Tesla’s Nordic Wreck

Plus: How Big Pharma takes advantage of a voucher program to fund blockbuster drugs. ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

December 22, 2023

Good morning. Who scooped whom?  Defunct Ozy Media sued Buzzfeed, Semafor, and Semafor co-founder Ben Smith in federal court Thursday, alleging that Smith's launch of Semafor in late 2022 came after he was privy to Ozy's operations when trying to buy it in 2019 while editor-in-chief at Buzzfeed. Smith subsequently left for The New York Times, where he reported that Ozy COO Samir Rao impersonated a YouTube executive on a conference call with Goldman Sachs while trying to secure a $40 million investment. Early this year, Ozy founder Carlos Watson was arrested and charged with multiple counts of fraud and one count of identity theft. This case of journalism ethics largely will come down to: Did he jump or was he pushed? Note to readers: The Daily Upside will be back on Tuesday, December 26. We wish all our readers a wonderful holiday season!

ELECTRIC VEHICLES Tesla's Nordic Headache Intensifies Tesla made the naughty list on Santa's home turf of Scandinavia. Following a Reuters investigation published earlier this week into tens of thousands of complaints about parts failing on new Tesla vehicles, Norway's road regulator says it's looking into Tesla's suspensions — and its inquiry could result in a recall by Christmas. This new yuletide shadow hangs over the company while it's still engaged in an increasingly hostile fight with unions from Copenhagen to Svalbard.  Scandi Bête Noire Tesla's Scandi-woes began in late October, when 130 Swedish Tesla mechanics laid down their tools to protest the company's refusal to reach a collective bargaining agreement. CEO Elon Musk is no fan of unions, but in Scandinavia they're a fact of doing business. Political scientist Yohann Aucante told France 24 that 70% of Swedish workers belong to a union, and 90% of all employees are covered by a collective bargaining agreement. As the fight escalated, other Swedish unions began to withhold their labor from Tesla in solidarity, then unions in Norway, Denmark, and Finland joined the fray. Tesla tried to fight back in Sweden's courts after the country's postal union stopped delivering license plates for the company — but to no avail, the court ruled in favor of the union. The sympathy actions against Tesla weren't restricted to unions, either: Pension funds in Norway and Denmark have tried to put the squeeze on Tesla. PensionDanmark publicly dumped its shares in the company, which the AP reports to be worth $70 million. Denmark's teachers' pension fund also jettisoned around $35 million in Tesla shares. Even for teachers, that's pretty strict. Auto analyst Mathias Schmidt told the AP that Tesla's attempt to force the postal workers to deliver its license plates through legal action exacerbated the situation, "making unions more steadfast and creating sympathetic actions across the country." Tesla is facing the prospect of a big union drive on home turf as well. The United Auto Workers union, emboldened by the deals it struck with legacy automakers this year, declared it will try to unionize the company. Elon Giveth, and Elon Taketh Away:  This week, Tesla announced it's raising hourly salaries for workers at its Nevada battery factory by 10% or more. However, the goodwill might be short-lived as Bloomberg reported Tuesday that the company is skipping stock awards this year. Incidentally, in 2018 Musk was sanctioned by the National Labor Relations Board for tweeting: "Nothing stopping Tesla team at our car plant from voting union ... But why pay union dues & give up stock options for nothing?" Why indeed, when you can pay no fees and lose your stock anyway! Written by Isobel Asher Hamilton

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HEALTHCARE Big Pharma Uses Subsidies for Rare Diseases to Develop Blockbuster Drugs It's the pharmaceutical industry's version of Pokémon cards — and the big kids on the playground are hogging all the shiny Charizards. According to a Thursday report from Bloomberg, a US government program designed to incentivize drugmakers to develop treatments for rare tropical diseases has ended up subsidizing drugs that really don't need any help selling themselves.  Thumbs on the Scale Bloomberg's report focused on a 16-year-old federal program called priority review vouchers (PRVs), which essentially let companies expedite the development of treatments for rare tropical and pediatric ailments. However, pharma firms can sell them — so while they may initially be granted as a reward for a company that's contributed to tackling rarer, not-especially-profitable diseases, the voucher can end up getting passed around until it subsidizes an entirely different kind of drug. Bloomberg's analysis found that major drug companies have increasingly availed themselves of the program in recent years, and even used the vouchers to fund development for sure-fire profit-generators: Eli Lilly used a voucher to hasten its diabetes/weight-loss drug (and Wegovy competitor) Mounjaro to market by about four months. In November, Lilly reported that Mounjaro had brought in $1.4 billion over the course of the previous quarter. Mounjaro isn't the only "unicorn" drug getting a headstart out of the gate. At least eight drugs which ended up netting a cool $1 billion in annual revenue for their developers have benefited from priority review vouchers, according to Bloomberg's analysis. If Bloomberg's analysis is correct, you can think of PRVs as the pharmaceutical industry's answer to carbon credits — nice in theory, but once they're tradeable their meaning can just get lost in the corporate tapestry of major companies. Underdrug Story: The boom in vouchers awarded meant their value sank, meaning smaller companies and nonprofits made less money selling them — money that previously went towards researching the diseases for which the vouchers were originally intended. Two studies cited by Bloomberg suggested the program has had no real impact on how many rare disease treatments get developed.  Written by Isobel Asher Hamilton

CONSUMER New York City's Airbnb Ban is Driving Up Hotel Prices Photo by Dan Soriano via Unsplash Forget the rent, the hotel prices are too darn high! With New York City recently putting the kibosh on Airbnb and similar short-term rental platforms, demand for hotels has increased and prices are skyrocketing this holiday season. The Double-Edged Sword Property owners see Airbnb as a way to supplement income and help boost tourism. But a less positive side effect is seeing wealthy hosts accumulate multiple properties for vacation rentals that drive up property values to unaffordable levels and create housing shortages.  In a working paper from Harvard Business Review, researchers found that a 1% increase in Airbnb listings in any zip code caused a fraction of a percent increase in both rental rates and housing prices. That may seem small, but Airbnb's average yearly growth is about 44%, and the study concluded that the rate contributes to about 20% of the average annual increase in US rents. Cities around the world have responded with stricter regulations: Starting in September, NYC required that: short-term rentals (units leased for fewer than 30 days) be registered with the city, hosts must be physically present during rental stays, and no more than two guests can rent out a property, regardless of size. Violating the rules can mean a $5,000 fine  — you know, the price of a closet in Manhattan. Airbnb has seen its NYC listings fall a staggering 75% in the past two months, essentially eliminating it as a competitor to hotels, The New York Post reported. The average hotel room now goes for $530 per night, an almost 20% increase from Thanksgiving weekend, according to Trivago's Hotel Price Index.   Fixer-upper: If more cities follow NYC's lead, could this be the end of Airbnb? It also hasn't helped that the company copped to cracks in its quality assurance. In an interview with Bloomberg, Airbnb CEO Brian Chesky said there's been too many instances of customers paying for a rental property and it being far worse than what the listing offered. In some cases, the property didn't even exist. Written by Griffin Kelly

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Extra Upside Cybercrimes: Hacker sentenced to a secure hospital indefinitely for aiding in cyberattacks on Uber, Nvidia, Rockstar Games and more.  Fishy business: conservationists are suing the UK government over its post-Brexit fishing policy. White Light/White Meat: All the fast-food chains are trying to copy Chick-fil-A.

Just for Fun Mulligan. Ride along.

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