Tesla shareholders just put all of their eggs in the Elon Musk basket—and it's an expensive one.

Musk just leveraged his position at Tesla to extort convince shareholders that he deserves $1 trillion—the largest pay package in history and far more than any peer CEO has ever been awarded. This afternoon, shareholders gathered to decide on Musk’s pay package, and will likely approve the gargantuan sum. Tesla shares sank 3.54% today.

The deets: The eye-popping package, which was first proposed by the board of directors in September, will give Musk up to $1 trillion worth of Tesla stock over the next decade if the company meets certain milestones, such as growing its profitability 30 times, quintupling its market value, and becoming a major AI and robotics powerhouse. Even if he doesn’t successfully meet the lofty performance goals, he will still get a payout in the tens of billions.

The logic justifying that paycheck goes something like this: Musk needs a worthwhile incentive to bring his attention away from his slew of other ventures and political antics. But critics of the package, like Norway’s $2 trillion sovereign wealth fund and CALpers, argue the deal gives Musk way too much power over Tesla, and that equating him with the brand itself isn’t necessarily good for the company.

It’s all about Elon

Adding fuel to the fire is the fact that Musk said if the package didn’t go through, he would abandon Tesla altogether, a threat that seriously spooked shareholders. While Musk has been a brazen and controversial figure, many Tesla investors see him as the messiah of AI and robotics, and argue that his presence at Tesla is quite literally priceless.

“In a nutshell, getting Musk's pay package approved will be a big step towards advancing Tesla's future goals with the autonomous and Robotaxi roadmap the first task at hand for Tesla and Musk,” wrote Wedbush analyst and Tesla bull Dan Ives in a note.

What’s next: The fight might not be over yet: Shareholders who voted nay today will likely sue to block the package, just as they did in 2018.

It’s never a dull moment for Tesla investors.—LB

🟢 What’s up

• Moderna is selling fewer Covid vaccines, but shares still rose 3.27% after the company revealed that cost-cutting measures helped make up the difference.
• Datadog jumped 23.13% after the cloud cybersecurity company posted a beat-and-raise earnings report.
• Brighthouse Financial soared 26.83% on confirmation that the insurer will be bought by Aquarian Capital for $4.1 billion.
• Speaking of acquisitions, Golden Entertainment rocketed 34.56% higher on the news that it will be bought by Blake Sartini, the casino operator’s chairman and CEO, for $30 per share.
• Snap soared 9.73% after the social media company announced a new $400 million deal with AI startup Perplexity.

What’s down

• CarMax plunged 24.37% on the news that the car seller has terminated its CEO, and that car sales will sink next quarter.
• Peloton slid 5.89% thanks to a recall of 833,000 units due to an issue with the seat post that injured two people.
• Qualcomm beat Wall Street forecasts last quarter, but still sank 3.63% thanks to sky-high investor expectations.
• Duolingo is focusing on user growth instead of making money, and shareholders don’t approve: The stock plummeted 25.49%
• e.l.f. Beauty beat on profit, missed on revenue, and lowered its full-year fiscal guidance, pushing shares down 35.04%.
• Airline stocks tumbled on the news that the FAA is canceling thousands of flights amid the ongoing government shutdown. United Airlines lost 0.96%, American Airlines fell 2.01%, and Delta Airlines dropped 1.21%.

The ongoing government shutdown means investors and central bankers alike must rely on private data in order to guesstimate how the economy is doing. Yesterday’s data from payroll processor ADP made a convincing case that the labor market is actually doing pretty well: Private employers added 42,000 new jobs in October, well above expectations of 22,000 and far better than the 29,000 jobs created in September.

But today brought data with a completely different tune from Challenger, Gray & Christmas. For such a cheerful name, the outplacement firm’s report was a real bummer: Companies cut 153,074 jobs last month, 183% more than in September, and the highest level for any October in 22 years. The biggest cuts came from tech companies restructuring their businesses around AI automation.

This new data raises the chances of the Fed cutting interest rates next month, but it seems central bankers aren’t so sure about their next move just yet. Fed Bank of Chicago President Austan Goolsbee said today that plenty of private data means the Fed can keep track of the jobs market more easily than it can detect a spike in inflation. That’s why he’s hesitant to cut rates until there’s more clarity about the whole economic picture.

Good labor market news one day and bad news the next, coupled with no October inflation report from the BLS, makes monetary policy more of a moving target than usual. Powell & Co. certainly have their work cut out for them.—MR

DraftKings and Fanduel-owned Flutter Entertainment have long dominated sports betting, but prediction markets Kalshi and Polymarket are quickly stealing their spotlight. These platforms let users bet on everything from elections to NFL games, and they’re gaining momentum thanks to a lighter regulatory stance from the Trump administration.

Flutter and DraftKings haven’t been having a great season. Their stocks both dropped more than 10% last month after Kalshi introduced parlay bets on NFL games, a move that drew record activity and signaled just how quickly the new platforms are eating into traditional sportsbooks’ turf. Bank of America piled on earlier this week, downgrading both companies and warning that rising competition, tax risks, and football-season volatility could cut each company’s EBITDA by upward of $100 million per quarter.

Don’t call it a comeback

But just as the outlook was starting to look bleak, DraftKings caught a break. ESPN ended its 10-year partnership with Penn Entertainment only two years into the deal after it failed to live up to early expectations. The Disney-owned company announced a new exclusive deal with DraftKings, giving the betting giant access to the biggest brand in sports. Starting Dec. 1, DraftKings will operate the betting tab in ESPN’s app, integrating its sportsbook and fantasy offerings directly into the platform—an advantage that could help it win back some of the ground it’s lost to prediction markets.

Penn Entertainment sank 10.4%, while DraftKings rose 0.21% after the announcement. Jefferies analyst David Katz said the partnership could drive incremental volume, leveraging ESPN’s massive user funnel and DraftKings’ back-end product capabilities. Katz has a Buy rating and $51 price target on the stock (82.3% higher than where shares trade today), reflecting his confidence in the company’s long-term outlook.

But can it hold the lead?

Still, the wide world of sports betting is getting smaller as prediction markets offer a new way to gamble—and they're not going away anytime soon.

Robinhood, for one, has leaned in hard: The company doubled its revenue last quarter, with EPS up 259%, driven in part by its fast-growing prediction markets business. The product became Robinhood’s quickest ever to reach $100 million in annualized revenue, as users flocked to wager on roughly 1,100 listed events.

After years abroad due to regulatory hurdles, prediction market platform Polymarket is also preparing its US comeback later this month. The platform has already seen record momentum, with monthly active traders hitting an all-time high of 477,850 in October.

The ESPN deal is a much-needed win for DraftKings, but with prediction markets gaining ground, it might just be a short breather before the next big fight.—SY

• The FAA is reducing flight traffic by 10% at 40 airports due to the government shutdown. Here are the airports being affected.
• Google is going toe-to-toe with Nvidia with Ironwood, the company’s most powerful chip ever.
• Amazon raised its prices due to tariffs more than retailers like Walmart and Target.
• Meta Platforms reportedly projected that 10% of sales in 2024, or $16 billion, came from running ads for scams.
• But seriously: What happens if the Supreme Court strikes down tariffs?
• Eli Lilly and Novo Nordisk agreed to cut the prices of their weight-loss drugs in exchange for tariff relief and access to Medicare patients. Here’s how much they could cost.

No government means no monthly US employment report, leaving the Fed to continue flying blind. But there are a few private sources providing data tomorrow: the University of Michigan’s preliminary consumer sentiment survey will tell us a bit about how Americans feel these days, while the consumer credit report will reveal how they’re spending (and how much debt they’re in).

We’ll also get plenty more Fedspeak, with comments and speeches from Fed Vice Chair Philip Jefferson, Fed Governor Stephen Miran, New York Fed President John Williams, and Dallas Fed President Lorie Logan.

As for earnings, things simmer down a bit heading into the weekend. We’ll hear from Constellation Energy, KKR, and Wendy’s, among a handful of others.