roger Ng was accused of receiving illegal kickbacks from Malaysia’s 1MDB sovereign wealth fund. He could face up to 30 years in prison.
‘This is not unexpected’
Weeks after the U.S. loosened its pandemic protocols, there has been a small rise in infections, including among some high-profile figures. Dozens tested positive after attending the annual dinner for Washington’s elite at the Gridiron Club, including administration officials and members of Congress. Yesterday, Mayor Eric Adams of New York, a major proponent of reopening the city, said that he too had Covid.
“We are going to pivot and shift as Covid is pivoting and shifting,” Adams said last week. So, is it time for a pivot?
By the numbers: There are more than 31,000 new virus cases a day in the U.S., on average, a 3 percent increase from two weeks ago. Case counts remain far below peaks during the winter surge, even in places where they are rising rapidly.
Some say this wave may be less disruptive than in the past, because it’s more likely to affect people who have been the most cautious. At the same time, Democrats fear that renewed lockdowns could turn off voters as the midterm elections approach. How to handle this latest wave will be one of the first tests faced by the Biden administration’s new Covid czar, Ashish Jha.
“This is not unexpected,” Dr. Anthony Fauci said of the recent uptick in cases. He told ABC yesterday that if hospitalizations began to rise, “we may need to revert back to being more careful and having more utilization of masks indoors.” Dr. Fauci said it was up to individuals to decide on “the individual risks they’re going to take.” Many in Washington seem eager to party on.
On Jared Kushner, Steven Mnuchin and Saudi money
A fund led by the Saudi crown prince agreed to invest $1 billion in a fund created by the former Treasury secretary Steven Mnuchin — but it invested twice as much, and on more generous terms, in a new private equity firm started by Jared Kushner, the former White House adviser and son-in-law to former president Donald Trump.
Those are some of the many new details in an investigation by The Times’s David Kirkpatrick and Kate Kelly into efforts by the two former Trump administration officials to raise money from the Saudi sovereign wealth fund. They also report:
A panel that screens investments for the Saudi fund objected to the Kushner deal, documents show, concluding that his firm’s fees were too high and its operations were “unsatisfactory in all aspects.” The full board, led by Crown Prince Mohammed bin Salman, who benefited from Kushner’s support when he worked in the White House, overruled the panel.
Kushner’s venture, Affinity Partners, depends primarily on the Saudi money, documents and filings indicate. He planned to raise up to $7 billion, but appears to have signed up few other major investors.
The Saudis’ internal debate over the Kushner investment was a stark contrast to their easy approval of the proposal by Mnuchin, who, unlike Kushner, had a track record in private equity before entering government.
Scrutinizing MacKenzie Scott’s methods
The philanthropist MacKenzie Scott has donated more than $12 billion in less than three years, to more than 1,200 groups. But her method of giving — fast, large and often shrouded in secrecy — is raising concerns in the world of nonprofits, The Times’s Nicholas Kulish and Rebecca Ruiz report in a must-read profile of Ms. Scott, who has pledged to give away all of her substantial fortune.
Scott does not give through a foundation that would have to file tax returns. Instead, she uses a donor-advised fund, which allows her to give large, tax-free donations without revealing their source. Scott tends to reveal her donations in batches, disclosing dozens at a time, often in a blog post. This approach contrasts with an earlier philanthropic effort, Bystander Revolution, which began in 2014, when Scott was still married to Amazon’s Jeff Bezos (they divorced in 2019). After a splashy launch, the anti-bullying organization seemed to fizzle, and Scott appeared not to want to serve as its face.
Little is known about Scott’s giving methodology. She is advised by the influential nonprofit consulting firm Bridgespan and directs her gifts via a Delaware-registered shell company called Lost Horse. Little else is known about her operation, down to the number of employees.
“Her preferences are shaping the face of American civil society,” said Rob Reich of Stanford. “That power deserves civic scrutiny and attention.”
Abigail Disney on American oligarchs
The war in Ukraine has put the spotlight on Russian oligarchs, as countries have sanctioned wealthy business leaders with ties to President Vladimir Putin of Russia. Well-connected billionaires in the U.S. deserve more scrutiny as well, argues Abigail Disney of Patriotic Millionaires, a nonprofit that pushes for higher taxes on the rich.
Ms. Disney, a granddaughter of The Walt Disney Company co-founder Roy Disney, is intimately familiar with the privileges — and perils — of wealth. (A previous version of this newsletter incorrectly referred to her as a granddaughter of Walt Disney.) “We have our own oligarchs manipulating the economy and governance,” she told DealBook. “We need to get very serious about that.” Last week, Patriotic Millionaires gathered in Washington to discuss domestic oligarchy, and Disney said she felt a “remarkable” receptivity to their message.
“We spend too much time arguing around the edges,” Disney said. She believes that a few rich Americans use their tremendous wealth to fund campaigns that foment division on fringe issues. Voters actually agree on a lot when it comes to class and economic fairness, she said, pointing to the popularity of minimum-wage increases.
“The energy now is new and different,” Disney said. “In the past people would wave the class-war flag, but I think most Americans have a revulsion to economic injustice.” Not only are wealthy progressives more energized than before, she said, but conservatives are also increasingly open to the idea of a fairer tax code.
“It took me forever to see,” Disney said of her gradual transformation from conservative family heiress to progressive activist. One instance more than 20 years ago stands out: She woke up alone in a queen-size bed in her father’s private 737 jet, and wondered if less might be more. “If everyone expects to finish with more, we’re in trouble,” she said, and others in her privileged position increasingly agree. “People are beginning to understand you can say ‘no’ to more money.”
THE SPEED READ
S&P placed Russia’s government in “selective default” because it repaid debt in rubles instead of dollars. (NYT)
Ericsson has indefinitely suspended its business in Russia, and Société Générale announced a multibillion-euro hit from selling its stake in Rosbank. (Bloomberg, NYT)
Austria’s chancellor is in Moscow and will be the first European leader to meet with President Vladimir Putin since Russia’s invasion. (NYT)
The private equity group Thoma Bravo is reportedly set to acquire the cybersecurity specialist SailPoint Technologies for $6.9 billion. (FT)
An increasing number of venture-backed start-ups are bulking up by acquiring A.I. developers. (WSJ)
Mindbody, the owner of the exercise subscription service ClassPass, is plotting a return to public markets. (FT)
Economists are betting on a decline in inflation, but the volatile price of cars is a wild card in their forecasts. (NYT)
“China’s Echoes of Russia’s Alternate Reality Intensify Around the World” (NYT)
Best of the rest
Rising prices could wipe out thousands of Britain’s fish-and-chips shops. (NYT)
Greenwood wants to become Black America’s go-to bank. (Bloomberg Businessweek)
“What the New TV Shows About Start-Up Grift Still Don’t Get” (Politico)
We’d like your feedback! Please email thoughts and suggestions to [email protected]