Tesla’s Shanghai Factory May, Or May Not Be, Slowing Down

Slack CEO putting his “away” setting on…forever ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

December 6, 2022

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TOGETHER WITH

Good morning.

Sometimes parents can’t resist using last names as first names, even corporate parents.

CEO David Zaslav and his execs at Warner Bros. Discovery are reportedly ready to rechristen the imminently launching streaming platform combining HBO Max and Discovery+, and they’re keeping it pretty traditional. According to CNBC, Zaslav’s team is heavily leaning towards going with the name “Max,” which will sound familiar to many existing subscribers…and parents at preschools in the early 90s.

Morning Brief

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Glencore says it’s done bribing its way round the world.

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Tesla will NOT cut production in Shanghai.

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Salesforce is bleeding executives.

Commodities

Glencore to pay $180 Million to Democratic Republic of Congo

That’s one expensive apology tour.

Swiss mining and commodities titan Glencore announced Monday that it has reached an agreement with the government of DRC to pay $180 million to make up for ten years of titanically corrupt behavior in the country. This comes seven months after Glencore pleaded guilty to bribery in eight countries including DRC.

Private Jets Full of Cash

Glencore is one of the biggest mining companies in the world, meaning it has long done business with rogue states and other colorful partners, and it also operates one of the most powerful commodities trading desks globally, which allows it to profit twice on said relationships. That has landed the mega-firm in regulatory hot water for decades and is perhaps most famous for being founded by Marc Rich, who is conversely most famous for his 2001 presidential pardon. But Glencore also just enjoyed record profits in the first half of this year, thanks in large part to its coal-mining business benefiting from the disruption to energy markets caused by the Russian invasion of Ukraine.

2022 hasn’t been all smiles and roses for Glencore, however, as the company got hit by a joint investigation by the US, the UK, and Brazil on a variety of accusations that included its oil trading arm hand delivering cash bribes to African nations using private jets — not very green of them. Glencore pleaded guilty to bribery in May, and admitted to conspiring to pay third parties $27.5 million in DRC alone. It agreed to a bouquet of penalties:

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The company agreed in May to cough up a total $1.5 billion in settlements to the US, Brazil and the UK with the US getting the lion’s share of $1.1 billion. Even with that chunk out of its revenue Glencore expects to triple its profits this year compared to 2021.

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Regulatory price tags could continue to mount up, Glencore remains under investigation by authorities in the Netherlands and its home country of Switzerland, to say nothing of the seven other countries the company admitted to bribing its way through.

Work Culture Vulture: Company chairman Kalidas Madhavpeddi said in a statement to the Associated Press Glencore is now committed to a high standard of ethics. “Glencore today is not the company it was when the unacceptable practices behind this misconduct occurred,” said Madhavpeddi. That would take a pretty major overhaul of company culture according to US Attorney Damian Williams, who said in a statement when the company reached its settlement with the DOJ: “Glencore paid bribes to make money – hundreds of millions of dollars. And it did so with the approval, and even encouragement, of its top executives.”

EVs

Tesla Denies Claims It Will Make Fewer Model Ys in China

Tesla

Tesla’s Shanghai plant was like Schrödinger’s car factory yesterday, occupying two possible realities.

On Monday, gossip spread that Tesla would cut back its electric vehicle production in the Paris of the East, but just a few hours later, Tesla denied any plans to slow down.

What’s the Scuttlebutt?

The cutback rumors surfaced over the weekend when Tesla Daily host Robert Mauer suggested production would shrink from 20,000 to 16,000 units per week. Bloomberg corroborated the notion on Monday, saying the Shanghai plant would cut back production of its popular Model Y by 20% compared to last month. Tesla quelled the word on the street by calling it “untrue.” While Tesla denies any slowdown, its China operations have become massively important.

A total of 722,000 electric vehicles were sold in China in October. In November, Tesla hit record numbers there, delivering more than 100,000 units despite strict COVID regulations. By the end of this year, China could be home to nearly two-thirds of the world’s EV sales, meaning an output reduction now would put investors on edge:

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Tesla is facing increasing competition from carmakers BYD and Guangzhou, the former of which greatly outpaced Tesla’s November sales with 229,942 units delivered. In response to the opposition, Tesla has begun offering extended insurance subsidies, reinstating a user-referral program and even advertising on television, a move rarely seen in its playbook.

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In the past few weeks, Tesla has also had to issue multiple recalls. At the end of November, 80,000 cars were recalled for software and seatbelt glitches, and just a few days ago, it recalled 435,000 vehicles for tail light issues.

A Little Birdie Told Us: In other is-this-for-real Musk-related news, Twitter could be joining the crypto market. Rumors are spreading of an upcoming currency known as “Twitter Coin.” Images of a gold coin emblazoned with a white bird and a tipping feature are circulating. It wouldn’t be a surprising move for Musk, an unabashed crypto champion. Tesla once held $2 billion worth of Bitcoin, and on Monday, Musk reactivated multiple Dogecoin Twitter accounts, saying “(Our) team was a bit too intense with spam/bot suspensions. Moving to chill mode.”

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Software

Slack CEO Will Step Down in January

No more morning brush notifications for this guy.

Slack CEO Stewart Butterfield announced Monday he plans to leave the software company a little over a year after Salesforce acquired it for $28 billion, and he’s not alone.

Where’d Everybody Go?

The news comes less than a week after Salesforce co-CEO Bret Taylor announced that he will step down from his position at the end of January. Butterfield, who could have replaced Taylor, said he’s been planning on leaving for months, and that his departure is just “weird timing.” He will be replaced by Lidiane Jone, who worked as VP in Salesforce’s cloud divisions, making her the latest in a long line of possible successors to the seemingly irreplaceable – and somehow still Salesforce CEO – Marc Benioff.

In addition to Butterfield, Slack Chief Product Officer Tamar Yehoshua and Senior Vice President Jonathan Prince will also leave. Salesforce’s share price has dropped nearly 50% year-to-date, and its recent executive exodus might spell more trouble on the horizon:

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The departures come as many businesses look to cut costs in software-as-a-service spending. Salesforce has struggled to increase profits and recently projected revenue growth of 8% to 10% in the current period — which would be the slowest year-over-year increase since it went public in 2004.

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Anurag Rana, a senior analyst at Bloomberg Intelligence, wrote in a note, “(Butterfield’s leaving) could put additional pressure on CEO and founder Marc Benioff to assure investors that the company still has a deep bench of leaders that can revive organic growth, which has seen steady decline in the past few quarters.”

Retention Issue: These are only the latest withdrawals. Tableau, which Salesforce purchased in 2019 for $15 billion, has also experienced dwindling numbers at the top. On Friday, CEO Mark Nelson announced his leaving, and before that, Chief Marketing Officer Jackie Yeaney and and Chief Data Officer Wendy Turner-Williams also left. That’s a lot of Beni-off.

Extra Upside

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This AI can write beautiful sonnets about string cheese.

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Self checkout: Customers hate it, shoplifters love it, and stores want more.

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Pricing in Powell with Options AI. Starting next Tuesday, Fed Chair Jerome Powell will strap in for a two day FOMC meeting where he will decide just how naughty the Fed will be this holiday season. Markets are on a hair trigger, with even the slightest hawkish soundbite likely to wreak havoc. Options AI allows investors to visualize market expectations for the Fed’ announcement, earnings, and more, and generate option strategies with its sleek visual interface. Explore their no-cost tools to see what’s in store for next week.

Just For Fun

Boom.

Smart bear.

Written by Griffin Kelly and Isobel Asher Hamilton.

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