- The Money Minute
- Elon's Muzzle Stays On
Elon's Muzzle Stays On
Here is your weekly roundup of headlines that affect you and your finances. On deck today: Elon’s muzzle stays on, Vice files for bankruptcy and the EU gives Microsoft and Activision Blizzard their blessing.
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Let’s start with Elon.
Elon, Elon, Elon. He’s the guy who kind of ruined Twitter; tweeted a picture of his nightstand covered in empty cans of caffeine-free Diet Coke and two fake guns; and tweeted incorrect details about the death of his own child to win an argument on the internet. All of which would make you think that maybe Musk should think twice before he tweets?
Musk, however, has been in court trying to avoid exactly that. Musks’ now-infamous tweet, “Funding secured to take Tesla private,” cost Musk and Tesla a minimum of $40 million. After that incident, it was decided that anything Musk tweets about Tesla should be vetted by a lawyer first. Which, considering some of the out-of-pocket stuff he’s tweeted over the years and how much it has cost him, having a lawyer review his tweets seems like something that should be standard practice for him. However, Musk tried to get this ruling appealed. But, on Monday, a federal appeals court rejected Musk’s bid to free his tweets. So what Musk has referred to as a “muzzle” is going to have to stay on.
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Speaking of lawyers and CEOs behaving badly, let’s talk about Vice. The company filed for Chapter 11 bankruptcy on Monday after trying to sell itself with no takers. I must admit, have a soft nostalgic spot for all the startup journalism ventures that were trying to make it big in traditional media. And Vice made it. The company was valued at $5.7 billion in 2017 and it was being branded as the future of media. But those glory days did not last… and before finally declaring bankruptcy, the company struggled to find a buyer willing to pay just $1 billion dollars for the company. Because despite Vice’s early promise, the day-to-day was problematic.
In the late 2010s, many young female writers came forward about being sexually harassed at Vice and its musical vertical Noisey. Now, reports are surfacing that there may have been financial misdeeds as well. The co-founder, former CEO and current executive chairman of Vice, Shane Smith, is notorious for fostering an environment in which sexual harassment, hard-partying, and blurred lines were the norm. During Vice’s financial glory days, Shane Smith was almost legendary for his excessive and showy lifestyle. He bought a $23 million mansion in Santa Monica and allegedly once spent 300k on a single dinner in Vegas. Some reports have Smith describing himself as “post-economic” and pocketing $100 million from the company's $500 million fundraising round in 2014. If these reports are true, it may go a long way towards explaining Vice’s fall from power.
Microsoft ❤️ Activision Blizzard
Since we’re talking toxic work environments, let's check in on Microsoft's deal to buy Activision Blizzard.
Microsoft makes the Xbox gaming console, which is a big player in the gaming space (pun intended). But despite acquiring some significant games like Minecraft, Microsoft has generally struggled in the game development department, with their most successful property being the Halo series. In order to bulk up their gaming intellectual properties, Microsoft decided to acquire Activision Blizzard. Now you may not have played some of Activision’s most successful games, but you’ve definitely heard of them— like World of Warcraft, Call of Duty and Candy Crush, to name a few. This collection of games would be a logical pairing for Microsoft and a chance for them to bulk up in an area where they have struggled.
It’s been reported that the acquisition will cost Microsoft a cool $69 billion— which, some tech bros are calling a bargain.
And why would this awesome portfolio of games and developers be available for cheap? Because of a culture of sexual harassment. There are a lot of stories of sexual harassment at Activision Blizzard, but one particularly nasty one is what has been nicknamed “cube crawls” - where men in positions of power would get drunk and literally crawl through the cubicles of women who worked for them and grope them. Which is the stuff nightmares are made of.
The United States and the UK have both attempted to block the purchase because of concerns over Microsoft having too much of a monopoly in the cloud gaming area if it was permitted to purchase Activision. This has been interpreted as a sign the United States government is going to attempt to limit the expansion of the tech companies which increasingly touch every corner of our lives. However, the deal was unexpectedly approved by the European Union. This adds another layer of complication to the United States government's ability to limit the expansion of giant multinational companies like Microsoft.
At their center, all these stories are about how a toxic boss can tank a company. While Vice may never have been worth what everyone wanted it to be worth - Activision was and is a digital gold mine. And while Elon Musk was one of Tesla’s greatest assets for many years - he has also become their biggest liability.