Tag Archives: ESGGOV

Elon Musk starts Twitter poll on whether to bring back Trump

Nov 18 (Reuters) – Elon Musk started a Twitter poll late on Friday asking followers to vote on whether to reinstate former U.S. President Donald Trump’s account on the platform, with early results showing roughly 60% voting yes.

“Vox Populi, Vox Dei,” Musk tweeted, a Latin phrase that roughly means meaning “the voice of the people is the voice of God.” The poll was open for 24 hours.

Musk, Twitter’s new owner, said in May he would reverse Twitter’s ban on Trump, whose account was suspended after last year’s attack on the U.S. Capitol.

Musk said earlier in the day that a decision to bring back Trump’s account was yet to be made, and that Twitter had reinstated some controversial accounts that had been banned or suspended, including satirical website Babylon Bee and comedian Kathy Griffin.

Musk’s decision to ask Twitter users for guidance on who should be on the platform is part of a huge restructuring of the company, including massive layoffs.

In a memo on Friday to remaining employees that was seen by Reuters, Musk asked those who write software code to report to the 10th floor of the Twitter’s headquarters in San Francisco by early afternoon.

The billionaire said in a follow-up email: “If possible, I would appreciate it if you could fly to SF to be present in person,” adding he would be at the office until midnight and would return Saturday morning.

He asked employees to email him a summary of what their software code has “achieved” in the past six months, “along with up to 10 screenshots of the most salient lines of code.”

“There will be short, technical interviews that allow me to better understand the Twitter tech stack,” Musk wrote in one of the emails, and asked engineers to report at 2 p.m. on Friday.

The emails came a day after hundreds of Twitter employees were estimated to have decided to leave the beleaguered social media company following a Thursday deadline from Musk that staffers sign up for “long hours at high intensity.”

The exodus adds to the change and chaos that have marked Musk’s first three weeks as Twitter’s owner. He has fired top management including former CEO Parag Agarwal and senior officials in charge of security and privacy, drawing scrutiny from a regulator.

A White House official also weighed in, saying Twitter should tell Americans how the company was protecting their data.

Tech website Platformer reported on Friday that Robin Wheeler, the company’s top ad sales executive, had been fired.

Wheeler, who told employees in a memo last week that she was staying, tweeted on Friday: “To the team and my clients…you were always my first and only priority”, with a salute emoji that has been adopted as a send off for departing employees.

Twitter told employees on Thursday that it would close its offices and cut badge access until Monday, according to two sources. Reuters could not immediately confirm whether the headquarters reopened.

On Friday afternoon, the company had started cutting off access to company systems for some of the employees who had declined to accept Musk’s offer, three people told Reuters.

Another source said the company was planning to shut down one of Twitter’s three main U.S. data centers, at the SMF1 facility near Sacramento, to save costs.

In his first email to Twitter employees this month, Musk warned that Twitter may not be able to “survive the upcoming economic downturn.” He also said, “We are also changing Twitter policy such that remote work is no longer allowed, unless you have a specific exception.”

Amid the changes, Moody’s withdrew its B1 credit rating for Twitter, saying it had insufficient information to maintain the rating.

Reporting by Hyunjoo Jin and Sheila Dang; Additional reporting by Katie Paul; Writing by Sheila Dang and Katie Paul; Editing by Jonathan Oatis, David Gregorio, Emelia Sithole-Matarise, Daniel Wallis, Sayantani Ghosh and Gerry Doyle

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Musk’s all-nighters at Twitter raise concern for Tesla investors

SAN FRANCISCO, Nov 15 (Reuters) – In 2018, Elon Musk was working through the night and sleeping at Tesla Inc’s (TSLA.O) factories in California and Nevada as the company struggled to ramp up production of the Model 3.

On Monday, Musk said he had worked through the night at Twitter’s San Francisco headquarters and would keep “working & sleeping here” until the social media platform – which he recently acquired for $44 billion – was fixed.

A self-described “nanomanager,” Musk’s penchant for working long hours in moments of crisis has been a well-known part of his brand. But the billionaire’s deep dive into Twitter, after a protracted buyout that he tried to scrap, has some Tesla investors worried about his capacity to focus on his role as CEO of the world’s most valuable carmaker.

“Tesla investors are going to be frustrated,” said Gene Munster, managing partner at venture capital firm Loup Ventures. “He’s probably going to spend more time on Twitter than any Tesla investor feels comfortable about.”

Musk, who is expected to testify in court on Wednesday about whether a $56 billion pay package at Tesla is justified, did not respond to a Reuters email seeking comment.

He tweeted on Monday “I have Tesla covered too,” saying he planned to work at the electric vehicle maker for part of this week. Tesla has an office in Palo Alto, California, and a factory in Fremont, California.

Tesla’s shares have dropped by 50% since early April, when he disclosed he had taken a stake in Twitter. Sales of Musk’s own Tesla shares – totaling $20 billion since he disclosed his Twitter stake – have added to the pressure.

Tesla faces a growing list of challenges from demand concerns in China to a regulatory probe of the claims it makes about the abilities of its “Autopilot” driver assistance technology in the United States.

So far this month, Musk’s tweets about his efforts to reboot Twitter have accounted for more than two-thirds of his postings on the platform he acquired in October, according to a Reuters tally.

Tesla accounted for just 3% of his tweets from Nov. 1 to Nov. 15, down from an average of almost 16% over the previous eight months.

Reuters Graphics

Munster said he expects Twitter to consume Musk’s attention for the next six to 12 months, adding that Tesla was a more developed company than in earlier days and less immediately reliant on Musk.

In recent days, Musk has said his workload has increased significantly after his Twitter buy.

“I have too much work on my plate,” he said by video link to a business conference in Indonesia on Monday, saying he was working “from morning till night seven days a week.”

“Once Twitter is set on the right path, I think it is a much easier thing to manage than SpaceX or Tesla,” Musk said earlier this month at the Baron investment conference, referring to the aerospace company which he also runs.

Tesla investor Ross Gerber, a strong supporter of Musk, said on Tuesday that Tesla needed to find a deputy for its multitasking CEO. “I think he’s finally reached a point where he’s really challenging himself. I think they need to find the right person. And quite frankly, they just don’t have that person.”

‘MINIMAL TIME’

The Tesla board has expressed concerns about Musk’s commitment to SpaceX and several smaller companies. Tesla board chair Robyn Denholm said in a 2018 email that the “minimal time” Musk was spending at Tesla was “becoming more and more problematic,” according to court documents related to his pay trial. A Tesla shareholder says the board failed in approving a $56 billion pay package for him without demanding his full-time attention.

Another board member, Ira Ehrenpreis, noted at trial that Musk was paid for results, not time spent, a view echoed by Musk in a 2021 deposition. At Tesla’s annual meeting in August, Musk responded to a question about “key-man risk” by acknowledging his colleagues, saying “We do have a very talented team here. So I think Tesla would continue to do very well even if I was kidnapped by aliens or went back to my home planet maybe.”

Musk has proven his doubters wrong before and some early investors say they expect him to be up for the Twitter challenge. “When you get an entrepreneur that does all that he’s done, we should just be kissing his feet. The guy is awesome,” billionaire investor Tim Draper told Reuters.

But others have lost patience.

“Musk has managed to do what the bears have unsuccessfully tried for years – crush Tesla’s stock,” Wedbush analyst Daniel Ives, a long-time Tesla bull, said in a note last week.

Ives called Twitter an “albatross,” a “distraction” and a “money pit” for Musk. “The Twitter circus show is slowly starting to impact the pristine EV brand of Tesla,” he said.

Reporting by Hyunjoo Jin in San Francisco and Akash Sriram in Bengaluru
Additional reporting by Aditya Soni and Yurvaj Malik in Bengaluru
Editing by Kevin Krolicki, Ben Klayman, Peter Henderson and Matthew Lewis

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Elon Musk trial opens to decide fate of his $56 billion Tesla pay

WILMINGTON, Del, Nov 14 (Reuters) – A trial opened Monday over shareholder allegations that Tesla Inc Chief Executive Elon Musk’s $56 billion pay package was rigged with easy performance targets and that investors were duped into approving it, with Musk slated to take the stand later this week.

A Tesla (TSLA.O) shareholder hopes to prove during the five-day trial that Musk used his dominance over the electric vehicle maker’s board to dictate terms of the 2018 package, which did not even require him to work at Tesla full-time.

Musk, the world’s richest person, will testify Wednesday, Greg Varallo, an attorney for shareholder Richard Tornetta, told a court in Wilmington, Delaware, on Monday.

The trial began with Ira Ehrenpreis, a Tesla board member since 2007, taking the stand to describe the early years of the company and Musk’s role.

“I was very impressed with his vision for this endeavor,” said Ehrenpreis.

Tornetta has asked the court to rescind the pay package, which is six times larger than the top 200 CEO salaries combined in 2021, according to Amit Batish of research firm Equilar.

Musk and Tesla’s directors, who are also defendants, have denied the allegations. They argued the pay package did what it aimed to do — ensure that the entrepreneur successfully guided Tesla through a critical period, which helped drive the stock tenfold higher.

The case will be decided by Chancellor Kathaleen McCormick of Delaware’s Court of Chancery. She oversaw the legal dispute between Twitter Inc (TWTR.MX) and Musk that ended with his purchase of the social media platform for $44 billion last month.

The Tesla shareholder lawsuit argues that the pay package should have required Musk to work full-time at Tesla. The company’s shareholders have become concerned that Musk is distracted by Twitter, which he has warned might not survive an economic downturn.

Musk told a business conference on the sidelines of the G20 summit in Bali, Indonesia, on Monday that he had too much on his plate at the moment.

Legal experts said Musk is in a better legal position in the pay case than he was in Twitter’s lawsuit, which prevented him from walking away from the takeover.

Boards have wide latitude to set executive compensation, according to legal experts.

However, directors must meet more stringent legal tests if the pay package involves a controlling shareholder, and part of this trial is likely to focus on whether that description fits Musk. While he owned only 21.9% of Tesla in 2018, plaintiffs are likely to cite what is seen as his domineering personality and ties to directors.

In all, 19 witnesses are scheduled to testify, including directors and executives from 2018, compensation experts, and advisors who helped craft the pay package.

The disputed package allows Musk to buy 1% of Tesla’s stock at a deep discount each time escalating performance and financial targets are met. Otherwise, Musk gets nothing.

Tesla has hit 11 of the 12 targets as its value ballooned briefly to more than $1 trillion from $50 billion, according to court papers.

A decision will likely take around three months after the trial and could be appealed to the Delaware Supreme Court.

Reporting by Tom Hals in Wilmington, Delaware; Editing by David Gregorio and Jonathan Oatis

Our Standards: The Thomson Reuters Trust Principles.

Tom Hals

Thomson Reuters

Award-winning reporter with more than two decades of experience in international news, focusing on high-stakes legal battles over everything from government policy to corporate dealmaking.

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EXCLUSIVE At least $1 billion of client funds missing at failed crypto firm FTX – sources

  • FTX founder Bankman-Fried secretly moved $10 billion in funds to trading firm Alameda – sources
  • Bankman-Fried showed spreadsheets to colleagues that revealed shift in funds to Alameda – sources
  • Spreadsheets indicated between $1 billion and $2 billion in client money is unaccounted for – sources
  • Executives set up book-keeping “back door” that thwarted red flags – sources
  • Whereabouts of missing funds is unknown – sources

New York, Nov 11 (Reuters) – At least $1 billion of customer funds have vanished from collapsed crypto exchange FTX, according to two people familiar with the matter.

The exchange’s founder Sam Bankman-Fried secretly transferred $10 billion of customer funds from FTX to Bankman-Fried’s trading company Alameda Research, the people told Reuters.

A large portion of that total has since disappeared, they said. One source put the missing amount at about $1.7 billion. The other said the gap was between $1 billion and $2 billion.

While it is known that FTX moved customer funds to Alameda, the missing funds are reported here for the first time.

The financial hole was revealed in records that Bankman-Fried shared with other senior executives last Sunday, according to the two sources. The records provided an up-to-date account of the situation at the time, they said. Both sources held senior FTX positions until this week and said they were briefed on the company’s finances by top staff.

Bahamas-based FTX filed for bankruptcy on Friday after a rush of customer withdrawals earlier this week. A rescue deal with rival exchange Binance fell through, precipitating crypto’s highest-profile collapse in recent years.

In text messages to Reuters, Bankman-Fried said he “disagreed with the characterization” of the $10 billion transfer.

“We didn’t secretly transfer,” he said. “We had confusing internal labeling and misread it,” he added, without elaborating.

Asked about the missing funds, Bankman-Fried responded: “???”

FTX and Alameda did not respond to requests for comment.

In a tweet on Friday, Bankman-Fried said he was “piecing together” what had happened at FTX. “I was shocked to see things unravel the way they did earlier this week,” he wrote. “I will, soon, write up a more complete post on the play by play.”

At the heart of FTX’s problems were losses at Alameda that most FTX executives did not know about, Reuters has previously reported.

Customer withdrawals had surged last Sunday after Changpeng Zhao, CEO of giant crypto exchange Binance, said Binance would sell its entire stake in FTX’s digital token, worth at least $580 million, “due to recent revelations.” Four days before, news outlet CoinDesk reported that much of Alameda’s $14.6 billion in assets were held in the token.

That Sunday, Bankman-Fried held a meeting with several executives in the Bahamas capital Nassau to calculate how much outside funding he needed to cover FTX’s shortfall, the two people with knowledge of FTX’s finances said.

Bankman-Fried confirmed to Reuters that the meeting took place.

Bankman-Fried showed several spreadsheets to the heads of the company’s regulatory and legal teams that revealed FTX had moved around $10 billion in client funds from FTX to Alameda, the two people said. The spreadsheets displayed how much money FTX loaned to Alameda and what it was used for, they said.

The documents showed that between $1 billion and $2 billion of these funds were not accounted for among Alameda’s assets, the sources said. The spreadsheets did not indicate where this money was moved, and the sources said they don’t know what became of it.

In a subsequent examination, FTX legal and finance teams also learned that Bankman-Fried implemented what the two people described as a “backdoor” in FTX’s book-keeping system, which was built using bespoke software.

They said the “backdoor” allowed Bankman-Fried to execute commands that could alter the company’s financial records without alerting other people, including external auditors. This set-up meant that the movement of the $10 billion in funds to Alameda did not trigger internal compliance or accounting red flags at FTX, they said.

In his text message to Reuters, Bankman-Fried denied implementing a “backdoor”.

The U.S. Securities and Exchange Commission is investigating FTX.com’s handling of customer funds, as well its crypto-lending activities, a source with knowledge of the inquiry told Reuters on Wednesday. The Department of Justice and the Commodity Futures Trading Commission are also investigating, the source said.

FTX’s bankruptcy marked a stunning reversal for Bankman-Fried. The 30-year-old had set up FTX in 2019 and led it to become one of the largest crypto exchanges, accumulating a personal fortune estimated at nearly $17 billion. FTX was valued in January at $32 billion, with investors including SoftBank and BlackRock.

The crisis has sent reverberations through the crypto world, with the price of major coins plummeting. And FTX’s collapse is drawing comparisons to earlier major business meltdowns.

On Friday, FTX said it had turned over control of the company to John J. Ray III, the restructuring specialist who handled the liquidation of Enron Corp – one of the largest bankruptcies in history.

Reporting by Angus Berwick; editing by Paritosh Bansal and Janet McBride

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As Musk focuses on Twitter, his $56 billion Tesla pay goes to trial

WILMINGTON, Del., Nov 7 (Reuters) – As Elon Musk is engulfed in his overhaul of Twitter, the entrepreneur is headed to trial to defend his record $56 billion Tesla Inc pay package against claims it unjustly enriches him without requiring his full-time presence at the carmaker.

A Tesla (TSLA.O) shareholder is seeking to rescind Musk’s 2018 pay deal, claiming the board set easy performance targets and that Musk created the package to fund his dream of colonizing Mars.

Tesla has countered that the package delivered an extraordinary 10-fold increase in value to shareholders.

The trial begins Nov. 14 and will be decided by Kathaleen McCormick on Delaware’s Court of Chancery. She oversaw Twitter’s lawsuit against Musk that ended last month when he agreed to close his $44-billion deal for Twitter, an acquisition which he financed largely with his Tesla stock.

“If Musk loses this pay package in some massive way, I think we can expect to see a lot of things that are going to be really hard to predict, like what happens going forward in terms of how Tesla is run and how Twitter is paid for,” said Ann Lipton, a professor at Tulane Law School.

However, Lipton and other legal experts said the lawsuit by Tesla shareholder Richard Tornetta is going to be much more difficult than Twitter’s case against Musk.

Musk founded and is CEO of SpaceX, one of the world’s most valuable private companies, and founded or co-founded Neuralink, which makes brain implants, tunneling venture The Boring Co, and OpenAI, an artificial intelligence research lab. Last week, he appointed himself Twitter CEO.

‘PART-TIME CEO’

Tornetta’s lawyers argue the 2018 package failed its stated purpose of focusing Musk on Tesla. They portray Musk as a “part-time CEO,” citing his testimony that in 2018 he worked Tuesday, Wednesday and Friday at the electric carmaker and Monday and Thursday at rocket company SpaceX, according to his deposition.

According to the lawsuit, Tesla’s board chair Robyn Denholm said the “minimal time” Musk was at Tesla was “becoming more and more problematic” in a 2018 email to Gabrielle Toledano, who at the time was the Tesla Chief People Officer.

The company has argued the package was not about requiring Musk to punch a clock and be on site specific hours each week, but to hit “audacious” targets, enriching Musk but also shareholders like Tornetta.

The disputed pay package allows Musk to buy 1% of Tesla’s stock at a deep discount each time escalating performance and financial targets are met; otherwise Musk gets nothing. Tesla has hit 11 of the 12 targets as its value ballooned to $650 billion from $50 billion on the back of ramped up Model 3 production, according to court papers.

Musk’s vested grants are worth around $50 billion, according to Amit Batish at Equilar, an executive pay research firm. The grants contribute to his $200-billion fortune, the world’s largest.

Musk’s package of stock grants is larger than the combined pay of the 200 highest-paid CEOs last year – six times over, according to Batish.

The trial is likely to focus on Tornetta’s claims the package was developed and approved by directors beholden to Musk and promoted to shareholders without revealing the first tranches were probable of being met based on internal projections.

BOARD CONTROL

Tornetta’s filings are full of examples of a board controlled by Musk.

For example, Antonio Gracias, described by the plaintiff as a close friend of Musk and who was lead independent director from 2010-19, testified in his 2021 deposition that Musk could sell Tesla if he wanted and the board could not stop him.

“Who worked for who? Does Elon Musk work for the board or does the board work for Elon Musk,” said Minor Myers, a professor at UConn School of Law.

Myers said if the pay package is rescinded, the board could simply create a new one and do so with McCormick’s ruling to guide them.

But circumstances have changed, complicating the process.

“He now owns Twitter. How do they want to factor that in?” said Myers, who added that it will be a challenge to determine how to keep Musk from being distracted by other ventures.

“How much money do they need to put in front of this guy to get his attention,” he said.

Reporting by Tom Hals in Wilmington, Delaware; additional reporting by Hyun Joo Jin in San Francisco
Editing by Noeleen Walder and Nick Zieminski

Our Standards: The Thomson Reuters Trust Principles.

Tom Hals

Thomson Reuters

Award-winning reporter with more than two decades of experience in international news, focusing on high-stakes legal battles over everything from government policy to corporate dealmaking.

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Twitter lays off staff as Musk blames activists for ‘massive’ ad revenue drop

  • Musk looking to axe around half of Twitter’s workforce
  • Employees file class action against Twitter
  • Staff lose access to systems
  • Volkswagen pulls ads

Nov 4 (Reuters) – Twitter Inc started a major round of layoffs on Friday, alerting employees of their job status by email after barring the entrances to offices and cutting off workers’ access to internal systems overnight.

The move follows a week of chaos and uncertainty about the company’s future under new owner Elon Musk, the world’s richest person, who tweeted on Friday that the service was experiencing a “massive drop in revenue” as advertisers pulled spending.

Musk blamed the losses on a coalition of civil rights groups that has been pressing Twitter’s top advertisers to take action if he did not protect content moderation. The groups said on Friday they are escalating their pressure and demanding brands pull their Twitter ads globally.

“In an effort to place Twitter on a healthy path, we will go through the difficult process of reducing our global workforce on Friday,” Twitter said in an email to staff on Thursday evening announcing the cuts that came on Friday, which was seen by Reuters.

The company was silent about the depth of the cuts, although internal plans reviewed by Reuters this week indicated Musk was looking to cut around 3,700 Twitter staff, or about half the workforce.

Staff who worked in engineering, communications, product, content curation and machine learning ethics were among those impacted by the layoffs, according to tweets from Twitter staff.

Shannon Raj Singh, an attorney who was Twitter’s acting head of human rights, tweeted on Friday that the entire human rights team at the company had been cut.

Musk has promised to restore free speech while preventing Twitter from descending into a “hellscape.” However, his reassurances have failed to calm major advertisers, which have expressed apprehension about his takeover for months.

Volkswagen AG (VOWG_p.DE) recommended its brands pause paid advertising on Twitter until further notice in the wake of Musk’s takeover, it said on Friday. Its comments echoed similar remarks from other companies, including General Motors Co (GM.N) and General Mills Inc (GIS.N).

Angelo Carusone, president of Media Matters for America, which is part of the civil rights coalition, said he knew of two more major advertisers that were preparing to announce that they would pause ads on the platform.

Musk tweeted that his team had made no changes to content moderation and done “everything we could” to appease the groups. “Extremely messed up! They’re (civil right groups) trying to destroy free speech in America.”

Speaking at an investors conference in New York on Friday, Musk called the activist pressure “an attack on the First Amendment.”

Twitter did not immediately respond to a request for comment.

ACCESS TO SYSTEMS CUT

Dozens of staffers tweeted they lost access to work email and Slack channels before receiving an official notice, which they took as a sign they had been laid off.

They tweeted blue hearts and salute emojis expressing support for one another, using the hashtags #OneTeam and #LoveWhereYouWorked, a past-tense version of a slogan employees had used for years to celebrate the company’s work culture.

Twitter’s curation team, which is responsible for “highlighting and contextualizing the best events and stories that unfold on Twitter,” had been axed, employees said on the platform. The company’s communications team in India has also been laid off, according to a Twitter executive in Asia.

A team that focused on research into how Twitter employed algorithms, an issue that was a priority for Musk, was also eliminated, according to a tweet from a former senior manager at Twitter.

Senior executives including Vice President of Engineering Arnaud Weber also said their goodbyes on Twitter on Friday: “Twitter still has a lot of unlocked potential but I’m proud of what we accomplished,” he tweeted.

Employees of Twitter Blue, the premium subscription service that Musk is bolstering, were also let go. An employee with the handle “SillyRobin” who had indicated they were laid off, quote-tweeted Musk’s previous tweet saying Twitter Blue would include “paywall bypass” for certain publishers.

“Just to be clear, he fired the team working on this,” the employee said.

Twitter’s head of Safety & Integrity, Yoel Roth, appeared to have kept his job, as did Vice President of Product Keith Coleman, who launched a tool called Birdwatch for users to write notes on tweets they identify as misleading.

Last week, Musk endorsed Roth, citing his “high integrity” after Roth was called out over tweets critical of former U.S. President Donald Trump years earlier. Musk has also tweeted that he likes Birdwatch.

Roth and Coleman did not respond to requests for comment.

DOORS LOCKED

Twitter said in its email to staffers that offices would be temporarily closed and badge access suspended in order “to help ensure the safety of each employee as well as Twitter systems and customer data.”

Offices in London and Dublin appeared deserted on Friday, with no employees in sight. At the London office, any evidence Twitter had once occupied the building was erased.

A receptionist at Twitter’s San Francisco headquarters said a few people had trickled in and were working in the floors above despite the notice to stay away.

A class action was filed on Thursday against Twitter by its employees, who argued the company was conducting mass layoffs without providing the required 60-day advance notice, in violation of federal and California law.

The lawsuit also asked the San Francisco federal court to issue an order to restrict Twitter from soliciting employees being laid off to sign documents without informing them of the pendency of the case.

Reporting by Sheila Dang in Dallas, Katie Paul in Palo Alto, Calif., and Paresh Dave in Oakland, Calif.
Additional reporting by Fanny Potkin, Rusharti Mukherjee, Aditya Kalra, Martin Coulter, Hyunjoo Jin, Supantha Mukherjee and Arriana McLymore
Writing by Matt Scuffham
Editing by Kenneth Li, Jason Neely and Matthew Lewis

Our Standards: The Thomson Reuters Trust Principles.

Paresh Dave

Thomson Reuters

San Francisco Bay Area-based tech reporter covering Google and the rest of Alphabet Inc. Joined Reuters in 2017 after four years at the Los Angeles Times focused on the local tech industry.

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Credit Suisse pays down debt to calm investor fears

  • To buy back up to $3 billion in debt
  • Seen as bid to reassure nervous investors
  • Move comes weeks ahead of planned overhaul
  • Shares up as much as 3% in early trade

ZURICH, Oct 7 (Reuters) – Credit Suisse (CSGN.S) will buy back up to 3 billion Swiss francs ($3 billion) of debt, the embattled Swiss bank said on Friday, making a show of strength as it seeks to reassure investors after a tumultuous week.

The move trims the bank’s debts and is an attempt to bolster confidence after steep falls in its stock price and bonds. Unsubstantiated rumours that its future was in doubt have swirled on social media amid concern it may need to raise billions of francs in fresh capital.

One of the largest banks in Europe, Credit Suisse is embarking on a radical turnaround after losing more than $5 billion from the collapse of investment firm Archegos last year, when it also had to suspend client funds linked to failed financier Greensill.

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Bank executives spent last weekend reassuring large clients and investors about its financial strength, seeking to dispel speculation about its future.

CEO Ulrich Koerner also told staff in a memo that it has sufficient capital and liquidity. read more

But his words only fuelled rumours about the bank, as a social media storm gathered pace, triggering a sell-off of its stock.

The bank said the debt buyback would “allow us to take advantage of market conditions to repurchase debt at attractive prices”.

Investors took heart. Credit Suisse shares gained as much as 3% in early trading on Friday, while the price of its euro-denominated bonds rose.

“It’s an opportunistic move to take advantage of market conditions that might be reassuring to some investors,” said Vontobel analyst Andreas Venditti. “If bought below par, a gain results that will increase capital slightly.”

TROUBLED CHAPTER

Earlier this week, in an unusual step, the Swiss National Bank, which oversees the financial stability of systemically important banks in Switzerland, said it was monitoring the situation at Credit Suisse.

Banks are deemed systemically important if their failure would undermine the Swiss economy and financial system.

The move is reminiscent of a multi-billion-euro debt buyback by Deutsche Bank in 2016, when it faced a similar crisis and doubts over its future.

Dixit Joshi, a former Deutsche executive, has recently joined Credit Suisse as finance chief.

Zuercher Kantonalbank said the bonds are currently trading at a high discount, which allows Credit Suisse to cut debt at a low cost. Analyst Christian Schmidiger said the move was also a “signal that Credit Suisse has sufficient liquidity”.

Credit Suisse said it was making a 1 billion euro cash tender offer in relation to eight euro or pound sterling denominated senior debt securities and another offer to buy back 12 U.S. dollar denominated senior debt securities for up to $2 billion.

The developments unfolded after sources recently told Reuters that Credit Suisse was sounding out investors for fresh cash, approaching them for the fourth time in around seven years.

Under a restructuring launched by Chairman Axel Lehmann, the bank envisions shrinking its investment bank to focus even more on its flagship wealth management business. Chiefly, he hopes to close a troubled chapter for the bank and repair its reputation.

Over the past three quarters alone, losses have added up to nearly 4 billion Swiss francs. Given the uncertainties, the bank’s financing costs have surged.

The bank is due to present its new business strategy on Oct. 27, when it announces third-quarter results.

Rating agency Moody’s Investors Service expects losses for Credit Suisse to swell to $3 billion by year-end, Moody’s lead analyst on the bank told Reuters on Thursday. read more

The bank has also said it is looking to sell its upmarket Savoy Hotel, one of the best-known hotels in Zurich. read more

($1 = 0.9897 Swiss francs)

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Writing by John Revill and John O’Donnell; additional reporting by Amanda Cooper in London; editing by Mark Potter and Jason Neely

Our Standards: The Thomson Reuters Trust Principles.

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Europe’s new club meets without Russia

  • 44 European gather in Prague for symbolic summit
  • Energy and security high on everyone’s minds
  • Truss’ participation gives hope for better EU-UK ties
  • Doubts about viability of wide European format
  • EU 27 to follow with their own summit, gas cap on the menu

PRAGUE, Oct 6 (Reuters) – The European Union and its neighbours from Britain to Turkey met on Thursday to discuss shared security and energy problems stemming from Moscow’s invasion of Ukraine in a rare and symbolic summit of 44 European countries – but not Russia.

The Prague gathering is the inaugural summit of the European Political Community (EPC), a format that is a brainchild of French President Emmanuel Macron and brings together the 27 European Union members with 17 other European countries.

Some of them are waiting to join the bloc while another, Britain, is the only one ever to leave it.

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“All those who are gathered here know: Russia’s attack on Ukraine is a brutal violation of the peace and security order that we had over the last decades in Europe,” said German Chancellor Olaf Scholz.

“We don’t accept that part of a neighbouring country is annexed.”

His comments were echoed by Belgium’s Prime Minister Alexander De Croo, as well as the top EU diplomat, Josep Borrell.

“This meeting is a way of looking for a new order without Russia. It doesn’t mean we want to exclude Russia forever, but this Russia, (President Vladimir) Putin’s Russia, does not have a seat,” said Borrell.

British Prime Minister Liz Truss, after meeting the summit’s host, Czech Prime Minister Petr Fiala, stressed their “strong agreement on the importance of likeminded European democracies presenting a united front against Putin’s brutality”.

Her decision to attend the summit left some hoping for a warmer tone between the EU and London after Brexit, where the two are still in disagreement over trade issues around Northern Ireland.

The gathering at the sprawling Prague Castle is seen by its advocates as a grand show of solidarity for a continent mired in multiple crises from the security fallout of Russia’s war in Ukraine to dire economic consequences including an acute energy crunch.

Macron said his priority was to build more electricity connections in Europe, and lower gas prices.

“We share a same space. Very often, the same history. And we are meant to write our future together,” he said. “I hope we will be able to get common projects.”

NO DECISIONS

Beyond lofty declarations, there were doubts about the forum’s concrete goals and actions.

Latvia’s Prime Minister Krisjanis Karins said no decisions were expected at the symbolic gathering the EU had pitched as only an “initial exchange” of thoughts.

“The primary goal is that we all come together because Russian war in Ukraine is affecting all of us in the security sense and also through our economies, through the rising energy costs. The only way to handle this is working together,” he said.

Some dismissed the EPC swiftly as just another talking shop, one that will be difficult to manage not just because of its size but also because of its diversity and the traditional rivalries between many of its members, from Armenia and Azerbaijan to Greece and Turkey.

The 27 EU countries will go on to meet on their own on Friday, with tensions playing out over Germany’s 200 billion euro ($197.50 billion) energy support package that many of its peers see as damaging competition on the bloc’s single market.

In their meeting, EU countries will look at their differences about how to cap gas prices to contain soaring energy costs that are harming the post-COVID economic recovery.

($1 = 1.0127 euros)

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Reporting by Sabine Siebold, Michel Rose, Robert Muller, Jan Lopatka, Michel Kahn, Jason Hovet, Andreas Rinke in Prague, Philip Blenkinsop in Brussels; Writing by John Chalmers and Gabriela Baczynska; Editing by Josie Kao, Frank Jack Daniel and Frances Kerry

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Volkswagen triggers landmark Porsche IPO plan, defying market doubts

Attendees look at the 2022 Porsche 718 Cayman GT4 RS during the 2021 LA Auto Show in Los Angeles, California, U.S. November 17, 2021. REUTERS/Ringo Chiu

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HAMBURG/FRANKFURT, Sept 5 (Reuters) – Volkswagen (VOWG_p.DE) on Monday announced its intention to float sportscar brand Porsche, triggering what could become one of the world’s largest listings even as markets jitter over record inflation and a Russia-Europe energy standoff.

The carmaker published a so-called intention to float for an initial public offering in late September or early October to be completed by the end of the year.

The move was announced after VW’s supervisory board gave the go-ahead late on Monday. read more

Investors expect a valuation between 60-85 billion euros. At the high end of estimates, the IPO could be the largest in German history and the biggest in Europe since 1999, Refinitiv data showed.

“The Board of Management of Volkswagen AG today resolved, with the consent of the Supervisory Board, to pursue an initial public offering,” Volkswagen said.

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Reporting by Paul Carrel, Victoria Waldersee, Jan Schwartz; Emma-Victoria Farr, Christoph Steitz, Ilona Wissenbach in Frankfurt
Additional writing by Tom Sims; Editing by Matthew Lewis and Alistair Bell

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Emma-Victoria Farr

Thomson Reuters

Reports on European M&A with previous experience at Mergermarket, Bloomberg The Daily Telegraph and Deutsche Presse Agentur.

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Tesla shareholders broadly follow board recommendations at annual meeting

Aug 4 (Reuters) – Tesla Inc (TSLA.O) shareholders voted for board recommendations on most issues at the company’s annual meeting on Thursday, including re-electing directors, approving a stock split, while rejecting proposals focused on environment and governance.

Votes on three of the 13 proposals did not follow board recommendations, according to preliminary tallies presented at the annual shareholder meeting in Austin, Texas.

Over board opposition, shareholders passed an advisory proposal that would increase investors’ ability to nominate directors.

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Two board proposals – cutting directors’ terms to two years and eliminating supermajority requirements – did not receive supermajorities necessary to pass.

Dressed in black, Chief Executive Elon Musk heavily influenced the voting and spoke to an enthusiastic crowd after the vote. He owns 15.6% of Tesla, according to Refinitiv data, after selling millions of shares last year. read more

Investors approved a three-for-one stock split. While a split does not affect a company’s fundamentals, it could buoy the share price by making it easier for investors to own the stock.

Shareholder proposals that failed included ones arguing for endorsing the right of employees to form a union, asking the company to report its efforts in preventing racial discrimination and sexual harassment annually, as well as reporting on water risk.

A proposal asking directors to enable large and long-term stockholders or groups with at least 3% of the shares to nominate directors, cleared objections from the board. The board had earlier said a proposal like this could create opportunities for special interests to skew Tesla plans.

Musk said the company aimed to hit a production run rate of 2 million vehicles per year by the end of 2022 and would continue building factories.

Tesla has factories in California and Shanghai and is ramping up two more in Austin, Texas and Berlin. Musk said Tesla might be able to announce an additional factory this year and he expected eventually to have 10-12 so-called gigafactories.

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Reporting by Ankur Banerjee and Akash Sriram in Bengaluru; additional reporting by Peter Henderson in Oakland and Kevin Krolicki in Detroit; Editing by Anil D’Silva

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