Tesla CEO Elon Musk Just Can’t Quit Bitcoin — or Can He?

The bulls are worried about the arc of Musk and Bitcoin’s relationship. Things initially heated up in January. Back then, Musk’s decision to invest Tesla’s corporate cash in Bitcoin was a big moment for the cryptocurrency. Then in March, Tesla’s decision to accept Bitcoin as payment catalyzed a rally sending it north of $60,000.

After getting to know Bitcoin better, however, Tesla stopped accepting the cryptocurrency as payment due to environmental reasons. At the time, Musk said Tesla hadn’t sold any of its Bitcoin holdings. The Thursday tweet might mean Tesla is selling.

That’s the dire outcome for crypto bulls. But the tweet might also mean he’s just trolling Bitcoin holders—poking fun at them because he can. An hour after his broken heart tweet, Musk posted another meme “I miss you.”

Regardless of Musk and Bitcoin’s relationship status, crypto bulls now need to include another factor in their Bitcoin modeling: internet trolling.

—Al Root

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AMC Will Ask Investors for OK to Sell More Stock

AMC Entertainment —whose stock has gained more than 2,300% this year amid a rally in so-called meme stocks—has raised $1.25 billion through stock sales this quarter alone. The movie-theater chain will ask shareholders to authorize another 25 million shares at its annual meeting on July 29.

• If approved, AMC could issue such shares starting in 2022. The number is significantly smaller than a previous request to authorize 500 million shares that was later withdrawn. The company pointed to opportunities such as debt reduction, investments in theaters, as well as mergers and acquisitions.
• After nearly doubling to $62.55 on Wednesday, the company filed for a 11.6 million stock sale program Thursday morning. AMC completed the offering in a matter of hours, selling stock at an average price of $50.85 a share.
• Shares fell Thursday on the news and ended the day sharply lower. Some investors homed in on a warning the company provided in its filing: “Under the circumstances, we caution you against investing in our Class A common stock, unless you are prepared to incur the risk of losing all or a substantial portion of your investment.”
• AMC earlier this week said it sold 8.5 million shares to investment firm Mudrick Capital, which reportedly sold its stake at a profit that same day.

What’s Next: Although stock sales have helped AMC raise much-needed cash, such sales dilute existing shareholders. AMC CEO Adam Aron said in Thursday’s filing that shareholders “can be confident that we would only issue shares if we believe that doing so will create value for you, our supportive owners.”

—Connor Smith

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Ackman’s SPAC in Talks Over 10% Stake in Universal Music Group

Hedge-fund billionaire William Ackman’s special purpose acquisition company is in talks with Vivendi to buy a 10% stake in Universal Music Group, the record label for artists including Taylor Swift, Lady Gaga, and Billie Eilish.

• Vivendi said it had entered discussions with Ackman’s blank-check company Pershing Square Tontine Holdings and that the potential deal would give Universal Music an enterprise value of €35 billion ($42.4 billion).
• The deal would be the largest ever SPAC transaction, according to The Wall Street Journal, which first reported the talks. If completed, it would eclipse the $35 billion valuation of Singapore-based ride-hailing company Grab Holdings following a similar deal earlier this year.
• Pershing Square also confirmed the discussions to acquire a 10% stake for approximately $4 billion, setting out the rationale behind the move. “Universal Music Group is one of the greatest businesses in the world,” Ackman said, adding that it met all of his company’s acquisition criteria as the world’s leading music company with a “royalty on the growing global demand for music.”
• The French company plans to distribute 60% of Universal Music’s share capital and list the company in Amsterdam, subject to shareholder approval next month. Chinese internet giant Tencent Holdings owns about 20% of the music label.

What’s Next: Ackman attempting a duet with the music industry may come as a surprise to some. Investors certainly seem unsure as shares of Pershing Square’s SPAC were 7% lower in premarket trading on Friday.

—Callum Keown

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American Investment Banned in 59 Chinese Companies Tied to Military, Surveillance

President Joe Biden signed an executive order prohibiting Americans from investing in 59 Chinese companies tied to its military or to surveillance technology used to “facilitate repression.” The move is meant to keep Americans from supporting companies that undermine U.S. security.

• Expanding former President Donald Trump’s list, Biden’s order includes companies that make and use surveillance technology that has been deployed against ethnic minorities in Xinjiang and against Hong Kong residents. The order follows international sanctions on Chinese officials over the mass detention of Muslim Uyghurs.
• Huawei, a telecoms equipment manufacturer, and Semiconductor Manufacturing International, China’s largest chip maker, are on the list. “The prohibitions are intentionally targeted and scoped to maximize the impact on the targets while minimizing harm to global markets,” one senior U.S. official said, the Financial Times reported.
• China has been exporting facial-recognition cameras and other tools it uses to monitor its 1.4 billion residents, which Biden said “constitute unusual and extraordinary threats …to the national security, foreign policy, and economy of the United States.”
• Chinese foreign ministry spokesman Wang Wenbin said Thursday that Trump’s original order was based on a “total disregard of facts,” and that the U.S. should “respect the rule of law and the market, correct its mistakes, and stop actions that undermine the global financial market order and investors’ lawful rights and interests.”

What’s Next: Biden’s order prohibits investments in the publicly listed Chinese companies and their debt, as well as in mutual or other funds that invest in those companies, with a 60-day grace period until sanctions begin on Aug. 2. Those currently investing in those companies have a year to divest their money.

—Janet H. Cho

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As Infrastructure Haggling Continues, Biden Offers Concession

President Joe Biden, trying to win GOP support for his infrastructure spending plans, offered to sideline a proposed corporate tax increase to 28% if he could get agreement on a 15% minimum corporate tax, the Washington Post reported.

• Republicans are determined to preserve the 2017 tax cuts that lowered the corporate rate to 21%. Biden’s concession would target profitable companies that pay no taxes.
• Biden is still not abandoning the idea of raising corporate taxes, his press secretary said. The GOP wants to fund infrastructure with unspent Covid relief or user taxes on things like electric vehicles.
• Politico earlier reported that Biden told lead GOP negotiator Sen. Shelley Moore Capito that he wanted $1 trillion in new spending, funded by tax increases. Republicans had proposed $257 billion in new spending in their $928 billion infrastructure counteroffer.
• Politico said GOP members are considering another counteroffer as Capito prepares to talk to Biden by phone on Friday. On Thursday, the White House said there was no deadline on the infrastructure package negotiations.

What’s Next: Treasury Secretary Janet Yellen meets Friday and Saturday with Group of Seven finance ministers in Britain to reach a broad agreement on ending global tax havens with a global minimum tax of 15%, something Canada, Italy and Japan also back, the New York Times reported.

—Liz Moyer

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U.S. Outlines Plans for Sharing 80 Million Vaccine Doses

The U.S. will share 80 million coronavirus vaccine doses with the rest of the world by the end of June, sending 75% of those doses through Covax, an international effort for vaccine distribution co-led by the World Health Organization, Gavi the Vaccine Alliance, and Coalition for Epidemic Preparedness Innovations.

• Of the first 25 million doses, 7 million will go to South and Southeast Asia, 6 million will go to Latin America and the Caribbean, and 5 million will go to Africa via the African Union. Vice President Kamala Harris delivered the news to the leaders of Mexico, Guatemala, India, and the Caribbean community on Thursday.
• The remaining 6 million doses will go directly to neighboring countries, U.S. partners, nations experiencing virus surges, and United Nations front-line workers. The U.S. sent 1 million Johnson & Johnson doses to the Republic of Korea Thursday night.
• “We are sharing these doses not to secure favors or extract concessions,” but to save lives and lead the world in ending the pandemic, President Biden said Thursday.
• Although 80 million doses is five times more than other countries have given, the amount “barely scratches the surface of what’s needed,” said Dr. Carrie Teicher, director of programs at Doctors Without Borders.

What’s Next: Biden will discuss a larger plan for vaccine distribution at next week’s G-7 Summit. “In the weeks ahead, working with the world’s democracies, we will coordinate a multilateral effort, including through the G-7, to combat and end the pandemic,” White House Coronavirus Response Coordinator Jeffrey Zients said.

—Janet H. Cho

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Do you remember this week’s news? How well do you know your Wall Street history? Take our quiz below about this week’s news. Tell us how you did in an email to [email protected].

1. Johnson & Johnson’s appeal to the Supreme Court challenging a Missouri appeals-court ruling was recently denied. The lawsuit by 20 women alleges the company’s talcum powder contained asbestos and caused ovarian cancer. What is the amount of the judgment that will stay in place?

a. $1.1 billion
b. $2.1 billion
c. $3.1 billion
d. $4.1 billion

2. Members of OPEC and its allies led by Saudi Arabia and Russia agreed to continue gradually increasing oil supplies as the global economy emerges from the pandemic and oil demand rises. The price of Brent crude closed above $70 a barrel for the first time in how long?

a. Two years
b. Three years
c. Four years
d. Five years

3. Amazon.com, in a blog post, made some workplace and policy announcements this week. The announcements included:

a. Adjusting its Time off Task productivity measure
b. Ending testing for pot in its drug screening program for any positions not regulated by the Transportation Department
c. Supporting the Marijuana Opportunity Reinvestment and Expungement Act of ‘21 (MORE Act)—federal legislation that would legalize marijuana, and expunge criminal records.
d. All of the above

4. Which hedge fund activist has amassed a sizable position in cloud-based storage company Dropbox?

a. Pershing Square Capital Management
b. Carl Icahn
c. Elliott Management
d. None of the Above

5. The Labor Department released initial unemployment claims for last week. Unemployment claims showed a drop for the fifth straight week to a level not seen since the onset of the pandemic. What is that level?

a. Below 500,000
b. Below 400,000
c. Below 300.000
d. Below 200,000

Answers: 1(b); 2(a); 3(d); 4(c); 5(b)

—Pauline Yuelys

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—Newsletter edited by Liz Moyer, Stacy Ozol, Matt Bemer, Ben Levisohn