Just in: Warner Bros. Discovery said it plans to split itself into two publicly listed companies — one focusing on its streaming and studios business, the other on its cable channels — as it seeks to lift its embattled stock valuation.
We’re taking a look at the latest in the Musk-Trump saga, the inflamed tensions in Los Angeles and the trade negotiations with China taking place in London today. And we remember Dick Beattie, a prominent Wall Street lawyer behind many of the biggest deals of the last half-century.
The cold war continues
There’s still no sign of a reconciliation between President Trump and Elon Musk.
That will continue to have potentially big consequences for Musk’s vast business empire — and for his rivals — as the world’s richest man remains on the outs with the administration.
The latest: A seeming truce between Trump and Musk appears to be holding, insofar as neither man is using his respective social media platform to assail the other. Musk’s X feed in recent days has focused more on excoriating immigration protesters in Los Angeles.
Trump warned Musk to keep quiet, however. The president told NBC News that there would be “serious consequences” if his erstwhile ally backed Democratic challengers to Republican lawmakers over the policy bill.
When Trump was asked if he would get on the phone with Musk anytime soon, the president said, “I have no intention of speaking to him.”
Trump has a lot of leverage over Musk. While the Tesla chief donated about $275 million to help Trump win re-election in November, in some ways the president has the upper hand:
-
Musk’s companies were promised $3 billion in federal contracts from 17 federal agencies in 2023 alone. Trump following through on threats to cut those contracts would hurt significantly: “Elon, Tesla, and investors are beginning to understand more and more just how much the government has control here,” Cathie Wood, a prominent Tesla shareholder, said recently.
-
There’s also the risk of a regulatory crackdown by Trump. At least 11 agencies were investigating or suing Musk companies before Trump took office, The Times notes. Policy moves like looser regulation of autonomous vehicles — which is key to Musk’s plans for Tesla — could be rescinded. Musk could also lose his security clearance, hurting SpaceX.
Musk rivals see an opportunity. The Red Letter’s Tara Palmieri reports that Bill Gates, who has repeatedly clashed with his fellow tech mogul, visited the White House on Friday to argue for undoing some of the Musk-driven cuts to foreign aid.
And NASA and the Pentagon urged competitors to SpaceX to speed up development of alternative rocket systems, after Musk briefly threatened to decommission the Dragon spacecraft that the U.S. uses for space missions, The Washington Post reports. That could benefit Boeing and Jeff Bezos’ Blue Origin.
Readers weigh in: Last week, Andrew asked if Musk’s public pushback against Trump would inspire other corporate leaders to speak out. An email from Judy Samuelson, the executive director of the Aspen Institute Business and Society Program, summed up many readers’ feelings:
My gut? No, it does NOT catalyze “normal” CEOs, with more traditional relationships and responsibilities. That will only be enabled by collective action, which means business associations and networks and singular leaders able to catalyze others, like Ken Frazier and Ken Chenault did in the wake of George Floyd. One could ask, where and who are those leaders?
HERE’S WHAT’S HAPPENING
Inflation, consumer sentiment and Apple’s A.I. efforts will be in focus this week. Apple’s annual developers conference is set to kick off today with questions about the iPhone maker’s ability to catch up in the artificial intelligence race. On Wednesday, the latest Consumer Price Index report is expected to show tariffs are pushing up goods prices. The inflation effect on consumer confidence will be closely scrutinized in the release of the latest University of Michigan household survey, set for Friday.
Meta is said to be weighing its biggest ever A.I. investment. The company is in talks to invest more than $10 billion in Scale AI, the data-labeling specialist that works for many A.I. giants, according to Bloomberg. It’s the latest sign that tech giants still plan to spend aggressively on the technology.
California officials clash with the White House over L.A. demonstrations. Governor Gavin Newsom said he planned to sue the Trump administration for unilaterally sending the National Guard to Los Angeles, while Trump called for a greater troop presence to break up demonstrations that began on Friday. The tensions come as the administration plans to ramp up deportations, increasingly targeting workplaces.
Back to the negotiating table
Round 2 of U.S.-China high-level trade negotiations is set to get underway today in London, with high stakes for both countries and their many trading partners. The talks are supposed to run two days, The Times reports.
President Trump has struck an optimistic tone, writing on Truth Social on Friday that “the meeting should go very well.”
Both sides are feeling pressure, with the clock ticking on averting a full-blown trade war that could stunt global growth this year and next. This morning, Beijing reported a steep drop in exports to the United States last month as Trump’s tariffs begin to snarl supply chains.
And economists are warning that tariffs could raise inflation and dampen household and business spending in the United States in the second half of the year.
Who will be in the room? Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick and Jamieson Greer, the U.S. trade representative, will meet a Chinese delegation led by He Lifeng, Beijing’s top trade negotiator. Bessent, Greer and He met in Geneva last month, reaching a 90-day truce that centered on a lowering of tariffs. But tensions remain, as each country accuses the other of violating the terms of that agreement.
Potentially complicating the U.S. position, the Trump administration faces a deadline today to defend the legality of many of its stiffest tariffs before a federal appeals court.
The sticking points: China has been especially angered by Washington’s limits on chip exports, measures that are overseen by Lutnick. For the U.S., a major complaint is China’s curb on the flows of critical minerals, which are needed by automakers and military contractors.
Could China loosen its stance on rare earth magnet exports? Beijing this weekend said it could fast-track applications for rare earth shipments to European Union companies after wrapping up talks with E.U. trade officials.
Can the U.S. team win a similar arrangement — and what concessions would they need to offer?
Remembering Dick Beattie, legendary M.&A. lawyer
For six decades, when the biggest corporate deal makers needed legal advice on mergers and acquisitions, many of them turned to one name: Dick Beattie.
Beattie, a former Marine pilot and longtime leader of the law firm Simpson Thacher & Bartlett — whose role in KKR’s takeover of RJR Nabisco was immortalized in “Barbarians at the Gate” — died on Friday of cancer, Michael de la Merced writes. He was 86.
Beattie’s track record spoke for itself. After joining Simpson Thacher in 1968, he worked on many of the most consequential deals of the modern era. Among them:
-
KKR’s $25 billion deal for Nabisco in 1989, which for decades was the biggest-ever leveraged buyout
-
AOL’s $165 billion takeover of Time Warner in 2000
-
JPMorgan Chase’s $58 billion acquisition of Bank One in 2004
-
Dow Jones’s $5.3 billion sale to Rupert Murdoch’s News Corp in 2007
He also advised the board of AIG in its $85 billion federal bailout during the 2008 financial crisis, and had been a director of Harley-Davidson.
Ralph Schlosstein, a longtime friend and the former co-chair and co-C.E.O. of Evercore, described Beattie as “very calm and very steely,” who never raised his voice but commanded corporate boardrooms all the same.
“Dick was always by our side,” Henry Kravis of KKR told DealBook. He first met Beattie in 1969, and came to rely on the young lawyer for much of his deal-making. Beattie, for his part, quickly came to recognize the importance and potential of the nascent private equity business, and helped turn Simpson Thacher into a powerhouse adviser to the industry.
(Kravis came to rely on Beattie as a friend as well. Beattie’s children babysat his own. And when the financier’s son Harrison died in a car accident at the family ranch in Colorado in 1991, Beattie flew out with him.)
Beattie did more than corporate work:
-
He left Simpson Thacher for several years to join the Carter administration, becoming general counsel for what was then known as the Department of Health, Education and Welfare. His focuses included civil rights work such as Title IX protections against sex-based discrimination. He later helped supervise the creation of the Department of Education as a separate agency.
-
He founded New Visions for Public Schools, a nonprofit devoted to improving New York public schools.
-
He also served on the board of Memorial Sloan Kettering hospital.
“He really, strongly believed that given all the good fortune he had, he owed it to those who were coming up and less fortunate,” Schlosstein said.
Picture of the day
Yesterday’s men’s finals of the French Open was a five-hour thriller, with Spain’s Carlos Alcaraz outlasting Italy’s Jannik Sinner. Spotted in the crowd were countless celebrities, designers and business moguls, including David Zaslav, lower left, the C.E.O. of Warner Bros. Discovery, who sat next to the actor Dustin Hoffman and his wife, Lisa.
Is the I.P.O. market bouncing back?
President Trump’s return to the White House was widely expected to revive the I.P.O. market. But tariff anxiety and market turbulence prompted several companies, including StubHub and Klarna, to pause going public.
While trade war uncertainty still weighs on companies and investors, the I.P.O. outlook is brightening.
Watch these names: Klarna is still expected to go public this year, as are Discord, the chat app, and Figma, the software design company. The number of new listings as of June 5 is the highest since 2021, according to Renaissance Capital, a market data firm.
“We’re seeing clear signs of momentum — not necessarily a surge,” Mike Bellin, who leads PwC’s U.S. I.P.O. consulting business, told DealBook.
But even with this momentum, Bellin said, “I.P.O. windows open and close very quickly.” Macroeconomic challenges and trade-war jitters, he added, “could cause the window to close again shortly.”
Circle’s I.P.O. is the latest sign of a shift. The stablecoin company went public last week on the New York Stock Exchange, pricing at $31, above the expected range, and then the stock went up from there. CoreWeave, which rents computing power to crypto and A.I. companies, and eToro, an investing app, are also trading above their listing prices.
And now, Gemini, a crypto exchange founded by Cameron and Tyler Winklevoss, has filed to go public.
“All of it points to a very robust and active I.P.O. market on the horizon,” Matt Kennedy, a senior strategist at Renaissance Capital, told DealBook. “For real this time.”
THE SPEED READ
Deals
-
Qualcomm agreed to buy Alphawave, a British semiconductor company, for $2.4 billion. (Bloomberg)
-
Anglo American is reportedly planning to formally put its De Beers division up for sale, though bankers expect the diamonds giant to fetch far less than its $4.9 billion book value. (FT)
Politics, policy and regulation
-
“The stealth Senate dealmaker who could deliver Trump’s tax cuts” (Politico)
-
The Trump administration is said to be weighing a broad canceling of federal funds for California, which would probably draw legal pushback from the state. (WaPo)
Best of the rest
-
Mark Read will step down as the C.E.O. of the ad giant WPP, as the advertising industry struggles with economic uncertainty and disruption from artificial intelligence tools. (FT)
-
Bill Atkinson, the Apple designer who created the software behind the groundbreaking graphical interface of the Lisa and Macintosh computers, died last week. He was 74. (NYT)
We’d like your feedback! Please email thoughts and suggestions to [email protected].
Andrew Ross Sorkin is a columnist and the founder of DealBook, the flagship business and policy newsletter at The Times and an annual conference.
Bernhard Warner is a senior editor for DealBook, a newsletter from The Times, covering business trends, the economy and the markets.
Sarah Kessler is the weekend edition editor of the DealBook newsletter and writes features on business.
Michael J. de la Merced has covered global business and finance news for The Times since 2006.
Danielle Kaye is a Times business reporter and a 2024 David Carr Fellow, a program for journalists early in their careers.
The post How Trump Has Leverage Over Musk appeared first on New York Times.
