Early last week, Elon Musk took to Twitter and said that funding to take Tesla private at $420/share was secured. In the wake of Musk’s tweet, Tesla shares immediately jumped by more than 10%, effectively putting some serious pressure on Tesla short sellers in the process. As we would later find out, funding for Musk’s plan was not, in fact, secured in any sense of the word.
Before long, accusations that Musk engaged in blatant stock manipulation began making the rounds. Not surprisingly, the bizarre tweet put Tesla’s mercurial CEO in hot water, with the SEC last week even launching a preliminary investigation into the matter. The SEC, though, could be the least of Tesla’s worries.
According to Charles Gasparino of Fox Business News, Tesla board members are far more anxious about what a deluge of class action lawsuits against the company would mean for the company’s bottom line. Gasparino notes that Tesla’s legal team has determined that the fallout from Musk’s tweets could cost the company millions in legal fees and potentially billions in damages from investor lawsuits. Interestingly enough, Tesla has reportedly already hired three outside law firms to handle impending suits.
“One of their main worries,” Gasparino said earlier today, “in addition to the SEC, is the private litigation, and they’re starting to think about how much potential liability exists in the private litigation if investors sue, claiming that they lost money based on Musk’s tweet.”
Whereas the SEC could slap Tesla with fines that range in the millions of dollars, private litigation could potentially impact Tesla to the tune of billions of dollars. Compounding matters is that if Tesla reaches a deal with the SEC, the deal could call for an admission of guilt on Tesla’s behalf. Should that happen, Gasparino explains: “That will ramp up the litigation even more, and that’s one of the things that the lawyers inside the company are really worried about.”
One day, there will be no worlds left for Amazon to conquer, as it slowly absorbs every industry on the planet. Today is not that day though, as Bloomberg reports that Amazon is one of several potential suitors in the running to acquire the Landmark Theaters chain of brick-and-mortar movie theaters.
Sources tell Bloomberg that 2929 Entertainment, backed by billionaires Mark Cuban and Mark Wagner, are currently in talks with a range of companies regarding the sale of the theater chain. Founded in 1974, Landmark Theaters focus on independent and foreign films. 2929 Entertainment bought the chain in 2003 for about $80 million, and although it is now looking to sell, nothing has been finalized and the talks might not end up going anywhere.
Compared to how much it spent on Whole Foods last year (nearly $14 billion), the price for the theater chain would be significantly cheaper. With over 50 theaters and 250 screens in major markets like New York, Chicago, Los Angeles, and San Francisco, the acquisition would not see Amazon suddenly overtake the likes of AMC or Cinemark, but it would provide Amazon dozens of physical location in which to showcase its original movies.
As Bloomberg points out, Amazon spends billions of dollars every year on the production of movies and TV shows, which are free to access for all Amazon Prime subscribers. Amazon didn’t respond when reached for comment, but regardless of its specific plans for the theater chain, the acquisition seems like a no-brainer at the right price.
Back in April, Cuban told The Hollywood Reporter that he was in “no rush to sell,” so this is far from a done deal. That said, if Amazon makes it happen, it could be the first studio to also run its own theaters, as the government said last month that it is considering overturning a 70-year-old settlement blocking the integration of the two. The “Paramount decree” makes it difficult for small films to get distribution, but Amazon could change that.
This could get interesting. Twitch has reportedly been approaching big stars like Will Smith about streaming live, and it’s likewise been quietly making overtures to a variety of top YouTube talent. Twitch CEO Emmett Shear in a recent staff meeting said he wants to hit $1 billion in ad sales, which would double the current sales figure. And the company is talking to creators like Rafi Fine, who with his brother runs high-profile YouTube channels through their Fine Brothers Entertainment, about making original shows for Twitch.
All of that, because Amazon-owned Twitch badly wants to go way beyond video game livestreams, which the service is currently known for. Because the service is gearing up to make a run directly at YouTube — indeed, to be the next large video service aimed at a mass audience.
Since it’s Amazon that owns the deep pockets behind this, this is not an insignificant threat looming in YouTube’s shadow. We reported just Monday, in fact, that YouTube is trying to keep creators happy by flat-out paying some of them, while trying to make its community of creators as a whole more aware of YouTube’s new monetization tools.
Now comes a Bloomberg report today noting that Amazon and Twitch are aggressively signing up livestreaming deals with “dozens” of big media figures and companies currently on YouTube. Some of those deals, said to be worth a few million dollars a year, have already successfully closed.
“Twitch is offering minimum guarantees of as much as a few million dollars a year, as well as a share of future advertising sales and subscription revenue, according to several people who’ve been contacted by Twitch,” Bloomberg reports. “The company has approached everyone from lifestyle influencer Gigi Gorgeous to actor Will Smith about streaming live. While some talent has resisted a few of Amazon’s terms, such as a minimum number of hours of livestreaming per week, a few deals have closed.”
The piece goes on to remind readers of how far the service has come from when Amazon paid almost $1 billion for it in 2014, at a time when Twitch didn’t let users post videos that weren’t related to gaming. The company in 2015 then introduced Twitch Creative, geared toward livestreams from non-gamers like artists, and it’s also broadcast everything from live sports to old Saturday Night Live episodes.
YouTube, to be sure, has also brought some of this on itself. Proving once again the wisdom of that old saying about how money talks and the other stuff walks, many creators have been looking for a new place to take their work after YouTube in May tested out a non-chronological video order in subscriber feeds and moved to aggressively de-monetize videos with problematic content.
There is nothing remotely normal about Elon Musk’s bid, revealed last week on Twitter, to take Tesla private. He’s already being sued by investors and reportedly investigated by the SEC thanks to the highly weird ways that information about this merger have trickled out, and his supposed funding from the Saudi government seems far from “secured” at the moment.
But as Bloomberg points out, even if everything else plays out per Musk’s plan, there’s going to be another sticking point: the Committee on Foreign Investment in the US, a government panel that reviews takeovers of American companies by foreign entities through a national security lens. The Trump administration already torpedoed one big takeover of a US tech company in the last year, and there’s everything to suggest that the Saudi government taking over a major US tech company would raise some eyebrows too.
Bloomberg explains just how much a Saudi-led privatization — even if that didn’t involve the Saudi government acquiring a majority stake in Tesla — would fall under CFIUS’s purview:
While the structure of any investment is unknown, CFIUS has authority in some circumstances to examine foreign investments in U.S. companies even when the buyer isn’t acquiring a majority stake. The new law enacted by Trump Monday broadens the panel’s jurisdiction to examine a wider universe of investments.
The law also establishes mandatory reviews of deals involving “critical technology” when a foreign government has a “substantial interest” in the investor making the acquisition. That provision, which was seen largely directed at China, doesn’t take immediate effect, according to lawyers.
The Trump administration has already signaled that it views the strength of the auto industry as a matter of national security. Regardless of what you think of Tesla, it’s certainly the only American automaker that has shown signs of a breakout in the last few years. With Tesla already investing in an overseas factory in partnership with China, it’s easy to see the administration intervening to keep Tesla in American hands — no matter how skeptical those hands might be.
T-Mobile just took the wraps off its latest Un-carrier move, and it’s not what anyone was expecting. Instead of rolling out changes to its phone plans or a new TV streaming service, T-Mobile is radically changing the structure of its customer service department.
The new initiative is called “Team of Experts,” and at its core, it’s a 30-40-strong team of dedicated customer service representatives who will serve each account. That means when you call T-Mobile’s customer service, you’ll be directly connected with someone from your own “Team of Experts” without going through an automated voice recognition system, or in theory without being transferred around between departments.
From the sounds of things, T-Mobile is going to solve two of the real pain points for customers with Team of Experts: customers will get directly through to a human when they call customer support, and that human will be one one member of a small(ish) team that doesn’t change. Lines will be open 24/7, and T-Mobile is also taking communication outside of just phone calls: There’s also asynchronous messaging in iMessage and the T-Mobile app, so you can send a live chat message, close the app, and come back to it whenever you want.
Of course, there are going to be trade-offs, like wait times. One big reason that most companies nationally pool their call-center resources is because it can help keep wait times to a minimum. Unless T-Mobile is planning on having thousands of customer service reps sitting idle most of the time, wait times for your local team are going to exist. T-Mobile says that it’s going to solve that by giving you a choice of how you wait for service, and says that the default option will be a call-back, rather than letting you wait on hold.
Team of Experts goes live nationally today, although there’s still an option to use an automated system if you prefer. Better customer service isn’t traditionally the kind of change that’s been able to attract hundreds of thousands of new customers, but with the focus in telecoms on reducing “churn,” or turnover of customers, better customer service could really help existing customers to stick around.
“‘Your call is important to us’ are the six emptiest words ever robo-spoken,” said John Legere, CEO of T-Mobile. “People are fed up with horrible customer service that puts cost control ahead of customer happiness. While other brands mechanize customer service, we’re going the other way – no bots, no bouncing, no BS. With Team of Experts, we’re tearing up the traditional playbook, killing the phone menu and putting people at the center of customer care, like they should be. Because at T-Mobile, our customers have always been rock stars to us.”