US Business

Twitter shares tumbled Monday as Elon Musk issued a mocking, defiant commentary about a looming court battle after he ditched a $44 billion buyout of the social media giant.

About 60 minutes into trading Monday, Twitter shares sank 7.0 percent to $34.24.

After weeks of threats, Musk on Friday pulled the plug on the deal, accusing the company of “misleading” statements about the number of fake accounts, according to a letter from his lawyers included in a US securities filing.

In his first public remarks since the announcement, Musk took to Twitter late Sunday night to troll the company after it said it would sue to enforce the deal. 

“They said I couldn’t buy Twitter. Then they wouldn’t disclose bot info. Now they want to force me to buy Twitter in court. Now they have to disclose bot info in court,” Musk wrote in a tweet, with each of the four statements accompanied by pictures of Musk laughing with increasing glee.

A second tweet showed an image of martial arts star Chuck Norris behind a chess board, which Musk captioned, “Chuckmate.”  

Musk’s termination of the takeover agreement he inked in April sets the stage for a potentially lengthy court battle with the company, which initially opposed a transaction with the unpredictable billionaire entrepreneur. 

The original merger agreement contained a $1 billion breakup fee.

Twitter has defended its fake account oversight and said it will sue to force Musk to complete the deal.

The social network says the number of fake accounts is less than five percent, a figure challenged by the multi-billionaire who believes the number to be much higher.

According to several US media reports, Twitter has hired prominent New York law firm Wachtell, Lipton, Rosen & Katz. Twitter declined to comment to AFP.

– Still a chance at deal? –

The latest back-and-forth follows weeks of public squabbling between the sides after Musk amplified the fake accounts issue, with some analysts speculating that he was getting cold feet about a deal announcement that had aroused criticism from progressive advocacy groups concerned about Musk’s political agenda.

Musk’s norm-defying conduct has come as little surprise to longtime watchers of the Tesla boss, who are accustomed to a constant stream of statements that flout or test convention and sometimes provoke a crackdown from regulators.

Some market watchers predicted the deal would fall apart shortly after it was announced, but others still saw a way forward on Monday even in the wake of the latest happenings.

“While the two parties likely are facing a lengthy battle of which the final decision remains very uncertain, we believe Twitter may have the stronger case,” said Morningstar analyst Ali Mogharabi. “We also think that a scenario remains where Musk and Twitter reach a new, lower-price agreement.”

But Mogharabi lowered his estimate for Twitter shares to $47 from Musk’s bid price of $54.20, saying, “we expect Twitter will likely face distractions that set back its efforts to grow revenue and expand margins.”

For analyst Dan Ives at Wedbush Securities, “this is a ‘code red’ situation for Twitter and its Board as now the company will go head to head against Musk in a Game of Thrones court battle.”

“We see no other bidders emerging at this time while legal proceedings play out in the courts.”

French President Emmanuel Macron was under pressure Monday to explain his past support for taxi app Uber while he was economy minister, following media revelations that have been seized on by critics. 

According to investigations by media including France’s Le Monde newspaper and Britain’s The Guardian, Macron held several undeclared meetings with Uber executives while minister from 2014-2016.

Citing leaked internal documents and text messages, Le Monde also alleged that Uber struck a secret “deal” with Macron on regulation of the company’s services at a time when it was upending the traditional taxi market.

Opposition MPs on the left and far-right slammed the president, a former investment banker who positioned himself as a pro-enterprise, pro-innovation politician when named as economy minister. 

Macron was “a lobbyist at the service of foreign private economic interests,” senior far-right MP Sebastien Chenu told France Info radio on Monday morning.

The 44-year-old president was “an ideologue for deregulation, for globalisation,” Chenu added.

Hard-left MP Alexis Corbiere from the France Unbowed party suggested a parliamentary enquiry, which could prove embarrassing for the 44-year-old leader who lost his majority in the National Assembly last month.

“It’s very serious the idea that with this secret pact Mr Macron de-regulated the regulation of the taxi industry,” he told Public Senat television. “What lessons should be drawn?

“Obviously, we’ll ask the questions to the government when we can, and a parliamentary enquiry as well,” he added.

France Unbowed tabled a no-confidence motion against Prime Minister Elisabeth Borne on Monday — which had been planned last week — but it is not expected to pass.

– Uber ‘partner’? –

According to the reports, the “secret deal” entailed Macron promising to help Uber work around legislation introduced in 2014 which sought to regulate the new app-based taxi hailing services.

Le Monde described Macron as “more than a supporter, almost a partner” for Uber over the course of 17 meetings held by him or his staff with company executives.

At the time, the firm faced multiple legal enquiries over its business practices which undercut French labour law and caused sometimes violent protests from traditional taxi drivers.

Macron’s agenda on Monday included a meeting with the heads of multinational investors in France at the annual “Choose France” summit at the Versailles chateau outside Paris.

The biggest announcement was a 5.7-billion-euro ($5.8-billion) investment by French-Italian chipmaker STMicroelectronics and US-based GlobalFoundries.

Around 180 executives are expected, more than in previous years which demonstrated “the very strong interest from foreign bosses after the president’s re-election,” an aide said.

Macron beat far-right veteran Marine Le Pen to win a second term in April, but his allies failed to secure a parliamentary majority last month. 

He is set to give a television interview on Thursday to mark the country’s Bastille Day celebrations and is bound to face questions about Monday’s so-called “Uber Files”.

– Employment –

Contacted by AFP, Uber France confirmed that the company had been in contact with Macron during his time as minister. 

The meetings had been in the normal course of his ministerial duties, which covered the private-hire sector, it said.

The president’s office told AFP that at that time Macron had “naturally” been in contact with “many companies involved in the profound change in services that has occurred over the years mentioned, which should be facilitated by unravelling certain administrative or regulatory locks”.

Macron was a vocal and public supporter of Uber when it arrived in France — contrary to many colleagues in the Socialist government of the time.

He defended it as providing employment for people in low-income areas and as a means of breaking the monopoly held by taxi companies. 

“Go to Stains (a deprived area north of Paris) and tell young people there who are willingly working for Uber that it would be better to do nothing or deal drugs,” Macron argued in an interview with Mediapart in 2016. 

He also found support on Monday among people who remembered the long waits for taxis in Paris and other cities, as well as drivers who refused to take bank cards as payment.

“Fortunately there were ministers and elected figures who questioned all this,” Herve Joly, a sociologist from the CNRS research group, wrote on Twitter.

The Uber Files investigation is based on a leak of tens of thousands of documents to Britain’s Guardian newspaper from an anonymous source, and has been coordinated by the International Consortium of Investigative Journalists.

burs-adp/jh/spm

Argentina’s new economy minister said Monday the country would honor fiscal deficit goals and other commitments made under a deal struck with the IMF to refinance a debt of some $44 billion.

Under the agreement negotiated by Silvina Batakis’ predecessor Martin Guzman, who resigned suddenly nine days ago, Argentina committed to reducing its fiscal deficit from 3.0 percent of GDP last year to 2.5 percent in 2022, 1.9 percent in 2023 and 0.9 percent in 2024.

“The goals agreed with the IMF are maintained,” Batakis said in Buenos Aires at her first press conference since taking office a week ago.

“It is an agreement we signed as a state and we must comply.”

In 2018, under the government of conservative President Mauricio Macri, the International Monetary Fund granted its biggest-ever loan of $57 billion to Argentina.

The country received $44 billion of that amount and Macri’s successor Alberto Fernandez refused to accept the rest.

As the country struggled to repay its debt, a refinancing agreement was reached this year after protracted negotiations.

Guzman resigned suddenly on July 2 amid a power struggle between Argentina’s president and vice president, sparking fresh uncertainty in Latin America’s third largest economy.

The peso fell sharply last Monday against the US dollar after Batakis’ appointment.

On Monday, the 53-year-old said there was a need to “give order and balance to the public finances,” and vowed that “we will not spend more than we have.”

Among her proposals: to reduce energy subsidies, which in 2021 amounted to $11 billion or 2.3 percent of GDP, by applying a sliding scale to prices for gas and electricity based on income.

In 2020, the Argentine economy contracted 9.9 percent before rebounding the following year by 10.3 percent.

For this year, the IMF predicts growth of 4.0 percent.

At the time the refinancing agreement was reached, Argentina’s inflation was projected to reach 52 percent in 2022 — already one of the highest in the world.

Since then, the war in Ukraine has sent prices soaring worldwide, and Argentina marked year-on-year inflation of 60 percent in May.

“The agreement was signed before the rise in global inflation,” said Batakis, adding a new estimate for 2022 was being compiled.

“It is a methodological issue we are evaluating, not a shifting of the goal,” she insisted.

A survey by Argentina’s central bank of projections for 2022 inflation put the rate at some 76 percent.

US President Joe Biden will Monday release one of the first images taken by the James Webb Space Telescope, the most powerful observatory ever sent into orbit and a leap forward in uncovering the secrets of the distant universe.

The unveiling will take place at 5:00 pm (2100 GMT) during a livestreamed event at the White House, official statements said, leaving the space community in a state of keen anticipation.

NASA revealed last week Webb’s first targets included distant galaxies, bright nebulae and a faraway giant gas planet.

The very first image, released by the US president, will be of the “deep field” — an image taken with very long exposure time, to detect the faintest of objects in the distance — according to a person familiar with the matter.

NASA previously said Webb would achieve this shot by pointing its primary imager towards massive foreground galaxy clusters called SMACS 0723, which bend the light of objects far behind them towards the observer, an effect called “gravitational lensing.”

This promises to be what NASA chief Bill Nelson called last month the “deepest image of our Universe that has ever been taken.”

The rest of the first wave of images are set to be released by NASA on Tuesday.

Webb’s infrared capabilities are what make it uniquely powerful, allowing it to both pierce through cosmic dust clouds and detect light from the earliest stars, which has been stretched into infrared wavelengths as the universe expanded.

This lets it peer further back in time than any previous telescope, to the period shortly after the Big Bang, 13.8 billion years ago.

“When I first saw the images… I suddenly learned three things about the Universe that I didn’t know before,” Dan Coe, a Space Telescope Science Institute (STSI) astronomer and expert on the early Universe, told AFP. “It’s totally blown my mind.”

– First targets –

An international committee decided the first wave of images would include the Carina Nebula, an enormous cloud of dust and gas 7,600 light years away.

Carina Nebula is famous for its towering pillars that include “Mystic Mountain,” a three-light-year-tall cosmic pinnacle captured in an iconic image by the Hubble Space Telescope, until now humanity’s premier space observatory.

Webb has also carried out a spectroscopy — an analysis of light that reveals detailed information — on a faraway gas giant called WASP-96 b, which was discovered in 2014.

Nearly 1,150 light-years from Earth, WASP-96 b is about half the mass of Jupiter and zips around its star in just 3.4 days.

Nestor Espinoza, an STSI astronomer, told AFP that previous exoplanet spectroscopies carried out using existing instruments were very limited compared to what Webb could do.

“It’s like being in a room that is very dark and you only have a little pinhole you can look through,” he said of the prior technology. Now, with Webb, “You’ve opened a huge window, you can see all the little details.”

– Million miles from Earth –

Launched in December 2021 from French Guiana on an Ariane 5 rocket, Webb is orbiting the Sun at a distance of a million miles (1.6 million kilometers) from Earth, in a region of space called the second Lagrange point.

Here, it remains in a fixed position relative to the Earth and Sun, with minimal fuel required for course corrections. 

A wonder of engineering, the total project cost is estimated at $10 billion, making it one of the most expensive scientific platforms ever built, comparable to the Large Hadron Collider at CERN.

Webb’s primary mirror is over 21 feet (6.5 meters) wide and is made up of 18 gold-coated mirror segments. Like a camera held in one’s hand, the structure must remain as stable as possible to achieve the best shots.

Charlie Atkinson, chief engineer on the James Webb Space Telescope program at lead contractor Northrop Grumman, told AFP that it wobbles no more than 17 millionths of a millimeter.

After the first images, astronomers around the globe will get shares of time on the telescope, with projects selected competitively through a process in which applicants and selectors don’t know each others’ identities, to minimize bias.

Thanks to an efficient launch, NASA estimates Webb has enough propellant for a 20-year life, as it works in concert with the Hubble and Spitzer space telescopes to answer fundamental questions about the cosmos.

Stock markets and oil prices slid Monday with a fresh Covid flare-up in Shanghai fanning fears of another painful lockdown in China’s biggest city.

European equities headed south following hefty losses for most main Asian markets, and Wall Street followed suit as investors braced for the beginning of the corporate earnings season later this week.

The euro continued to weaken against the dollar, heading towards parity with the greenback for the first time in more than 20 years.

And the European Commission said it would again cut its growth forecast for the current year and hike its expectations for inflation.

“It is no longer a question of if euro-dollar will fall to one, but more a question of how quickly and will it stop there,” City Index analyst Fiona Cincotta told AFP.

“With energy security concerns rising by the day in Europe, a recession seems almost impossible to avoid. Meanwhile, the strong US jobs report means that a 100-basis-point rate hike this month can’t be discounted. The diverging economic outlooks and the significantly more hawkish Fed means that euro-dollar could comfortably fall below parity,” she said.

AJ Bell investment analyst Danni Hewson said “three catalysts… could shake investors out of their torpor as we get the latest reading of US inflation, GDP (gross domestic product) figures from China and the big US banks kick-off the second quarter earnings season across the Atlantic.” 

Traders were keeping tabs on US President Joe Biden as he weighs removing some of the tariffs on Chinese goods worth hundreds of billions of dollars that were imposed by predecessor Donald Trump.

– China growth fears –

The prospect of another lockdown sparked an equities sell-off in Hong Kong and Shanghai on Monday.

Chinese tech firms took a battering after authorities fined giant Tencent and Alibaba over not properly reporting past deals.

Hong Kong-listed casino operators were also sharply lower after officials in Macau embarked on a week-long lockdown to curb its worst coronavirus outbreak.

There were also losses in Sydney, Seoul, Taipei, Manila, Mumbai, Jakarta and Wellington.

However, Tokyo rose as traders welcomed Japan’s ruling bloc securing a strong win in Sunday’s upper house election, held days after the assassination of former premier Shinzo Abe.

The result should provide the government with some stability, while there were also hopes for a cabinet reshuffle and economic stimulus.

Shanghai recorded more than 120 virus cases at the weekend, having seen its first one of the highly contagious BA.5 Omicron strain, forcing officials to launch another mass testing drive.

With China fixated on its zero-Covid strategy to wipe out the disease, there is increasing concern that authorities will revert to another painful lockdown. Shanghai residents only emerged from a two-month confinement in June.

There have meanwhile been new infections uncovered in other parts of the country, including Beijing.

Data this week will provide a fresh update on the economic impact of those measures, as well as similar strict controls in Beijing.

– Key figures at around 1345 GMT –

New York – Dow: DOWN 0.5 percent at 31,181.08 points

London – FTSE 100: DOWN 0.2 percent at 7,178.74

Frankfurt – DAX: DOWN 1.5 percent at 12,823.32

Paris – CAC 40: DOWN 1.1 percent at 5,969.67

EURO STOXX 50: DOWN 1.2 percent at 3,466.34

Tokyo – Nikkei 225: UP 1.1 percent at 26,812.80 (close)

Hong Kong – Hang Seng Index: DOWN 2.8 percent at 21,124.20 (close)

Shanghai – Composite: DOWN 1.3 percent at 3,313.58 (close)

West Texas Intermediate: DOWN 2.3 percent at $102.35 per barrel

Brent North Sea crude: DOWN 2.0 percent at $104.85 per barrel

Euro/dollar: DOWN at $1.0062 from $1.0183 on Friday

Pound/dollar: DOWN at $1.1892 from $1.2034 

Euro/pound: UP at 84.63 pence from 84.59 pence

Dollar/yen: UP at 137.37 yen from 136.10 yen

burs-spm/bp

Twitter stock fell Monday after Tesla chief Elon Musk ditched a $44 billion deal to buy the social media giant.

The platform stock dropped 5.46 percent on Wall Street, to $34.80 by around 7:05 am (11:05 GMT). It had lost 5.10 percent before the weekend.

Musk on Friday pulled the plug on the deal, accusing the company of “misleading” statements about the number of fake accounts, according to a letter from his lawyers, a copy of which was filed with the Securities and Exchange Commission.

Musk’s effort to terminate the deal that he inked in April sets the stage for an epic court battle over a billion-dollar breakup fee.

The social network says the number of fake accounts is less than five percent, a figure challenged by the multi-billionaire who believes the number to be much higher. 

According to several US media, Twitter has hired prominent New York law firm Wachtell, Lipton, Rosen & Katz. Twitter declined to comment to AFP.

After the news broke, Musk tweeted: “They said I couldn’t buy Twitter. Then they wouldn’t disclose bot info. Now they want to force me to buy Twitter in court. Now they have to disclose bot info in court,” accompanied by pictures of him laughing.

For analyst Dan Ives at Wedbush Securities, “this is a ‘code red’ situation for Twitter and its Board as now the company will go head to head against Musk in a Game of Thrones court battle.”

“We see no other bidders emerging at this time while legal proceedings play out in the courts.”