Elon Musk said SpaceX and Tesla are studying a possible merger, Jio Platforms began India’s largest planned share offering, Netflix shares slid after a weaker advertising outlook, Sydney’s second airport readied for its first passengers, and gambling group Flutter announced up to 1,400 job cuts in the United Kingdom and Ireland.
Musk says SpaceX and Tesla have set up committees to study a merger
Elon Musk said on Tuesday that combining SpaceX and Tesla would be a good idea and that special committees had been created to examine a possible deal. He stressed that nothing had been agreed and that a merger was not guaranteed. With Tesla valued at about 1.5 trillion dollars and SpaceX at around 2 trillion, a combination would be the largest corporate merger on record. SpaceX shares gained 8% in after-hours trading, while Tesla rose 2%.
Musk, who runs both companies, said they overlap in chips, artificial intelligence and other technology, and that the deal would join Tesla’s cars, robots and self-driving systems with SpaceX’s rockets, satellites and data centres. Half of Tesla’s shareholders would need to approve, a level Musk himself called a high hurdle, and he cannot take part in their discussions. Analysts said the merger would give Musk more voting control and could draw regulatory scrutiny after the US midterm elections next month.
SpaceX was founded by Musk in 2002 with the aim of cutting launch costs and eventually settling Mars. It flies the reusable Falcon 9 rocket and the Dragon spacecraft, and its Starlink satellite network has become its main source of income. This year it absorbed Musk’s artificial intelligence company xAI, which also brought the social network X under its control, before listing its shares publicly. Musk owns about 39% of SpaceX but holds most of the voting power through special shares.
Jio Platforms opens what is expected to be India’s largest share sale
Jio Platforms, the digital and telecoms arm of Mukesh Ambani’s Reliance Industries, opened its initial public offering on Wednesday, aiming to raise 302 billion rupees, or about 3.2 billion dollars, through newly issued shares. The money will repay loans taken to build out Reliance Jio Infocomm, the country’s biggest private telecoms operator. Shares are priced between 1,065 and 1,119 rupees, and the offer closes on Friday. Institutional investors bid about 3.2 billion dollars on Monday for the portion reserved for them.
The listing follows a 2.4 billion dollar offering by the National Stock Exchange a month earlier, even though the Nifty 50 index has lost more than 12% this year. Analysts pointed to Jio’s scale and network, while warning of price wars and regulatory exposure in a closely supervised sector. The offer is Reliance’s first in two decades, and roadshows were led by Ambani’s twins, Akash and Isha. Musk has recently criticised Ambani as Starlink seeks final approval to launch in India.
Jio Platforms was set up in 2019 as a Mumbai-based holding company for India’s largest mobile network, Jio, and the other digital businesses of the Reliance group. In 2020 it sold a combined stake of almost 33% to outside investors, raising more than 1.5 trillion rupees, then worth over 20 billion dollars. Reliance has long cultivated a loyal base of small shareholders, and its founder, Dhirubhai Ambani, described them as part of an extended family of the company.
Netflix shares fall as the streamer cuts its advertising forecast and vows better US shows
Netflix reported its third-quarter results on Tuesday, beating several forecasts but posting its slowest revenue growth in years. The company lowered its expected advertising revenue for the year to 2.7 billion dollars from 3 billion, and its shares fell by almost 6%. Executives acknowledged investor concern over slowing growth in viewing hours, especially in the United States. Co-chief executive Ted Sarandos said the company knew it could do better and planned to raise the level of its American programming.
The results followed the company’s biggest round of layoffs in about four years, with roughly 1,000 jobs cut last week, and the departure of content chief Bela Bajaria and film head Dan Lin. Former Disney executive Peter Rice replaces Bajaria. Co-chief executive Greg Peters called the job cuts a hard trade-off for long-term growth. Sarandos said there was no need for a fundamental change of strategy but that execution in the United States had to improve.
Netflix began as a DVD-by-mail rental business before launching its streaming service in 2007. It is now the most-subscribed streaming platform in the world, with about 325 million paid memberships in more than 190 countries. Its shares have lost more than 40% over the past year, a decline that began with an abandoned attempt to buy Warner Bros. Discovery, which later became part of Skydance. Competition for viewers’ time from YouTube and TikTok has weighed on investors.
Western Sydney International prepares to open to passengers on Sunday
Western Sydney International (Nancy-Bird Walton) Airport, Australia’s first new major international airport in five decades, opens to passengers on Sunday 25 October. A Jetstar service to the Gold Coast will be the first commercial departure, and Air New Zealand will fly the first international route, to Auckland, the following day. Unlike the city’s main airport, the new site has no curfew and can handle flights at any hour. Chief executive Simon Hickey said travellers would reach more than 250 destinations within 14 months.
The airport sits near Luddenham and Badgerys Creek, between Penrith and Campbelltown, and connects to the motorway network through the toll-free M12. Singapore Airlines, Fiji Airways, Vietjet, Qatar Airways and Qantas plan services over the next year, and Emirates has approval for daily flights. A metro line is not due until late next year, so buses and a shuttle from St Marys station will carry passengers. Operators expect 10 million passengers a year by the 2030s and jobs for 8,500 people.
The federal government chose the site in April 2014 after decades of debate over where to build a second airport for Greater Sydney. The airport is run by WSA Co, a company fully owned by the Australian government, and construction of the first stage, with one runway of 3.7 kilometres and a single terminal, began in 2018. Cargo flights started in July. Later stages could add a second runway and lift capacity to roughly 82 million passengers a year.
Flutter plans to cut up to 1,400 UK and Ireland jobs and blames higher gambling taxes
Flutter Entertainment, owner of Paddy Power, Sky Bet and Betfair, said on Tuesday it would cut up to 1,400 jobs, around 15% of its staff in the United Kingdom and Ireland. Workers in Leeds and Dublin, along with teams serving that business from Portugal and Romania, are expected to be most affected. Kevin Harrington, who heads the UK and Ireland division, said the company could not fully absorb higher betting and gaming duties without restructuring.
Remote gaming duty on online casino games rose from 21% to 40% in April, and online betting duty is due to climb from 15% to 25% next year. Harrington said the increases had changed the economics of the regulated industry and helped the unlicensed market. A government spokesperson called the cuts a commercial decision for the company. Flutter said the restructuring would cost 80 to 90 million dollars, and the announcement came a week before a budget the industry fears may bring further taxes.
Flutter is an Irish-American group and the world’s largest online betting company, with brands that also include FanDuel, PokerStars and Sportsbet. It employs about 28,500 people worldwide and moved its main share listing to New York, leaving the London Stock Exchange in August. In the three months to June it reported a pre-tax loss of 299 million dollars, against a profit a year earlier. Rival Entain, owner of Ladbrokes and Coral, also announced job cuts earlier this year.