New York (CNN Business) It seems that Elon Musk’s impressive expertise – notwithstanding the combination of wealth, carefully honed charm, and distinguished lawyers who helped him escape countless scandals unscathed – is beginning to unravel.
Here’s the deal: Federal regulators just announced that Musk’s private space tourism company, SpaceX, will not receive the nearly $900 million in subsidies it received last year because the company “failed to prove it can deliver” the internet service it promised.
Let’s go back for a minute.
- In December, the FCC auctioned $9 billion in subsidies to internet service providers as part of a plan to bring high-speed internet to rural areas in need.
- The fact that SpaceX received one of the largest segments of this support program was controversial because the Starlink network was essentially new and untested.
- The Starlink system is very different from traditional high-speed internet, which is based on underground fiber optic cables. However, Starlink relies on thousands of satellites working in concert to transmit Internet access on Earth.
- The FCC was basically betting that Starlink would be camera-ready soon enough.
That gamble appears to backfire, as the FCC is withdrawing the subsidies, saying the Starlink service is “still developing technology” and its speeds have slowed, my colleague Jackie Wattles says.
SpaceX did not respond to a request for comment, as is often the case with companies run by Musk.
The Big Picture
Part of Elon Musk’s visionary personality and mega-billionaire (believe it or not) is that he runs several companies with big ambitions, such as colonizing Mars, in the case of SpaceX.
Even if his tricks — over-promises, reckless tweets, reckless corporate forays, naming one of his sons X Æ A-12 — are annoying to you, you still have to appreciate the boldness.
But now it looks like Musk’s bad behavior may finally catch up to him.
In recent days, Musk has sold nearly $7 billion of Tesla stock in the event he loses his legal battle with Twitter and is forced to buy the company, which he no longer wants. At the same time, California officials filed a complaint alleging that Tesla lied in advertisements regarding autopilot technology and fully autonomous driving (which, despite its names, is not entirely independent).
In June, when several SpaceX employees signed a letter criticizing Musk’s behavior, the company fired at least five of the people involved. A month later, a massive prototype of the SpaceX rocket exploded during launch. What is Musk’s response to that on Twitter?
“Yeah, that’s not really good.”
We can say the same about Musk now.
Day count: 8.5%
Today’s inflation headline was a bit more upbeat than expected, with July’s annualized CPI reading of 8.5%, much slower than 9.1% in June, but still historically high.
This is good news and we should all take a moment to savor it. More good news: overall prices didn’t rise at all between June and July. The last month in which prices did not rise was November 2020.
However, not all news is good. Prices haven’t gone up for one reason, and one reason only: lower energy costs, which are notorious for their volatility. If you exclude these, prices will go up in almost every other category.
Bottom line: The July report suggests that the Fed’s rate hike may not have the desired effect. It is possible that higher energy prices have eased as demand has begun to dry up.
Imagine you’re in the room when someone at Domino’s, the most average purveyor of pizza on the planet, came up with the idea of entering the Italian market.
Look, what we are going to do is take objectively lower quality American pizza and sell it to the same people who invented pizza for whom food is not only a source of national pride but, in one way or another, the cornerstone of Italian cultural identity…
That’s crazy, the chief replies. It’s crazy that it can work…
Spoiler alert: It didn’t happen.
After seven years of trying to make it big in Italy, Domino’s has officially closed all of its sites, according to Italian media.
Domino’s had big plans when it launched on the Italian market in 2015, signing a 10-year franchise agreement with a Milan-based company called ePizza. Together, they planned to introduce a large-scale pizza delivery service in the country, which did not actually exist at that time.
It was not an immediate disaster. At the beginning of 2020, ePizza operated 23 stores in Italy and six others through a subsidiary franchise partner.
But it turns out that the Italians preferred Italian pizza to the American kind, with its signature American ingredients, like pineapple.
Who could have guessed? (Aside from everyone sure?)
While some might attribute Domino’s failure to its brazen attempt to infiltrate the home of pizza, ePizza blamed its demise on competition from food delivery apps.
EPizza filed for bankruptcy in April, after it struggled to generate enough sales during two years of pandemic restrictions amid “unprecedented competition” from local restaurants.