☕️ Beefing with Delaware

Why TikTok may be a lot quieter... February 01, 2024 [View Online]( | [Sign Up]( | [Shop]( [Morning Brew]( PRESENTED BY [The Ascent]( Good morning. We have made it to February, but this isn’t any ol’ February: It’s stuffed with 29 days on account of 2024 being a leap year. If we didn’t have leap years, then our seasons would completely flip every ~750 years, and no one wants to see Joey Chestnut eat 76 hot dogs in a blizzard. Speaking of leaps, you should definitely take one and listen to the Brew’s podcast, Morning Brew Daily. Every morning, hosts (and good friends) Toby and Neal discuss the day’s top business stories, providing more context than we can fit into the newsletter and leaving you upbeat about starting the day. At 25 minutes each, the episodes are the perfect length for your commute or a walk around the block with the dog. Check it out on [Spotify]( [Apple]( [YouTube]( or wherever you get your [podcasts](. —Cassandra Cassidy, Molly Liebergall, Matty Merritt, Abby Rubenstein, Neal Freyman MARKETS Nasdaq 15,164.01 -2.23% S&P 4,845.65 -1.61% Dow 38,150.30 -0.82% 10-Year 3.967% -9.2 bps Bitcoin $42,624.52 -0.75% NYCB $6.47 -37.67% *Stock data as of market close, cryptocurrency data as of 4:00am ET. [Here's what these numbers mean.]( - Markets: Stocks [fell]( yesterday after the Fed held interest rates steady but indicated that rate cuts might not be coming soon. Tech stocks in particular had a rough one, giving the Nasdaq its worst day since October. - Stock spotlight: NY Community Bancorp—which scooped up most of failed Signature Bank’s assets last year—tanked after reporting a surprise loss for Q4, spurring fears of another regional banking crisis.  TECH [Tech CEOs grilled on child safety online]( [Mark Zuckerberg before the Senate Judiciary Committee]( Anna Moneymaker/Getty Images Top tech executives appeared before the Senate Judiciary Committee yesterday in a tense hearing. With the parents and families of victims sitting in the room, senators grilled execs from Meta, X, Discord, Snap, and TikTok, claiming they [neglected to protect children]( from exploitation. Meta and TikTok received the most attention. Meta has been under heavy fire as of late: It’s currently being [sued by dozens of states]( for allegedly failing to protect children from the addictive nature of its apps. It also faces a separate lawsuit in [New Mexico]( accusing it of promoting underage accounts to predators. A landmark moment: Amid [intense questioning]( from Sen. Josh Hawley, who called on the Meta CEO to apologize, Mark Zuckerberg stood up, turned around to face the families of victims, and said, “I’m sorry for everything you have all been through. No one should have to go through the things your families have suffered.” Zuckerberg added that the company is investing in efforts to prevent further harm to children (but critics say those proposed changes aren’t enough). What do senators want to do? Pass legislation. During the hearing, senators discussed several bills aimed at preventing harm to children, including the Kids Online Safety Act (KOSA) and the Stop CSAM Act, which would make it easier for victims to sue tech companies. But…each bill faces its own set of challenges. The tech industry and civil rights advocates say that these bills could do more harm to children by leading to censorship of content related to topics like gender identity and reproductive rights. There’s also controversy around the subject of [encryption]( which tech companies claim is necessary to guarantee users’ privacy but can also allow sexual predators to communicate with children undetected. Will anything really change? At the hearing, only X’s Linda Yaccarino and Snap’s Evan Spiegel committed to supporting KOSA. And despite years of lawmakers trying to pass bills to make the internet safer for children, little progress has been made. It’s not clear whether yesterday’s dramatic hearing will impact child protection policies at Meta or other companies.—CC   PRESENTED BY THE ASCENT [This’ll pique your interest]( [The Ascent]( Zero interest isn’t really what you wanna hear from, say, the HR rep reviewing your resume. But when you’re paying down a hefty credit card balance? [Zero interest for up to 21 months]( sounds prettyyy sweet. The good news? This is a totally real opportunity, and you can enjoy it with [these credit cards](. That’s right—when you move your existing balance to these credit cards, you’ll pay 0% interest on your transferred debt for up to 21 months. But that’s not all: A select few of these cards also offer a long intro 0% APR on purchases. This means you can go to nearly 2026 completely interest-free and enjoy zero annual fees. Intrigued? [Learn more about applying](. WORLD [Tour de headlines](#) [Jerome Powell]JULIA NIKHINSON/AFP via Getty Images Interest rates probably won’t go down in March. Most investors were expecting the Federal Reserve to finally start cutting interest rates at its next meeting in March, but after its latest meeting concluded yesterday, Jerome Powell [splashed cold water]( on that idea. Speaking during a press conference, JPow explained that he doesn’t think it’s likely that the Fed will have reached “a level of confidence” that inflation has come down enough to start slashing rates that soon. However, he at least said cuts were likely coming sometime this year. Disney’s First Amendment suit against Ron DeSantis dismissed. A federal judge [tossed]( Disney’s [lawsuit]( claiming that the Florida governor’s decision to take power over the special business district where Disney World sits was unlawful retaliation for the company’s opposition to the so-called “Don’t Say Gay” law he championed. The judge ruled that Disney lacked standing to sue and that its claims failed on their merits. However, Disney still has hope to reclaim leadership of the district beyond wishing on a star (or appealing) as the company still has a separate lawsuit pending in Florida state court. PGA Tour gets $3 billion investment. The PGA Tour has clinched the funds from Strategic Sports Group, a consortium of big-name investors led by Fenway Sports Group owner John Henry that includes the owners of the Atlanta Falcons, New York Mets, and Boston Celtics. The cash will be put toward a new program allowing players to [receive grants]( based on how well they play. Lest we forget, the world of golf is still as chaotic as Jordan Spieth playing literally any hole: Saudi Arabia’s Public Investment Fund (which backs rival tour LIV Golf) and the PGA Tour have yet to complete an agreement since announcing their shocking decision to [merge]( last June. BUSINESS [Why Musk’s beef with Delaware actually matters]( [Elon Musk stares at Delaware]( Illustration: Francis Scialabba, Photo: Joel Saget/Getty Images Elon Musk took to his virtual town square to [boo Delaware]( after a state judge ruled this week that his $55 billion pay package from Tesla was exorbitant and unfair, voiding the largest corporate executive payout in history. Musk initially received the eye-popping compensation as an award for completing a set of growth goals that Tesla’s board approved in 2018. According to the Delaware judge… - A board of directors is supposed to check CEO power, but Musk’s brother and many close friends are Tesla board members—meaning they were likely inclined to align with him. - Because of that, the process of creating Musk’s pay package was “deeply flawed,” the judge said. Musk and Tesla will likely appeal the decision. But in the immediate aftermath, Musk [told his followers]( on X, “Never incorporate your company in the state of Delaware,” and polled them on whether Tesla should move its state of incorporation to Texas instead. Musk had already moved X from Delaware to Nevada, and experts worry that he could influence other companies to leave, too. That would be very bad for Delaware. Nearly 70% of Fortune 500 companies are incorporated there, earning the state more than $2 billion in related fees in 2022 (one-fourth of its budget), according to [Bloomberg](. One of Delaware’s main attractions is its [Court of Chancery]( run by experienced judges with an expertise in business law (including the one who ruled against Musk) who hear M&A cases rapidly.—ML   TOGETHER WITH SMARTASSET [SmartAsset]( Navigate retirement mistakes. Partnering with a financial advisor can be a crucial part of any healthy retirement plan. But choosing the wrong one could wreak havoc. Avoid [these seven common mistakes]( (and years of potential stress). [Try this no-cost tool]( to get connected with a vetted fiduciary serving your area. ENTERTAINMENT [Universal pulling entire music catalog from TikTok]( [Billie Eilish posing on red carpet at 2024 awards show.]( Axelle/Bauer-Griffin/Getty Images When the future archaeologists find our TikTok catalog, they are going to be so bored watching post-Barbie homages to girlhood without that haunting Billie Eilish song. Universal Music Group (UMG)—which is the music label for huge artists like Eilish, Taylor Swift, and Drake—[said]( it would pull its catalog from the platform after failing to negotiate a new contract with TikTok. The app’s nearly 1.4 billion users should start to hear the change today and be unable to use UMG’s artists’ songs in their videos, as the old contract expired at midnight. The biggest hurdle to getting a new deal was royalty payments. UMG accused TikTok of building a “music-based business, without paying fair value for the music.” That comes after the app reportedly brought in nearly $20 billion in ad revenue last year, according to The Information. Other sticking points included: - Online safety concerns. - Worries TikTok isn’t doing enough to protect artists from AI. TikTok recently confirmed that it’s testing a tool for users to create [AI songs]( on the app. TikTok is sweating. The company pushed back on what it called UMG’s “false narrative,” saying it had reached “artist-first” deals with other labels. But this could represent a major snag in TikTok’s future music plans, especially after it launched [TikTok Music]( in 21 countries, including Ireland, Australia, and Mexico, last year to take on Spotify and Apple Music.—MM   GRAB BAG [Key performance indicators](#) [BYD cars lined up in front of its car transporting ship]NurPhoto/Getty Images Stat: They’re going to need a bigger boat (fleet). BYD, the Chinese EV-maker that sold more cars than Tesla last year, is seeing such demand to export its vehicles that it’s getting into the [shipping business]( according to the MIT Technology Review. Last year, BYD shipped 240,000 vehicles, up from 55,000 in 2022. But its overseas boom comes as space on car-carrying ships is both scarce and pricey—the daily price to rent one jumped from $17,000 in 2019 to $115,000 in 2023. So, BYD is taking matters into its own hands and building an armada. The company’s first vessel set off for Europe in January with 5,000 cars aboard. Quote: “Wow! Elmo is glad he asked! Elmo learned that it is important to ask a friend how they are doing.” An innocuous question purportedly typed by a fuzzy red muppet with only four fingers probably wasn’t meant to start a [social media frenzy]( but when Elmo took a cue from Joey Tribbiani and asked, “How is everybody doing?” on X, the internet responded with a howl of existential despair in many, many postings. Reading the room, Sesame Street’s main account responded with mental health resources. And, in addition to [Cookie Monster]( offering support and snacks, President Biden [tweeted]( “Our friend Elmo is right: We have to be there for each other.” Read: A VC sounds off on the tremendous yet troubled state of video gaming. ([MatthewBall.co]( NEWS [What else is brewing](#) - [Walmart]( is going big on brick-and-mortar with plans to add 150 larger stores in the next five years, most completely new, but some converted from stores with smaller footprints. - [Paramount]( is for sale, and its latest suitor is media mogul Byron Allen, who made a $14 billion offer. - [Biogen]( plans to stop selling its controversial Alzheimer’s treatment Aduhelm. The drug had a hefty price tag but little proof it was effective. - [H&M’s CEO]( unexpectedly resigned as the fast-fashion retailer faces declining sales and increased competition from online giants like Shein. - [FBI Director Christopher Wray]( warned that Chinese hackers are looking to target US infrastructure to “wreak havoc and cause real-world harm.” - [A Pennsylvania man]( was arrested after allegedly murdering his father and posting a YouTube video featuring his severed head. RECS [To do list Thursday] It’s a new month: Learn how to [pronounce it]( once and for all. Cheers: With Dry January behind us, here are the [classic cocktail recipes]( that never go out of style. Travel tip: Move over, Chicago—Venice has its own rat-themed attraction. [Watch it float]( down the canal. Have a haddock, just for the halibut: This feed provides an endless supply of [dad jokes](. Get richer: It’s not too late to set yourself up for financial success in 2024 with the [Money with Katie Wealth Planner](. Good vibes only: Rock both your worlds with the [Tenuto 2]( the only doctor-recommended vibrator clinically proven to combat ED—and designed for powerful, two-person pleasure. [Save 30% when you buy today]( *A message from our sponsor. GAMES [The puzzle section](#) Brew Mini: Some have said solving the Mini crossword gives you a dopamine hit equivalent to finishing a 10k. [Boost your brainwaves here](. Three Headlines and a Lie Three of these headlines are real and one is faker than a normal Facebook Marketplace buyer. Can you spot the odd one out? - Florida’s mystery bass [rumble]( may be sound of frisky fish mating - LA Housing Department [displaced]( from office by landlord - Monkey spotted [stealing]( nuts after escaping Highlands zoo - One of the biggest gripes from Airbnb hosts: guests [not cleaning]( up craft projects SHARE THE BREW [Share Morning Brew]( with your friends, acquire free Brew swag, and then acquire more friends as a result of your fresh Brew swag. We’re saying we’ll give you free stuff and more friends if you share a link. One link. Your referral count: 0 [Click to Share]( Or copy & paste your referral link to others: [morningbrew.com/daily/r/?kid=4904f90a]( ANSWER We made up the one about Airbnb. Word of the Day Today’s Word of the Day is: armada, meaning “a fleet of warships.” Thanks to Elena from Phoenix, Arizona, for rallying the crew with the suggestion. Submit another [Word of the Day here](. Written by [Neal Freyman]( [Abigail Rubenstein]( [Cassandra Cassidy]( [Molly Liebergall]( and [Matty Merritt]( Was this email forwarded to you? Sign up [here](. Get smarter in just 5 minutes - Money & Career: [Money With Katie](  [Raise](  [Bossy]( Interested in podcasts? - Check out ours [here]( [ADVERTISE]( // [CAREERS]( // [SHOP]( // [FAQ]( Update your email preferences or unsubscribe [here](. View our privacy policy [here](. Copyright © 2024 Morning Brew. All rights reserved. 22 W 19th St, 4th Floor, New York, NY 10011