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THE HEADLINES
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SLAP ON THE WRIST SECURED
Elon Musk, Tesla, and the fun police at the Securities and Exchange Commission have already settled a suit filed on Thursday stemming from Musk’s infamous “funding secured” tweet back in early August. Musk and Tesla will each pony up $20M. A small price to pay for a man with an estimated net worth of $22B.
As part of the agreement, Musk will be allowed to stay on as CEO of Tesla but will have to give up his post as chairman of the board for at least three years. Tesla will also be forced to appoint two independent board members and hire a social media “handler” for Musk.
Of course, this comes less than 48 hours after the windbreakers went nuclear on Musk, threatening to bar him from leading a public company should he decide to fight the case and come out on the wrong side of the verdict.
Musk’s lawyers cited the interest of Tesla and shareholders as the reason for bending to the will of Johnny Law. It’s worth noting that Elon was offered a plea deal earlier in the week but decided “I got a few dollars, I could fight the case.” Channeling his inner Jay sent shares down 11% on Friday costing shareholders millions of dollars.
Water Cooler Talking Point: “How badly did the SEC want to fine Musk $420M?”
GIVE IT AWAY, GIVE IT AWAY, GIVE IT AWAY NOW
iStockphotoPeople who said for years that they were going to delete their Facebook accounts probably wished they had after another hack was announced by Zuck and Co. on Friday. 50M accounts, including Zuck himself, were affected by the breach.As of now, the hackers have not been identified, but they likely accessed user data via access tokens. According to the social network’s spokespeople, using the “View as” feature, hackers were able to access tokens that act as keys to a users’ account. The bad actors didn't only breach FB accounts, but also services that use Facebook login including Tinder, Spotify, Airbnb, and Instagram.Under recently implemented GDPR rules, Facebook may be required to pay up to 4% of their global revenue or $23M, whichever is higher. That being said, Facebook’s fines could reach upwards of $1.63B, if it’s proven that proper protection steps were not taken.Water Cooler Talking Point: “I miss the days when getting unwanted Farmville requests was my biggest worry when I’d log into Facebook." MENAGE A TROIS I love the smell of free trade acts in the morning.The US and Canada have reportedly finalized a deal as part of a trilateral Nafta agreement with Mexico coming just hours before an end of month deadline.The final iteration hashed out some lingering contentious issues including greater market access for U.S. suppliers into Canada’s dairy market as well as Canada agreeing to limit auto exports to the US.Final documents will now go to Donny Politics and Justin Trudeau for review and signature. JT has allegedly called a late-night cabinet meeting, presumably to perfect his John Hancock.Initial talks broke down at the end of last month as the US inked a deal with Mexico but couldn't come to terms with Canada.Water Cooler Talking Point: “Seems completely rational to put an arbitrary month-end deadline on a deal that will have lasting implications across three major world economies." IN OTHER NEWSiStockphoto
- Good news for Geoffrey the Giraffe. In an unprecedented move, PE firms Bain Capital and KKR plan to fund a $20M Toys R Us employee severance pool. Bain and KKR took Toys R Us private in 2005 and oversaw its demise. Legally the two private equity firms have no obligation to do so, but public pressure is mounting after 33k employees lost their jobs and never saw a penny of promised severance.
- Husky Energy from the top rope. Husky, one of Canada’s largest energy companies, has made a hostile C$6.4B (including debt) bid for Canadian oil sands producer, MEG Energy. The issue? CNOOC, the Chinese energy giant owns about 12% of MEG and plans to do its best to make Husky wish it was never incorporated.
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