(ZH) "Social Peace Is In Great Danger": Germany Is Quietly Shutting Down As Ener

"Social Peace Is In Great Danger": Germany Is Quietly Shutting Down As Energy Crunch Paralyzes Economy

Earlier today we wrote that Germany's largest landlord, Vonovia, had taken the unprecedented step of restrictring heating at night, a terrifying preview of what lies in stock for the "most advanced" European nation this winter. Alas, it's going to get worse, much worse.
According to the FT, Germany is now rationing hot water, dimming its street lights and shutting down swimming pools as the impact of its energy crunch begins to spread like the proverbial Ice-Nine wave, from industry to offices, leisure centers and residential homes.
The reason behind Germany's slow motion paralysis is well-known: the huge increase in gas prices triggered by Russia’s move last month to sharply reduce supplies to Germany has plunged Europe’s biggest economy into its worst energy crisis since the oil price shock of 1973 (see "What's Unfolding In Europe In Recent Days Is A Fresh Big Negative Supply Shock")
With electricity prices hitting never before seen levels, gas importers and utilities are fighting for survival while consumer bills are going through the roof, with some warning of rising friction (not to mention the infamous wheelbarrows full of cash).
“The situation is more than dramatic,” said Axel Gedaschko, head of the federation of German housing enterprises GdW. “Germany’s social peace is in great danger.”
Unfortunately, as tensions over Russia’s war in Ukraine escalate, officials fear the situation could get worse. On Monday, as we reported last week, Russia is shutting down its main pipeline to Germany, Nord Stream 1, for 10 days of scheduled maintenance. Many in Berlin fear it will never reopen.
Commenting on the infamous July 22 day when Russian gas flows are expected to resume, DB's Jim Reid writes that "while we all spend most of our market time thinking about the Fed and a recession, I suspect what happens to Russian gas in H2 is potentially an even bigger story. Of course by July 22nd parts may have be found and the supply might start to normalise. Anyone who tells you they know what is going to happen here is guessing but as minimum it should be a huge focal point for everyone in markets."
The bank also conveniently warns that "if the gas shutoff is not resolved in coming weeks this would lead to a broadening out of energy disruption with material upfront effects on economic growth, and of course much higher inflation."
Anticipating the worst case outcome, Germany last month took a crucial step towards rationing gas when economy minister Robert Habeck activated the second stage of the country’s gas emergency plan. “The situation on the gas market is tense and unfortunately we can’t guarantee that it will not get worse,” he said on Tuesday. “We have to be prepared for the situation to become critical.”
Habeck, who says he is now taking shorter showers, has appealed to the population to save energy — and municipalities and property owners have heeded the call.
As we reported this morning, Vonovia, the country’s largest residential landlord, said it would be lowering the temperature of its tenants’ gas central heating to 17C between 11pm and 6am. It said the measure would save 8 per cent in heating costs.
A housing association in the Saxon town of Dippoldiswalde, near the Czech border, went a step further this week, saying it was rationing the supply of hot water to tenants. From now on they can only take hot showers between 4am-8am, 11am-1pm and 5pm-9pm.
“As we announced in our general meeting, we have to save for the winter,” a notice in the affected blocks reads.
Such measures could become routine in the coming weeks. Helmut Dedy, head of the German Association of Towns and Cities, said the “whole of society” must now cut down on its energy consumption, saving in summer “so we have warm flats in winter”.
“Every kilowatt-hour we save helps to fill the gas storage a bit more,” he said as he appealed to town councils up and down the country to take emergency action. He had a few suggestions: turn off traffic lights at night; shut off hot water in council buildings, museums and sports centres; adjust air conditioners; and stop illuminating historic buildings
Some have already taken measures. The district of Lahn-Dill, near Frankfurt, is switching off the hot water in its 86 schools and 60 gyms from mid-September, a move it hopes will save it €100,000 in energy costs, and Düsseldorf has temporarily closed a massive swimming pool complex, the Münster-Therme. Meanwhile, Berlin has turned down the thermostat on open-air swimming pools, reducing their temperature by 2 degrees. In western Germany, Cologne is dimming its street lighting to 70 per cent of full strength from 11pm.
Residential customers are also taking action, reactivating wood-burning stoves and fireplaces. Sales of firewood, wood pellets and coal, as well as of gas canisters and cartridges, have shot up.
It is unclear how far such measures will soften the impact of higher heating bills, which which be through the roof. The GdW said the Ukraine war will push up energy prices for consumers by between 71 per cent and 200 per cent, amounting to additional annual costs of between €1,000 and €2,700 for a one-person household and up to €3,800 for four people, compared with 2021 levels.
Costs could increase even more as a result of a new law working its way through the German parliament. This would allow the government to impose an emergency levy on all gas consumers to spread the cost of higher prices more evenly. It is designed to prevent gas importers becoming insolvent, a scenario ministers fear could cause a Lehman Brothers-style meltdown of the whole sector. Uniper, the largest importer of Russian gas in Germany, is already in talks with officials on a state bailout that experts say could be as large as €9bn.
In the meantime, German consumers — both industrial and residential — are reverting back to East Gcutting their energy use. A study by the Hertie School in Berlin said industrial gas consumption fell 11 per cent in March and April this year, compared with the same period in 2021, and by 6 per cent in private households.
Much more needs to be done, said Lion Hirth, one of the study’s co-authors. “The decline in demand that we’ve seen up until now is unfortunately far from adequate to completely close the supply gap threatening us this winter,” he said. In his appeal to Germany’s municipalities this week, Dedy made a similar point. “The situation is very serious,” he said. “It’s already clear we’re going to have to leave our comfort zone.”
Let's just hope that by exiting the "comfort zone" Germany does not enter the "war zone" - it's traditionally not a happy ending for Europe when that happens...

WSJ : Elon Musk Is Twitter’s Material Adverse Effect

Elon Musk Is Twitter’s Material Adverse Effect
A settlement would beat a protracted legal battle for both sides, but the social network will still have to contend with the aftermath

Elon Musk wants to leave Twitter TWTR -5.10% at the altar, having mistaken lust for love. Walking away will still cost him, but it is a better outcome for both sides. The question for Twitter’s shareholders is how much worse off it will be than before its brief dalliance with the famous billionaire.

In a filing Friday, Mr. Musk’s lawyers declared his intention to terminate the merger agreement he signed in April with the social-media platform. His claim is that Twitter breached their deal by failing to provide Mr. Musk with requested information to settle questions about bots and an allegedly inflated user count. Mr. Musk, through his lawyer, is also accusing the social network of “materially inaccurate representations,” and added for good measure his belief that the portion of spam and fake accounts in Twitter’s user base is “wildly higher” than the less-than-5% figure Twitter has historically claimed in its regulatory filings.

Twitter says it is planning a lawsuit to compel Mr. Musk to honor the agreement. In a strict legal sense, the social network might have the upper hand: Mr. Musk waived his due diligence rights in signing the deal, and the objections he raised came conveniently after electric-vehicle maker Tesla lost about one-third of its market value, thus denting the very net worth Mr. Musk was leveraging to finance the Twitter acquisition.

But a protracted legal battle isn’t in either side’s interest. Mr. Musk could be forced to write a big check years from now for the husk of a social-media company he once coveted. Or Twitter’s shareholders could walk away with a mere $1 billion consolation prize in that parlous state.

True, a settlement even significantly north of the $1 billion breakup fee agreed to in the merger won’t go far to erase the $14.7 billion difference between the $54.20 per-share deal price and the $35 that Twitter’s shares hit after-hours on Friday following Mr. Musk’s termination filing. Indeed, Twitter’s shares would likely be far lower even if the stock simply tracked the damage done to its social-network peers over the past three months, as concerns about the health of online advertising in a highly inflationary environment were affirmed by a warning from Snapchat parent Snap Inc. in late May. A drop in line with the Nasdaq CTA Internet Index would put Twitter’s shares slightly below the $30 mark now.
And, unfortunately, that is a base-case scenario that assumes Twitter emerges from the Musk melee unscathed. That appears unlikely. If Mr. Musk’s initial interest made Twitter seem like an undervalued darling, the problems he has both raised and arguably caused over the past few months could change a lot of minds.

One thing clear long before Mr. Musk raised his concerns is that it is impossible to know just how many “real” users Twitter’s platform has. Certainly it isn’t a problem unique to Twitter; all social-media platforms disclose their “best estimates” of their respective user bases, noting they are likely inaccurate to some degree. Meta Platforms, for example, recently disclosed in a filing that around 11% of monthly active users for its Facebook app could be duplicate accounts. Twitter has already said publicly that it misstated its users for 12 consecutive quarters through the end of last year, giving itself credit for multiple accounts being owned by a single user.

But Mr. Musk has one of the world’s loudest megaphones as one of only a handful of Twitter accounts with more than 100 million followers. That gives his public questioning of the integrity of the platform extra weight.

And even he seems to have overestimated Twitter’s external appeal. An analysis published by Pew Research last month showed nine in 10 journalists use Twitter for their jobs, but just 13% of American adults say they regularly get news on Twitter. That is nearly the same percentage who report getting their news from Instagram and significantly less than the 31% who said they get their news from Facebook.

Perhaps most concerning is what the past few months have done to Twitter’s management and talent base. As Mr. Musk’s own lawyers point out in Friday’s letter, three key executives have resigned from Twitter since the merger was announced. It is possible those departures were spurred by the prospect of the merger, especially after Mr. Musk showed a propensity to publicly criticize Twitter employees and made clear that, regardless of his title, things would be run his way or the highway. But the damage is still done, and Twitter under the glare of the new spotlight with or without the deal might remain an unappealing place to work.

At the end of the day, Mr. Musk’s case is all about “material adverse effects”—the user numbers, the bots, the management. But for Twitter’s investors, the Musk affair may prove to have the worst effects of all.

FT : Experts say Musk faces uphill battle for victory in Twitter legal fight

Experts say Musk faces uphill battle for victory in Twitter legal fight
Social media platform seeks to force the Tesla boss to go through with his takeover

Elon Musk faces an uphill battle if Twitter takes him to court over the Tesla founder’s attempt to pull out of an agreed $44bn takeover of the platform, legal experts predict.

On Friday, Musk said Twitter had been in “material breach of multiple provisions” of the deal contract, which gave him the right to walk away, putting an end to weeks of speculation over the billionaire’s desire to buy the company.

Twitter hit back, announcing plans to sue Musk in the Delaware Court of Chancery, where the company is incorporated, to force him to honour the deal at the agreed price of $54.20 per share.

The action and counteraction sets the stage for a costly legal battle that could plunge the company into further turmoil.

Twitter could opt to accept a settlement or negotiate with Musk for a lower price to avoid what would be hefty legal fees and further uncertainty amid lay-offs and rock-bottom morale inside the company.

But if the deal is contested to the end in the courts, Musk and his legal team face an uphill challenge, according to legal experts, who suggest that Twitter might have an edge.

“I think we are finally going to see if Elon Musk is ‘above the law,’ said John Coffee of Columbia Law School. “I am confident that in the Delaware courts the answer is no. The law is fairly clear that you cannot pull out from a deal in the manner he is seeking.”

Reticent buyers have historically tried to argue a company has experienced a “material adverse effect” (MAE) to void a merger agreement, citing a deterioration of the target company’s business results as proof.

However, the Delaware courts have only once ruled a company could escape via MAE, leaving skittish buyers like Musk to rely on other legal arguments to avoid a deal.

Musk alleges that Twitter violated three separate provisions of its deal contract. First, he said Twitter had repeatedly failed to provide adequate information about fake and spam accounts needed to facilitate financial planning for the transaction.

Second, Musk’s representatives say they carried out a preliminary assessment of what data they could access and found that the number of spam and fake accounts on the platform was “wildly higher” than the 5 per cent estimated by Twitter. Twitter’s public disclosures as part of the deal therefore contain “materially inaccurate representations”, they say.

Finally, Musk argued that departures of key Twitter employees since the deal’s signing demonstrated that Twitter was deviating from its obligation to “conduct its business in the ordinary course”, another violation that could provide an escape hatch for Musk.

Musk had for months been broaching the fake account issue in interviews and in his own tweets. Twitter has defended the 5 per cent figure as accurate and acquiesced to some of his data demands. However, the company has indicated that it cannot share the complete data set needed to make the assessment with third parties, as this includes sensitive user information protected by privacy laws.

“The information supplying requirement does not necessarily justify a refusal to close [the deal],” Coffee said.

More broadly, Twitter is likely to argue that Musk’s concerns simply mask buyer’s remorse over a pricey and highly leveraged deal. Musk has received $13bn in debt commitments from several Wall Street banks. Debt pricing has become markedly more expensive in recent weeks as banks have had trouble placing the loans and bonds that support other leveraged buyouts.

Musk has also committed to coming up with more than $30bn in equity himself. He has previously announced that he had lined up some co-investors including private capital firms such as Brookfield and Andreessen Horowitz to ease the burden. Shares in Tesla have crashed more than 35 per cent so far this year and Musk has himself sold $8.5bn worth of shares to help fund the deal.

“Musk will have to prove these are real breaches of the agreement,” said Ann Lipton, a corporate law professor at Tulane University. “But because his conduct up until now so brazenly demonstrated he was looking for any excuse to back out, he’s going to start the case with a serious credibility problem.” 

The deal terms include a $1bn termination fee that Musk would owe if he was generally responsible for the transaction collapse. Twitter negotiated a so-called specific performance clause that commits Musk to finish the deal if all other closing conditions are met.

While the Delaware courts have generally been unimpressed with buyers arguing either a MAE or technical violations of covenants or representations, in a handful of instances buyers have been successful.

For example, the Delaware Court of Chancery ruled in 2020 that Korea’s Mirae could terminate an acquisition of a set of luxury hotels owned by China’s Anbang as the seller had not operated the business in a manner that was consistent with past practice after signing the deal.

Even if Twitter wins in court, the judge might balk at actually forcing through a deal, experts note.

“It’s very daunting to order specific performance in a situation like this. There’s external financing that has to be made to perform. And what if Musk flouts your order. It turns into a showdown over the court’s jurisdiction and power — what happens at ground level?” Morgan Ricks, law professor at Vanderbilt wrote on Twitter.

A courtroom battle between Musk and Twitter could prove lengthy as the proceedings would have to dive into the details of Twitter’s business and the company’s actions after signing. The sides could instead angle for a recut deal in order to avoid an expensive and potentially embarrassing trial.

In June, software company Anaplan agreed to cut its sale price to Thoma Bravo by $400mn on an $11bn deal, after the private equity firm said Anaplan had violated the merger agreement by paying out $32mn more in recent employee bonuses than had been disclosed in the merger contract.

Anaplan insisted in securities filings that it did not believe that the excess bonuses constituted a breach but to avoid a legal fight, agreed to take a lower price.

If Musk and Twitter were to agree to a damages payout instead of a revised price, the merger agreement caps that figure at $1bn. However, the sides could simply agree to a bigger number to cease the hostilities.

Should the conflict reach a courtroom, Musk’s testimony could prove the highlight.

In 2021, he dramatically jousted with a lawyer who represented Tesla shareholders who had accused him of improperly bailing out SolarCity, another Musk company that Tesla had acquired in 2017.

“I think you are a bad human being,” Musk told the lawyer who quizzed him. The Delaware court cleared him of any wrongdoing in that buyout.

(CB) The Week’s 10 Biggest Funding Rounds: Xpansiv Looks To Expand With $400M, C

The Week’s 10 Biggest Funding Rounds: Xpansiv Looks To Expand With $400M, Cyber Insurer Coalition Lands $250M
Maybe companies were reluctant to announce new funding after the July 4th holiday, or maybe it was another indication of a slowing venture market, but July has started off slow—very slow. Only three rounds raised by U.S.-based startups reached nine figures. In fact, you could make the top 10 list this week raising $20 million. That is something that would never have happened last year.

1. Xpansiv, $400M, financial services: Carbon off-sets and renewable energy credits have become big business, and firms need a place to buy and sell. Blackstone clearly sees that. Funds managed by the private equity giant’s energy-focused investment business—Blackstone Energy Partners—committed $400 million to lead a strategic investment in Xpansiv. The New York-based company has developed a market-infrastructure platform for global carbon and environmental commodities—like voluntary carbon offsets or energy credits. That has become important as companies try to reach their ESG goals. Founded in 2018, Xpansiv has raised nearly $580 million, according to Crunchbase data.
2. Coalition, $250M, cyber insurance: While there may be a slowdown in funding to cybersecurity startups, this week was not a perfect illustration of that as two such companies made the top five. San Francisco-based Coalition closed a $250 million round at a $5 billion valuation—less than a year after it raised a $205 million Series E at a $3.5 billion-plus valuation. Actually, in about 15 months Coalition’s valuation has nearly tripled. The new round comes as the insurer has seen significant growth, increasing revenue nearly 200% from the prior year. Such growth also shows the growing importance of cyber insurance as an increase in cyberattacks through the past few years has elevated the need for companies to look for protection. The new round included participation from Allianz X, Valor Equity Partners, Kinetic Partners and other existing investors, the company said in a release. Founded in 2017, Coalition says it has raised $755 million.
3. Flexe, $119M, logistics: Investors’ interest in logistics and supply chain tech remains high as the world continues to try to overcome distribution issues born out of the pandemic. Seattle-based startup Flexe is the latest to turn that interest into a big round. The company raised a $119 million Series D at a $1 billion-plus post-money valuation. The round included new investments from funds and accounts managed by BlackRock, as well as funds and accounts advised by T. Rowe Price Associates and T. Rowe Price Investment Management, and Tiger Global, among others. Flexe’s programmatic logistics technology platform helps large retailers and other brands. It provides things such as scalable warehousing solutions and retail distribution. This has become big business due to the supply chain gridlock. VC-backed logistics startups have raised nearly $11.5 billion this year, according to Crunchbase data. While not on pace to reach the nearly $24.5 billion raised last year, it still represents significant dollars. Founded in 2013, Flexe has raised more than $260 million, Crunchbase data shows.
4. Tebra, $72M, health care: Digital health care was growing incrementally before the pandemic, but certainly has taken off since COVID made many people reluctant to go out and see a doctor. Tebra is the latest to take advantage of that enlarging market and growing investor interest, as the Newport Beach, California-based startup closed a round worth more than $72 million led by Golub Capital at a valuation greater than $1 billion. The round is a mix of both growth equity and debt financing. The company offers a digital platform to independent practices to help with everything from scheduling to payments to telehealth. Tebra was formed late last year after the merger of Kareo and PatientPop.
5. Swimlane, $70M, cybersecurity: Like we said earlier, it was a good week for a couple of cyber companies as far as fundraising went. Boulder, Colorado-based Swimlane locked up a $70 million growth funding round to help companies automate some of their cybersecurity needs. That has become necessary due to both a talent shortage in cyber and dwindling IT budgets to pay the talent that is available. The round was led by Activate Capital. Founded in 2014, the company has raised nearly $155 million, according to Crunchbase data.
6. Zeem Solutions, $50M, electric vehicles: Inglewood, California-based Zeem Solutions closed a $50 million capital commitment from a fund managed by ArcLight Capital Partners. Zeem allows companies to operate commercial electric vehicle fleets for a flat monthly rate, which includes vehicle lease, charging, maintenance and insurance.
7. Calyxo, $32.7M, medical devices: Pleasanton, California-based Calyxo, a medical device company focused on kidney stone treatments, closed a $32.7 million Series C led by Questa Capital and CRG. Founded in 2016, the company has raised more than $47 million, according to Crunchbase.
8. Deuna, $30M, e-commerce: Palo Alto, California-based checkout commerce startup Deuna raised a $30 million Series A led by Activant Capital. Founded in 2020, the company has raised $37 million to date, according to Crunchbase.
9. Kernal Biologics, $25M, biotech: Cambridge, Massachusetts-based mRNA-technology company Kernal Biologics closed a $25 million Series A led by Hummingbird Ventures. Founded in 2016, the company has raised $25 million, Crunchbase data shows.
10. Traba, $20M, staffing: Miami-based Traba, a marketplace for jobs at fulfillment centers and event venues, raised a $20 million Series A round led by Khosla. Founded last year, the company has raised nearly $24 million, according to Crunchbase.

Big global deals
Although U.S. startups may have had a slow week raising money, there were several large rounds raised globally.
  • Swedish electric vehicle battery manufacturer Northvolt raised $2.75 billion in a new funding round.
  • China-based drug research platform ClinChoice raised a $150 million Series E.
  • Brazil-based consumer loan startup Creditas raised a $150 million round of new funding.

(ZH) Russia Says It Will Increase Gas To Europe Under One Condition

Russia Says It Will Increase Gas To Europe Under One Condition

Russia will increase its gas supplies to Europe if a turbine necessary for Nord Stream 1 that is currently undergoing repair in Canada is returned, Reuters reported on Friday.
Ukraine urged Canada on Thursday not to return a gas turbine to Gazprom, claiming that the Russian major has enough turbines to keep gas flowing to Europe at full capacity. According to a Reuters report that cited a Ukrainian government official, if Canada returns the turbine to Gazprom, it would violate its own sanctions.
"The sanctions forbid the transfer of any equipment related to gas," the Ukrainian government source said.
"If, God forbid, this decision is approved, we will undoubtedly appeal to our European colleagues that their approach must be reassessed. Because if countries do not follow decisions they have agreed about sanctions, how can we talk about solidarity?" he added per Reuters.
Meanwhile, Germany's Economy Minister Robert Habeck called on Canada to release the turbine.
"I'll be the first one who will fight for a further strong EU sanction package, but strong sanctions means it must hurt and harm Russia and Putin more than it does our economy," Habeck told Bloomberg earlier this week.
"Therefore, I ask for understanding that we have to take this turbine excuse away from Putin."
The turbine affair began last month when Gazprom began to reduce gas flows via the Nord Stream 1. The Russian state company attributed the reduction to a missing turbine that had not been returned after maintenance.
Germany's Siemens Energy explained that "Due to the sanctions imposed by Canada, it is currently impossible for Siemens Energy to deliver overhauled gas turbines to the customer. We have informed the Canadian and German governments and are working on a viable solution."
As a result of this delayed delivery, flows via the Nord Stream 1 pipeline are now at just 40 percent of capacity, and Germans are bracing for a complete halt of the flow for scheduled maintenance, which begins next week, on July 11.
While normally Gazprom would divert flows to other pipelines, now there is fear it will not do so as relations between Russia and the European Union break records in reaching historically low point after low point.
Meanwhile, Canada has indicated that it has no intention of returning the turbine, with Natural Resources Minister Jonathan Wilkinson saying in late June that "If you talk to the Germans, they are very, very concerned about" their energy security. "I'm sure it'll come up at least in the corridors of the G7 ... I wouldn't hold my breath that we're going to find a resolution before the end."
A Ukrainian energy ministry source who spoke to Reuters, however, said they had information that Canada was preparing to make the transfer of the equipment, with another unnamed source saying that the decision had been made as Canada and Germany did not want to give Russia an excuse not to keep the gas flowing to Germany.

WSJ : Elon Musk’s Starlink Satellite-Internet Service Battles Dish Over Airwaves

Elon Musk’s Starlink Satellite-Internet Service Battles Dish Over Airwaves
SpaceX works to convince the Federal Communications Commission that 5G network operators would crowd its airborne turf

Elon Musk’s rocket company recently won regulatory approval to provide satellite-internet service to planes, boats and recreational vehicles. But the company’s battles in Washington and with rival users of the airwaves are just beginning.

Space Exploration Technologies Corp., better known as SpaceX, is urging the Federal Communications Commission to avoid making new rules that it says would hobble its Starlink internet service, which depends on a swarm of low-flying satellites. That has put the company and satellite operators like OneWeb and Kepler Communications Inc. at odds with Dish Network Corp. DISH 1.55% and others that want the FCC to open more room on the spectrum for fifth-generation wireless service.

Both sides have stepped up their lobbying at the FCC and on Capitol Hill. SpaceX last month urged Starlink customers to sound alarms about any rule changes by writing to the regulator, an appeal that has generated more than 95,000 comments to the commission.

Dish, a satellite operator co-founded by telecom mogul Charlie Ergen, has said it is betting its future on 5G wireless service closer to the ground. Mr. Ergen’s allies in the dispute include the wealth-management firm of technology entrepreneur Michael Dell.

House Minority Leader Kevin McCarthy is among the congressional leaders who have stepped into the fray. He urged the FCC not to disrupt the “innovation and investment made by satellite operators” in the spectrum to help them keep a technological edge over Chinese rivals, according to a June 17 letter viewed by The Wall Street Journal. The California Republican also said the length of time the FCC has spent on its review had created uncertainty for satellite companies.

The commission has for years been mulling proposals to safely expand the usage of wireless frequencies that sit above 12 gigahertz. Those frequencies have long carried TV transmissions for Dish and DirecTV. Newer satellite-internet companies joined the band in recent years under strictures requiring that each satellite avoid drowning out its neighbors’ spaceborne signals.

The rule-making process has no time limit and the commission could opt to make no changes at all.

At stake is a swath of wireless frequencies worth tens of billions of dollars if past auctions for other licenses are any guide. SpaceX and Dish both say their technologies can link the millions of Americans who still lack a high-speed internet connection—provided that the companies have enough wireless spectrum available.

Dish said that cellular-technology advances prompted it to lobby the FCC to further loosen its spectrum rules to support future 5G service.

Executives at Starlink, which transmits data from satellites in much lower orbits than Dish, objected to that plan alongside other satellite operators. The company, citing its own analysis, said in a recent FCC filing that Dish’s plan would allow companies to create loud signals that would drown out more sensitive satellite transmissions.

David Goldman, senior director for satellite policy at SpaceX, said Dish and Mr. Dell’s investment firm are seeking to profit from the potential changes to the airwaves in question without meeting FCC requirements.

Dish public-policy chief Jeffrey Blum disputed SpaceX’s arguments and said that 5G advocates have met the commission’s requirements by backing up their assertions with engineering research.

“We’re confident the FCC will soon determine the best means to bring this spectrum into the FCC’s frequency pipeline,” said V. Noah Campbell, the chief of a company held by Mr. Dell’s investment firm.

Both sides are digging in for a potentially long fight. Dish and its allies have said it will take several years for the frequencies in question to work their way into smartphones and other machines that can take advantage of them. SpaceX has urged the commission to end its review.

Mr. Musk’s company has already used its rockets to blast around 2,600 of one version of its Starlink satellites into orbit and reported more than 400,000 subscribers for the internet service globally, according to a June presentation the company filed with the FCC. Starlink is available in large parts of the U.S., according to a map available on the service’s website. The company has also sought FCC permission to dramatically expand the Starlink fleet over time.

The closely held company doesn’t release financial information but was recently valued at around $125 billion. In addition to developing Starlink, SpaceX handles human and cargo space missions for NASA and launches U.S. spy satellites.

Starlink’s reach is primed to grow after the FCC on June 30 approved its request to serve moving vehicles like boats, recreational vehicles and airplanes. The decision helped Mr. Musk’s company expand its prospective customer base but didn’t settle the broader fight over spectrum.

The argument over a typically obscure federal license offered both sides a chance to trade more accusations. A Dish lawyer’s June 7 letter to regulators seized on Mr. Musk’s tweets about Starlink, calling them proof that the company was jumping the gun through “rule violations that are not kept secret but rather proclaimed from the mountaintops of social media.”

Mr. Goldman, the SpaceX satellite-policy director, replied in a June 8 letter that Dish’s “fanciful use of Twitter and low opinion of American consumers” took Mr. Musk’s tweets out of context, including one that committed to helping Ukraine’s government use its service.

SpaceX has tangled with other satellite operators in proceedings at the FCC but also has found ways to work with competitors. Last month, SpaceX and OneWeb told the commission that their satellite systems would be able to coexist. The companies said they conducted extensive, good-faith discussions to reach that conclusion.

WSJ : A $100,000 Dress, Perhaps, For the End of the World?

A $100,000 Dress, Perhaps, For the End of the World?
The economy is teetering. Currency is cratering. But the fanbase of extravagant haute couture? Ball gown big—and growing

“It’s really important for couture to be reflective of the times that we are in,” mused actor Julia Fox, vaping in a barely-there Mugler ensemble while in Paris during the haute couture shows this past week. She said that the collections she’d seen, including Schiaparelli and Iris van Herpen, felt relevant. And, to her, worth it—even if just to borrow: “People think couture is super overpriced, but the feeling that it gives you when you put it on is priceless. And in today’s day and age, you need to go where it feels good.”

Is Julia Fox—performative and charming—a modern-day Wallis Simpson, one of the most famous clotheshorses of all time? Ms. Simpson, the Duke of Windsor’s consort known for frequenting 1930s and ’40s couture houses such as Mainbocher and Balenciaga, was an invisible star of the new exhibition at Paris’ Musée des Arts Decoratifs, “Shocking! The Surreal World of Elsa Schiaparelli.” The show displays her most celebrated gown, a collaboration between Ms. Schiaparelli and Salvador Dalí featuring an erotic lobster.

Opened the same day as buzzy designer Daniel Roseberry’s latest runway show for Maison Schiaparelli, the exhibition draws a line between Ms. Schiparelli’s avant-garde designs and Mr. Roseberry’s current pieces such as Lady Gaga’s inauguration gown. Mr. Roseberry is one of a new generation of designers pulling the couture arm of his business into the now, stocking his front row with a curated mix of personalities including playwright Jeremy O. Harris, filmmaker Janicza Bravo and actors Hunter Schafer and Natasha Lyonne.

Haute couture, with prices that begin around $6,000 for a blouse and hover in the $50,000 to $60,000 range for a dress, can go as high as $1 million for major pieces, remaining out of reach for most fashion fans. But its demographic and influence have broadened markedly. To qualify as haute couture, a designation registered with the French authorities in 1945 (with roots that go back to the 18th-century aristocracy), designers still follow strict rules. They must show at least 25 looks in Paris twice a year, hand-finishing looks on site in separate ateliers for suiting and flowy pieces. But within those parameters, the extravaganza is inching toward inclusivity.

Traditionally, couture clients were very wealthy, very thin, very white socialites like Lynn Wyatt, now 85, and the late Nan Kempner, who could afford the craft-intensive, made-to-measure fashion. These “social X-Rays,” as Tom Wolfe called them in his 1987 book “Bonfire of the Vanities,” would debark to Paris for the runway shows twice a year, Vuitton trunks in tow, to sit on small gilded chairs and choose scores of outfits from Dior or Chanel. These garments would then be molded perfectly to their bodies in a series of painstaking fittings by les petits mains, or “little hands”—the women in white coats who make designers’ visions come to life.

Today, the front row is just as likely to include a Chinese investor such as Wendy Yu, an Indian businesswoman like Natasha Poonawalla, or a philanthropist and street-style star such as Swede Fredrik Robertsson, who runs a charity supporting LGBTQ causes and the hair-care company Björn Axén. Celebrities, always sprinkled in, are now firm fixtures, in both the audience and on the runway. At this past week’s couture shows in Paris, guests included much of the Kardashian clan including Kim Kardashian’s oldest child North West, “Selling Sunset” reality-show star Christine Quinn, Sigourney Weaver, K-Pop artist CL and more.

Many of the collections this week bore concepts and clothing that will ricochet well beyond carpeted mansions in Dallas and Dubai. Most notably at Balenciaga, creative director Demna (who goes by a mononym) showed a tour de force of a collection that combined the signature streamlined shapes of the house’s founder Cristóbal Balenciaga with a true sense of un-gimmicky innovation: aerodynamic face shields engineered by Mercedes-AMG F1 Applied Science; satin-lined Japanese denim; lifelike faux fur designed using high-definition photo mapping; and speaker bags in collaboration with Bang & Olufsen. Twenty of those bags, at €8,500 a pop, were immediately available to buy in the brand’s new open-to-the-public couture store on Avenue George V, a departure from the hushed private salons that typically define the couture experience.

Demna is invested in the new faces of couture, sending handwritten welcome notes to clients such as Mr. Robertsson. First attending couture shows nine years ago, he’s since become one of their most visible consumers, buying six to eight looks a year (never over €100,000, he said) and wearing them to events such as the Met Gala. To this season’s Jean Paul Gaultier show, designed by Balmain’s Olivier Rousteing, he wore a red velvet gown with a train held aloft by two nearly naked tattooed men. (Friends, he clarified, from the porn industry). Mr. Robertsson’s own numerous tattoos include one of Xanax on his hand, to remind him to keep calm.

When Mr. Robertsson first started buying couture, he was rejected by some of the more established houses because he was a man. He heard similar stories of women being turned away if they didn’t fit the look—or the size—of a house. Today, he’s one of a small but growing group of men that buy and wear couture. He has close relationships with both the advisors who take care of top clients as well as progressive designers such as Pierpaolo Piccioli of Valentino (who staged his own couture show in Rome yesterday), Iris van Herpen and Demna.

Mr. Robertsson said he collaborates closely with designers on these looks, customizing both the fit and certain design elements. They typically involve three fittings, one in Paris on a toile (muslin), then one in Stockholm and a final one in Paris. Payment structure varies by customer, but Mr. Robertsson tends to put half down up front and half at the end.

When he spots something he wants on the runway, he immediately texts his client-relations contact to secure it. “You have to be fast,” he said, as typically either only one is made, or only sold to a single customer per continent. Oftentimes, because he favors out-there looks, he’s in competition with celebrities’ stylists, who will borrow the garment for a huge event, making it less unique for the client. He almost bought the voluminous black Balenciaga gown worn by Rihanna at the 2021 Met Gala. “If I would have bought that and press had sent it to Rihanna, I would have been so pissed,” he said.

After spending a week pestering everyone I met with the question, “Is couture keeping up with the times?” the theater producer and artist Jordan Roth threw it back at me: “Are the times keeping up with couture?” As someone who is steeped in the art and theater worlds, who has been collecting couture since Clare Waight Keller was the designer at Givenchy, he considers couture to be another art form. He explained, “They are pieces of work that you may want to collect or perform.”

Barrons : How Tequila Might Make Diageo Recession-Proof

How Tequila Might Make Diageo Recession-Proof

Investors considering drinks maker Diageo have to ask themselves one question. Do Americans feel the same way about tequila that Winston Churchill felt about Champagne?

Britain’s World War II hero clarified his affection for the French bubbly in both good times and bad thus: “In victory I deserve it. In defeat I need it.”

Diageo (ticker: DGE.UK), the world’s largest spirits maker and the owner of more than 200 brands including Smirnoff vodka, Johnnie Walker whisky, and Tanqueray gin, has made a big marketing bet on tequila and the U.S. market.

It paid off handsomely. The Mexican spirit, through its brands Don Julio and Casamigos, has generated a third of organic group sales growth over the past five years.

In the half year that ended in December, Diageo sales rose nearly 16%. They were boosted by people indulging in spirits at home during the pandemic, when lockdowns prevented them from enjoying drinks in bars and restaurants. Premium products made up more than half of net sales.

Now it’s betting that the strategy of premiumization—or getting people to pay more for products perceived to be superior—will help it excel amid the highest inflation rates in 40 years. The risk of recession is undermining consumers’ willingness to spend.

London-based Diageo employs 27,783 people and has a market value of $103 billion. Most of its sales are in spirits, with a substantial portion also coming from beers through brands such as Guinness.

Diageo fetches 22 times this year’s expected earnings and trades in line with the valuations of its peers. Shares have declined about 10.5% so far this year.

Of the 14 ratings collected by FactSet , eight analysts give it a Buy and four have it as a hold. The average price target is 41.62 pounds sterling ($50.30), with shares currently trading at a recent £34.93.

With the company due to report half-year earnings on July 28, two analysts have the stock as a Sell. They wonder if the guidance given last November is too good to be true. The company forecast that organic sales will increase 5% to 7% through 2025. That compares to 4% to 6% growth between 2017 and 2019.

While the pandemic caused a deep recession in 2020, government stimulus measures meant that people tended to have money to spend. Liquor was one of the few things they could splurge on as many social activities were shut down.

The downturn that might come next could be very different. Consumers are having to cut back on other things as they fill up on gasoline that costs $5 a gallon.

“We see Diageo being at risk of cyclical headwinds as consumer spending comes under pressure,” Deutsche Bank analyst Mitch Collett wrote in a note. The current “valuation is stretched.”

RBC Capital Markets analyst James Edwardes Jones, who has a price target of £28, says hitting the company’s guidance will be tough.

“Diageo is a really impressive, well-managed company,” Jones says. “But I don’t see how they can defy gravity. The U.S. economy feels like it’s heading into a relatively dark place.”

Investors might also remember that Diageo set ambitious growth targets back in 2011 that it was unable to achieve. And after years of rapid growth in tequila sales, the market may be maturing.

But it’s also possible that Americans will keep buying Diageo’s premium spirits while reining in spending elsewhere.

If a recession leads people to drown their sorrows in margaritas, the company should hold up well.

Barrons : Tim Cook Keeps Pushing Apple in New Directions

Tim Cook Keeps Pushing Apple in New Directions

Apple shares haven’t escaped the 2022 bear market: The stock is down about 20% year to date. Nonetheless, Apple remains the largest U.S. company by market cap, at $2.3 trillion, with most of that generated during CEO Tim Cook’s 11 years at the helm. And Cook sees many opportunities ahead.

More than half of Apple’s revenue comes from the iPhone, with an updated lineup due this fall. But Cook, 61, has been pushing in new directions, including an aggressive expansion into new services. Apple now offers streaming video, music, and games, along with credit cards, digital payments, and other financial services. He has also re-energized the Mac business, shifting the iconic computers away from Intel processors to powerful new in-house chip designs.

Cook’s challenge is to move the growth needle for a company with nearly $400 billion in annual sales. Apple is rumored to be working on cars, although for now the focus is on automotive software. At Apple’s recent developers’ conference, the company unveiled an aggressive expansion of its CarPlay platform, which connects iPhones to cars, to include every display in the cockpit.

Meanwhile, attention turns to augmented and virtual reality. While Apple hasn’t officially announced plans, Cook recently hinted that AR/VR glasses are on the way. “I could not be more excited about the opportunities in this space,” Cook said in a recent video interview with China Daily. “Stay tuned and you will see what we have to offer.”