Elon Musk posted video Wednesday showing him strolling into Twitter headquarters ahead of a Friday deadline to close his $44 billion deal to buy the company.
Musk also changed his Twitter profile to refer to himself as “Chief Twit” and his location as Twitter headquarters, which is based in San Francisco. The video showed him carrying a sink through a lobby area.
“Entering Twitter HQ – let that sink in!” he tweeted.
Entering Twitter HQ – let that sink in! pic.twitter.com/D68z4K2wq7
— Elon Musk (@elonmusk) October 26, 2022
A court has given Musk until Friday to close his April agreement to acquire the company after he earlier tried to back out of the deal. Neither Musk nor Twitter has said if the deal is closed yet.
Despite Musk’s splashy entry to headquarters, it wasn’t clear yet whether his purchase of Twitter had been finalized. Twitter confirmed that Musk’s video tweet was real but wouldn’t comment further. Alex Spiro, Musk’s lead lawyer, didn’t immediately return a request for comment.
The Washington Post reported last week that Musk told prospective investors that he plans to cut three quarters of Twitter’s 7,500 workers when he becomes owner of the company. The newspaper cited documents and unnamed sources familiar with the deliberation.
One of Musk’s biggest obstacles to closing the deal was keeping in place the financing pledged roughly six months ago.
A group of banks, including Morgan Stanley and Bank of America, signed on earlier this year to loan $12.5 billion of the money Musk needed to buy Twitter and take it private. Solid contracts with Musk bound the banks to the financing, although changes in the economy and debt markets since April have likely made the terms less attractive. Musk even said his investment group would be buying Twitter for more than it’s worth.
Less clear is what’s happening with the billions of dollars pledged to Musk by investors who would get ownership stakes in Twitter. Musk’s original slate of equity partners included an array of partners ranging from the billionaire’s tech world friends with like-minded ideas about Twitter’s future, such as Oracle co-founder Larry Ellison, to funds controlled by Middle Eastern royalty.
The more equity investors kick in for the deal, the less Musk has to pay on his own. Most of his wealth is tied up in shares of Tesla, the electric car company that he runs. Since April, he has sold more than $15 billion worth of Tesla stock, presumably to pay his share. More sales could be coming.
Musk’s flirtation with buying Twitter appeared to begin in late March. That’s when Twitter said he contacted members of its board — including co-founder Jack Dorsey — and told them he was buying up shares and was interested in either joining the board, taking Twitter private or starting a competitor.
Then, on April 4, he revealed in a regulatory filing that he had become the company’s largest shareholder after acquiring a 9% stake worth about $3 billion.
At first, Twitter offered Musk a seat on its board. But six days later, CEO Parag Agrawal tweeted that Musk would not be joining the board after all. His bid to buy the company quickly followed.
When Musk agreed to buy Twitter, he inserted a “420” marijuana reference into his price of $54.20 per share. He sold roughly $15 billion worth of shares in Tesla to help fund the purchase, then pulled together commitments for billions more from a diverse group of investors including Silicon Valley heavy hitters like Oracle co-founder Larry Ellison.
Inside Twitter, Musk’s offer was met with confusion and falling morale, especially after Musk publicly criticized one of Twitter’s top lawyers involved in content-moderation decisions.
In July, Musk abruptly reversed course, announcing that he was abandoning his bid to buy Twitter. His stated reason: Twitter hadn’t been straightforward about its problem with fake accounts he dubbed “spam bots.” Twitter sued Musk in Delaware Chancery Court to force the deal through. Two weeks before a 5-day trial was scheduled to begin, Musk changed his mind again, saying that he wanted to complete the deal after all.
Stock market news live updates: Stocks smoked as oil, tech stocks lead markets lower
U.S. stocks sunk Monday as investors digested the first releases in a week full of economic data and mulled what recent data could mean for Federal Reserve policy ahead.
The economic data front provided further bearish signals for stocks, as key indicators came in stronger than expected. Leading the economic calendar for the week was the release of the Institute for Supply Management’s (ISM) services index. The index expanded faster in November than anticipated, at a 56.5 level compared to estimates of 53.5 and above October’s reading of 54.4, painting the picture of a still-strong services industry.
Meanwhile, new orders for U.S.-manufactured goods also beat expectations, rising 1.0% in October.
In a separate report, however, S&P Global’s the Purchasing Managers’ Index (PMI) stood at a 46.2 level in November, down from the October reading of 47.8. New business activity fell at the sharpest rate since May 2020, S&P Global said.
The new data comes on the heels of Friday’s hotter-than-expected jobs report, which sent stocks to a choppy session. The strong job gains and robust wage growth are the opposite of what the Federal Reserve would like to see in its battle against inflation. Friday’s figures showed demand for workers remains out of balance with supply, signaling that Fed policymakers could either take rates higher than previously anticipated or hold them higher for longer in restrictive territory.
New readings on the producer price index (PPI) — which measures prices paid for goods and services before they reach consumers and consumer sentiment — will be out this week.
The narrative from U.S. central bank officials, now in their pre-meeting blackout period, has suggested they would downshift to a half-point hike at their Dec. 13-14 meeting, after four consecutive 75 basis-point increases. Investors are now wondering how much longer will the central bank continue to hold its tightening campaign, how high the federal funds rate will end up, and how long it will stay there.
“It’s fascinating that at the moment the market is focusing squarely on the very strong likelihood that we’ll ratchet down to ‘only’ a 50bps hike next week and extrapolating that level of dovishness rather than focus on any risks that the terminal rate could end up being nearer say 6% than 5%,” Jim Reid and colleagues at Deutsche Bank wrote in an early morning note Monday.
Meanwhile, another batch of third-quarter earnings figures will be out, finishing off the reporting season.
The yield on the benchmark 10-year Treasury note Monday moved back up past 3.5%, while oil prices fell as new sanctions on Russian energy took effect, with WTI crude settling at $77.33 per barrel. On Sunday, OPEC+, or the Organization of the Petroleum Exporting Countries and its allies, including Russia, stayed the course on planned production cuts.
Slack co-founder and CEO Stewart Butterfield is stepping down from Salesforce in January, just a week after co-CEO Bret Taylor announced his resignation. He’ll be succeed by longtime Salesforce cloud executive Lidiane Jones. The news comes less than two years after Salesforce bought Slack for $28 billion. Shares of Salesforce (CRM) closed down more than 7%.
Overseas, Asian equities jumped on Monday after local Chinese authorities downgraded some of their strict COVID policies after public protests last week led to a major shift in Beijing’s commitment to its zero-COVID policy.
Elsewhere, in crypto world, Sam Bankman-Fried said he will testify before the House Financial Services Committee after he finishes “learning and reviewing what happened” in the collapse of FTX, the crypto exchange he founded.
Hoping for a break on your grocery bill next year? Don’t bank on it, new report suggests
Anyone hoping for a break on sky-high grocery bills should brace themselves for a shock in 2023, as the typical family’s food bill for the year is predicted to go up by more than $1,000.
That’s one of the main takeaways of the 2023 Food Price Report, an annual publication by Canadian researchers that looks at factors across the supply chain to attempt to predict what the cost of putting food on the table will be.
Last year, the report predicted that a typical family of four would would spend more than $14,000 to feed themselves for the year — an increase of $966 from the previous year’s level and the biggest one-year jump in the 12-year history of the report.
“Last year we were predicting prices to go up by as much as seven per cent and many, many claimed that those predictions were alarmist,” said Sylvain Charlebois, a professor of food nutrition at Dalhousie University, who headed up the research team. “Yet here we are at 10 per cent.”
While Canada’s overall inflation rate topped out at eight per cent this summer, food prices went well beyond that pace, clocking in at a 10.1 per cent annual gain as of the end of October.
It’s why instead of the $14,767 annual grocery bill forecast a year ago, the typical yearly receipt came in at $15,222.80 for 2022. That means last year’s “alarmist” report was actually undershooting how things would play out by more than $400.
Same issues persist
If those numbers are hard to swallow, prepare yourself for an upset stomach because all the factors that caused food bills to spike last year are expected to stick around into 2023. Charlebois and his fellow researchers say the typical grocery bill is on track to go up by another $1,065 from this year’s record high level.
“There’s absolutely no safe place at the grocery store,” Charlebois said. “You can’t really seek any sort of immunity against food inflation right now.”
According to the report, the typical family of four, with two adults and two adolescent children, can expect to pay $16,288 to feed themselves next year. That’s an increase of up to seven per cent, but some categories will be more expensive than others.
Not all types of food will go up at the same pace. Bakery items, meat and dairy should be in line with the overall rate, while fruit may be a comparable bargain at just five per cent. Vegetables, meanwhile, are expected to go up by as much as eight per cent.
That’s not what Julie Heyland wants to hear. A mother of three in Calgary, she says she couldn’t believe how much her grocery bill ballooned this year, even as the quality and quantity of food she was getting for her money didn’t seem to increase.
She cuts back where she can, but ultimately those ever higher food bills have meant she’s had to change her family’s diet. “In order to stay within our budget now we eat a lot less meat and I definitely shop a lot more sales and plan my menus around what’s on sale,” she told CBC News in an interview. “We’re eating a lot less meat and having more beans and a lot more rice and pasta during the week.”
After a record-setting 2022, meat prices are not forecast to increase at a faster rate than food overall, but consumers should still brace themselves for prices to go up between five and seven per cent next year.
Jeffrey Bloom, a second-generation farmer who raises cattle on a farm in Turtleford, Sask., says he knows as much as anyone that prices for meat have skyrocketed this year, but the amount he gets per pound has barely budged, even as his costs have doubled.
After the record-setting run up in grain prices, cattle feed that might have once cost $300 a tonne is now going for $525, but he knows if he passes on that cost he’ll lose customers. “We’re looking at inflation rates of 75 per cent, which is almost unheard of, and it really cuts into your bottom line,” he told CBC News in an interview.
He recently saw an eight-pound prime rib selling at a meat counter for $200. “Well, $25 a pound is almost unreasonable for people to pay [but] we’re not seeing that kind of price ourselves, there’s a lot of in-between stuff where the inflation happens, with trucking costs and people just trying to make a living.”
If he passed on his cost increases dollar for dollar he’d lose customers, so the challenge for food makers like him is “fighting the growing costs to sell the same products that everybody wants cheaper because they’re paying for it over the counter.”
While some of the factors that pushed up food prices have been lessened by Bank of Canada rate hikes aimed at reining in inflation, a lot of the factors making food more expensive are global in nature, and beyond the central bank’s influence.
The Russian invasion of Ukraine in February sent prices for everything from oil to grain to their highest levels in decades, for example.
The good news, Charlebois says, is that while consumers should brace for high prices to stick around at least into the early part of the year, he is expecting some of those increases to ease in the second half of the year as the global economic situation changes.
“We’re not expecting prices to drop, but we are expecting the food and inflation rate to to stabilize somewhat,” he said.
Supply chain bottlenecks are starting to move again, and the price of gasoline has fallen precipitously, which makes it cheaper to ship food across the country. On the other hand, a slowing economy could push down the loonie, which will hit grocery shoppers hard since so much of what Canadians eat comes from outside the country, especially in the winter months.
But when you add up all the factors at play, Charlebois says the long-term outlook is better than the short-term one. “Eventually all of these discounts up the food chain will catch up to consumers and we’ll see that at the grocery store,” he said.
Those discounts can’t come fast enough for Nisha Shringi and Vineet Saluja. The couple recently moved to Toronto from Burnaby, B.C., with their two children, and while they were expecting their cost of living to increase, the uptick in what it costs to feed themselves has taken their breath away.
“The costs have increased everywhere,” Shringi said. “It’s crazy.”
Where they once might have enjoyed a restaurant meal out two or three times a month, and treat themselves to the odd fancy coffee at a local cafe once in a while, they’ve completely eliminated luxuries like that from their budget, because they need every penny to keep food on the table.
“We have definitely cut down on things that are not necessary,” she said. “We are just sticking to the essential items —absolute basic necessities.”
What can be done?
It sounds counterintuitive, but Charlebois says the spectre of recession might be what it takes to bring prices down, since consumers saying “no thanks” to expensive food items would bring prices down faster than anything else could.
“With an economic slowdown you will see fewer people willing to pay $30 for a steak and that really will help eventually.”
In the meantime, his advice for anyone looking to slash their grocery bill is the same as it was last year: use food apps to scour for sales, clip coupons to be on the lookout for bargains, and always keep an eye out for price cuts on food that’s about to go past its best before date.
“You’re going to have to work for your deals,” he said. “You’re going to have to work for those discounts.”
Food delivery robots hit Canadian sidewalks, but many challenges delay mass adoption
When customers in downtown Vancouver placed orders with Pizza Hut in September, many of the pies landed on their doorsteps without a courier in sight.
Instead, diners were met by Angie, Hugo or Raja — autonomous robots resembling a cooler on four wheels with eyelike lights. They travelled by sidewalk to customers, who used unique codes to open their lids and reveal their food.
The value proposition for Serve Robotics — a spinoff of Uber’s 2020 food delivery acquisition Postmates that created the trio and a fleet of zero-emission robots — is simple: with slim restaurant margins, a labour crunch and climate change worries ‘”why move a two-pound burrito in a two-ton car?”
A handful of other robotic delivery companies have the same ethos, but their paths to ubiquity are facing several roadblocks.
Delivery robots have been banned from some major cities like Toronto, which argued they are a hazard for people with low mobility or vision, as well as seniors and children. Cyclists already gripe about e-scooters in bike lanes and don’t want robots there either.
“They’re drawing a lot of attention from pedestrians while they’re out on the sidewalk because they’re not seeing them that often and people are excited to see them, but as usage continues to increase, this can cause a lot of congestion on already narrow sidewalks,” said Prabhjot Gill, a McKinsey & Co. associate partner focused on retail.
There’s also worries autonomous robots or ones manned by staff overseas will take jobs away from couriers.
Ali Kashani, Serve’s Vancouver-bred chief executive, considers the criticism to be a natural part of innovation that even the bicycle experienced, when it was invented and many thought it would cause divorce.
He’s tried to quiet concerns by ensuring his robots (Kashani won’t say how many there are) chime and flash their lights to alert people they are around. They are equipped with automatic crash prevention, vehicle collision avoidance and emergency braking.
Ultimately, he thinks they are “a win-win for everybody” because they reduce traffic, boost local commerce and help merchants get food to consumers in a less expensive way.
The environment benefits too because Serve replaces delivery vehicles. Kashani estimates roughly half the deliveries made in the country cover less than 2.5 miles and 90 per cent are completed by car. About two per cent of global greenhouse gas emissions worldwide are attributable to people using personal cars for local shopping and errands.
“There’s a lot of reasons to replace our cars with these robots as quickly as we really can, but there’s no reason for us to make anyone an enemy,” Kashani said.
Knowing how much opposition new ideas can face, Serve is careful to engage with governments and authorities before launching in a city, even if it has no legislation allowing or banning robots.
However, David Lepofsky, chair of the Accessibility for Ontarians with Disabilities Act Alliance, said there’s no way for such robots and humans to coexist because they will always present a tripping hazard and worse, they could be used to transport contraband or explosives.
He insists the fight he and others have waged to keep robots off sidewalks is not an attack on innovation.
“It’s not like we’re denying people a service,” he said. “We’ve got a way to deliver pizzas that we’ve had since we’ve had pizza delivery. It’s called human beings.”
Manish Dhankher, Pizza Hut Canada’s chief customer officer, agrees no pizza delivery is worth risking somebody’s safety, but said his company only partnered with Serve once the robots had made thousands of injury-free trips.
Serve robots only made nearby deliveries for Pizza Hut’s 1725 Robson St. location for two weeks, but the pilot generated “childlike excitement” from customers and had a 95 per cent satisfaction rate.
Dhankher stresses the goal was modernizing pizza deliveries, not cost reduction. Couriers made the same number of deliveries they did before the robots were in use.
But Pizza Hut isn’t ready to roll out robots permanently.
“We want to learn more,” he said. “What happens when you put this in the snowy areas of Saskatchewan and what happens when there is freezing rain?”
Another question: what happens when cities won’t welcome the robots?
Tiny Mile, a company behind a series of pink, heart-eyed robots named Geoffrey, knows the answer.
Years after Geoffrey started making Toronto deliveries for delivery services like Foodora, Lepofsky and others argued people may be impeded by stopped or stalled devices or unable to quickly detect their presence.
Toronto’s city council voted last December to prohibit the devices that run on anything but muscle power from sidewalks, bike paths and pedestrian ways until the province implements a pilot project for such devices.
Geoffrey was then spotted in Ottawa before the city confirmed such robots aren’t permitted there either and Tiny Mile decamped from Canada completely.
“We almost went bankrupt,” said Ignacio Tartavull, Tiny Mile’s chief executive.
“It was basically a miracle we survived.”
To keep Geoffrey alive, Tiny Mile headed to Florida and North Carolina.
“It was love at first sight,” Tartavull said. “We spoke with cities and they were basically competing for us to go there.”
He believes that adoration will spread as the cost of robot deliveries — now roughly $1 — sink to 10 cents in the next seven years.
“It’s likely going to take a few years before we have it in the big cities but in the long term, it’s kind of undoubtable because the technology is here, it works and we can deliver on time and at a much lower cost,” he said.
As for Serve, it’s focused on Los Angeles right now, but Kashani said its mission is to get five per cent of delivery vehicles off the road in the next five years.
“But I definitely hope that if you fast forward one or two decades, these robots would be doing more local transportation of goods… so that we can not rely on cars.”
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