Business

The Fallout From Musk’s Profanity-Laden Attack on Advertisers Isn’t Over


On Thursday was meant to be a big day for Tesla and its investors, as the electric vehicle maker finally began delivering to customers its much-ballyhooed Cybertruck pickup — its first new model in more than three years.

Instead, Tesla’s shares fell nearly 2 percent. Some of that loss may be because of disappointing news about the Cybertruck’s pricing and availability. But some may also reflect renewed concern about Elon Musk’s latest comments, made at the DealBook Summit this week, and whether his self-inflicted damage at X is distracting from his other businesses.

Advertisers aren’t impressed by Musk’s recent tirade. On Wednesday, he asserted that brands were trying to “blackmail” him by suspending their advertising after he endorsed an antisemitic conspiracy theory on X. “Don’t advertise,” he said, before using an expletive for emphasis.

At least a half-dozen marketing agencies said that their clients would keep their ad campaigns off the site, while others had begun to counsel clients to also pull back. “There is no advertising value that would offset the reputational risk of going back on the platform,” Lou Paskalis, the founder and C.E.O. of AJL Advisory, a marketing consultancy, told The Times.

That has renewed concerns about the fate of X, which may lose up to $75 million in ad sales — its primary source of revenue — by year-end amid such controversies. The heightened tension is only making life more difficult for Linda Yaccarino, X’s C.E.O., as she attempts to revive the company’s embattled finances. (That said, in an internal memo on Thursday she praised Musk’s comments as “candid and profound” and urged employees “​​not be distracted by sideline critics who don’t understand our mission.”)

Musk’s crude remarks signal that he’s willing to let X die from an advertiser boycott, in what he suggested was martyrdom in the name of free speech. He did hint that X could eventually make money from licensing its trove of content to tech companies to train artificial intelligence models. But that’s a risky bet and it’s unclear how much money that would raise.

Some shareholders in the privately held X, including the billionaire financier Bill Ackman, may be unfazed by Musk’s comments. But other stakeholders — including the banks that still hold billions in debt tied to his $44 billion takeover of the company — probably feel less sanguine.

Musk’s latest antics may be a distraction for his other businesses. The White House has already criticized the billionaire over the antisemitism uproar. The federal government is a major customer of SpaceX, Musk’s rocket company. And Tesla shareholders had called out Musk over that earlier incident: One prominent investor, Ross Gerber, last month decried the mogul’s “outrageous” behavior and “the damage he’s caused to the brand.”

How lasting that damage will be remains unclear. The U.S. government still depends heavily on SpaceX and its Starlink satellite internet service. And Gerber, who has already said he hasn’t sold his Tesla stock, hasn’t weighed in on Musk’s advertiser comments. Instead, Gerber touted the features of the Cybertruck.

An Emirati fund teams up with Wall Street giants on climate investments. Lunate Capital, a fund with $50 billion in assets controlled by Abu Dhabi’s royal family, is expected to announce a partnership with BlackRock, Brookfield Asset Management and TPG to invest in green projects. In related news, the world’s richest countries agreed at the COP28 climate summit in Dubai to a new disaster relief fund for poorer vulnerable countries.

OPEC Plus countries announce more oil production cuts. The cartel said it would reduce output by about 700,000 barrels, or 1 percent of global production, per day in an effort to prop up sinking oil prices, drawing a rebuke from the White House. Still, the price of Brent crude is down this morning as investors remain worried about slowing global demand.

Combat has resumed in Gaza. A weeklong cease-fire ended on Friday after Israel, citing rocket fire from Gaza, resumed strikes on the territory even as international mediators were working to revive the truce. Meanwhile, The Times reports that Israeli military and intelligence officials had obtained a battle plan for Hamas’s Oct. 7 attack more than a year in advance.

Meta is said to be bringing its Threads app to the E.U. The tech giant is expected to introduce the app, its rival to the X social network, as soon as this month, The Wall Street Journal reports, in the biggest expansion of the service since Threads debuted in July. In other social media news, a Montana judge temporarily struck down a statewide ban on TikTok.

Disney’s C.E.O., Bob Iger, said at the DealBook Summit this week that his media giant had made too many movie sequels. But his company is now wrapped up in the corporate equivalent of one.

The financier Nelson Peltz, who runs the activist investment firm Trian, formally announced a fight for representation on Disney’s board, nearly a year after ending a similar battle. The question is how this effort will land with investors.

Peltz took aim at Disney’s stock performance, noting that the company had lost about $70 billion in market value since he abandoned his previous effort to win a board seat. He added that the addition of two new directors — James Gorman, the outgoing C.E.O. of Morgan Stanley, and Jeremy Darroch, the former head of the British media company Sky — had improved Disney’s corporate governance, but not enough.

Left unsaid: The specific actions that Peltz wants Disney to take. (C.E.O. succession is an issue that Peltz has raised before; in appointing Gorman as a director, Disney noted how he had won praise for his handling of the issue at Morgan Stanley.)

Disney has defended its performance, saying on Thursday that it is on track to save about $7.5 billion in costs, more than initially forecast. And at the DealBook Summit, Iger said that he has had to grapple with unexpected challenges, “some that were brought on by decisions that were made by my predecessor, some that are just basically the result of a tremendous amount of disruption in the world and in our business.”

Disney also criticized Peltz’s partnership with Ike Perlmutter, the former chairman of Marvel Entertainment who is one of the company’s biggest individual shareholders.

The company noted that shares held by Perlmutter, who was laid off this spring after clashing for years with other Disney executives, represent 78 percent of the stock that Peltz says he controls. Perlmutter’s “longstanding personal agenda” against Iger raised questions about Peltz’s campaign, since that motivation “may be different than that of all other shareholders,” Disney said.

At least one Disney investor appears worried about Peltz’s campaign. Blackwells Capital said that it was “concerned that Trian’s campaign prioritizes Mr. Peltz’s ego over what is best for all Disney shareholders, and that its latest effort may cost Disney shareholders upwards of $50 million.” (The size of the Blackwells stake is unclear.)


Gavin Newsom, the Democrat governor of California, in a Fox News debate with Gov. Ron DeSantis of Florida last night. Newsom dropped the zinger suggesting that DeSantis would inevitably drop out of the race for the Republican presidential nomination because he was so far behind Donald Trump in the polls.


Global stocks look set to extend their winning streak on Friday, with European markets in the green and Dow Jones industrial average futures pointing to a positive open.

And a rally in debt markets is continuing after U.S. bonds capped off their best monthly performance since 1985, according to Deutsche Bank, in a sign that investors are growing more hopeful that interest rates have peaked.

Investors had a good November. The S&P 500 broke a three-month losing streak, gaining 8.9 percent, its best monthly rise since the pandemic rebound of 2020. Fears of a wider war in the Middle East have eased, which has pushed down crude prices, while a raft of inflation data from both sides of the Atlantic shows prices are moderating.

Inflation hawks got more good news on Thursday when the Personal Consumption Expenditures report, an inflation measure closely watched by the Fed, showed price rises cooling.

Market watchers are betting that central banks are done raising rates. Some now even see the Fed cutting its prime lending rate by its May policy meeting. With borrowing costs expected to fall, investors have poured back into risky assets. The Nasdaq 100, a collection of big tech stocks, rose roughly 11 percent last month.

It’s not all rosy. Many economists are worried about slower global growth next year. And analysts at JPMorgan Chase see a host of risks, including political uncertainties — there are dozens of national elections taking place worldwide next year, including the race for the White House — that could push stocks lower over the next 13 months.

Can the rally last? A big test could come later on Friday, when Jay Powell, the Fed chair, will deliver a speech that may reveal any concerns he has about the latest surge in asset prices.

“Market moves have been so great since he suggested that tight financial conditions were doing some of the Fed’s job for them (November 1st) that you have to think he will address the subsequent moves and either push back or endorse,” Jim Reid, a strategist at Deutsche Bank, wrote to investors this morning.

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