Musk’s Politics Dent Tesla’s Appeal
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What are the current geopolitical tensions involving the U.S., Israel, and Hamas?
The U.S. threatens joint action with Israel against Hamas unless the group releases all hostages from Gaza. Plus, Walgreens gets a fresh chance to fix its business with new owners and away from the public eye. And Tesla's fortunes fall as Elon Musk rises in Trump's world.
We're seeing people are more embarrassed to own Teslas. There's bumper stickers, people saying they bought their Teslas before Elon went crazy. There's protesters outside of the store, and that's changing the brand perception dramatically.
It's Friday, March 7th. I'm Luke Vargas for The Wall Street Journal, and here is the AM edition of What's News, the top headlines and business stories moving your world today. Nearly a week since the expiration of an Israel-Hamas ceasefire, President Trump's Middle East envoy is floating the threat of joint U.S.-Israeli action against Hamas if it doesn't release all hostages from Gaza. Here was Steve Witkoff outside the White House.
I think there's going to be some action taken. It could be jointly with the Israelis. It's unclear right now, but I think Hamas has an opportunity to act reasonably, to do what's right, and then to walk out. They're not going to be a part of a government there.
Witkoff said he hoped the situation could still be resolved diplomatically, and the Trump administration confirmed this week it had engaged in direct talks with Hamas, its first publicly acknowledged discussions with the group since the start of the war in October 2023. But as journal correspondent Dov Lieber told me, Gaza-related negotiations are increasingly taking place outside of the ceasefire framework agreed to in the waning days of the Biden administration.
Israel is hoping the U.S. can help it force Hamas to release more hostages at this current stage without agreeing to any kind of ceasefire or without making any kind of strategic retreats from the Gaza Strip. Israel is still controlling this border between Gaza and Egypt that allows Israel to keep full control of things going in and out of Gaza. And what we're seeing right now is a considered effort by Israel and the United States to force Hamas to release more hostages without Israel and Hamas having to negotiate what is a seemingly unbridgeable issue for them, which is how this war will end.
Meanwhile, top American officials are prepared to meet their Ukrainian counterparts next week in Saudi Arabia to set the stage for potential peace talks with Russia. The meeting, which could signal a healing of relations between Kiev and Washington, comes as the Trump administration believes Ukrainian President Volodymyr Zelensky has apologized following last week's contentious Oval Office meeting with President Trump and signaled he wants to work towards peace. Walgreens is going private. The embattled drugstore chain agreed yesterday to a buyout deal with Sycamore Partners valued at $10 billion, less than a tenth of what the company was worth a decade ago. It's an agreement that Journal of Pharmaceuticals reporter Joseph Walker says will allow Walgreens' new owners to try and fix the struggling business out of the public eye.
A lot remains to be seen as to exactly how Sycamore will go about this. Some of the plans already underway to shrink the Walgreens footprint across the U.S. will continue. The company has said that it plans to close about 1,200 stores over the next few years. We also expect to see the company's different divisions split up. So maybe the pharmacy business will be split up from the pharmacy and wholesaling business in Europe and perhaps as well the Boots Pharmacy in the U.K., which is a favorite of our friends across the pond.
Walgreen's shares are up in off-hours trading, closing in on the $11.45 share price that Sycamore agreed to pay. And in other market news today, Chinese exports over the first two months of the year have come in weaker than expected amid rising trade tensions with the U.S. According to official data, exports grew 2.3 percent compared with the same period a year earlier, falling short of the 4.5 percent economists polled by the journal had forecast. The crypto world is reacting to President Trump's executive order yesterday establishing a strategic Bitcoin reserve.
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