Elon Musk closes deal to acquire Twitter, fires top execs: Source

CARINA JOHANSEN/NTB/AFP via Getty Images

(NEW YORK) — Tesla CEO Elon Musk has closed a deal to acquire Twitter, ending a monthslong saga that cast Musk as suitor, critic, legal adversary and ultimately owner of the social media platform.

A source familiar with the matter confirmed the deal closure to ABC News on Friday morning. Some of Twitter’s top executives were fired, including CEO Parag Agrawal, chief financial officer Ned Segal, chief legal officer Vijaya Gadde and general counsel Sam Edgett, and the company will likely be launching an internal investigation, according to the source.

Meanwhile, the New York Stock Exchange confirmed on Friday morning that Twitter shares are now suspended for trading, which means the social media platform is headed for delisting and is no longer a public company.

On Thursday night, Musk tweeted, “The bird is freed.”

The Washington Post, The New York Times and The Wall Street Journal were among the first outlets to report the news on Thursday evening, also citing sources familiar with the matter.

Musk — the richest person in the world, according to Forbes — reportedly acquired Twitter at his original offer price of $54.20 a share at a total cost of roughly $44 billion.

On Wednesday, Musk posted a video of himself walking into Twitter’s offices with a sink, with the tagline: “Entering Twitter HQ – let that sink in!”

After initially reaching an acquisition deal with Twitter in April, Musk moved to terminate the agreement in July, citing concerns over spam accounts on the platform.

Soon after, Twitter filed a lawsuit against Musk over his effort to nix the deal. The judge in the trial, set to take place in Delaware Chancery Court, gave Musk a deadline of Friday to reach a deal or proceed with the trial.

The deal completes a courtship that started in January when the billionaire first invested in Twitter.

By March, Musk had become the largest stakeholder in Twitter with the social media company announcing in April that Musk would join its board. Days later, however, Musk said he had decided against joining the board.

In April, Musk offered to buy Twitter at $54.20 per share, valuing the company at about $44 billion. The offer amounted to a 38% premium above where the price stood a day before Musk’s investment in Twitter became public. Roughly 10 days later, Twitter accepted Musk’s offer.

One month later, however, Musk said he had put the deal “temporarily on hold,” citing concern over what he said was the prevalence of bot and spam accounts on the platform. Roughly two hours later, Musk said he was “still committed” to the deal.

Twitter said it had provided Musk with information in accordance with conditions set out in the acquisition deal.

Eventually, Musk moved to terminate the deal in July. Soon after, Twitter sued Musk in Chancery Court in Delaware to force him to complete the deal.

A scheduling decision made by the court in July — to hold the trial over five days in October — appeared to align more closely with a timeline requested by Twitter, which had sought a four-day trial in September. Musk asked the court to set a trial date no earlier than mid-February 2023.

Now, the court case is off and the deal is done.

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Elon Musk closes deal to acquire Twitter: Reports

CARINA JOHANSEN/NTB/AFP via Getty Images

(NEW YORK) — Tesla CEO Elon Musk reportedly closed a deal to acquire Twitter on Thursday, ending a monthslong saga that cast Musk as suitor, critic, legal adversary and ultimately owner of the social media platform.

The Washington Post, The New York Times and Wall Street Journal were among the outlets to report the deal closure, citing sources familiar with the matter. ABC News has not confirmed.

Later Thursday night, Musk tweeted, “The bird is freed.”

Musk — the richest person in the world, according to Forbes — reportedly acquired Twitter at his original offer price of $54.20 a share at a total cost of roughly $44 billion.

On Wednesday, Musk posted a video of himself walking into Twitter’s offices with a sink, with the tagline: “Entering Twitter HQ – let that sink in!”

After initially reaching an acquisition deal with Twitter in April, Musk moved to terminate the agreement in July, citing concerns over spam accounts on the platform.

Soon after, Twitter filed a lawsuit against Musk over his effort to nix the deal. The judge in the trial, set to take place in Delaware Chancery Court, gave Musk a deadline of Friday to reach a deal or proceed with the trial.

The deal completes a courtship that started in January when the billionaire first invested in Twitter.

By March, Musk had become the largest stakeholder in Twitter with the social media company announcing in April that Musk would join its board. Days later, however, Musk said he had decided against joining the board.

In April, Musk offered to buy Twitter at $54.20 per share, valuing the company at about $44 billion. The offer amounted to a 38% premium above where the price stood a day before Musk’s investment in Twitter became public. Roughly 10 days later, Twitter accepted Musk’s offer.

One month later, however, Musk said he had put the deal “temporarily on hold,” citing concern over what he said was the prevalence of bot and spam accounts on the platform. Roughly two hours later, Musk said he was “still committed” to the deal.

Twitter said it had provided Musk with information in accordance with conditions set out in the acquisition deal.

Eventually, Musk moved to terminate the deal in July. Soon after, Twitter sued Musk in Chancery Court in Delaware to force him to complete the deal.

A scheduling decision made by the court in July — to hold the trial over five days in October — appeared to align more closely with a timeline requested by Twitter, which had sought a four-day trial in September. Musk asked the court to set a trial date no earlier than mid-February 2023.

Now, the court case is off and the deal is done.

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How massive avian flu outbreaks will impact Thanksgiving turkey supply, prices

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(NEW YORK) — As avian flu outbreaks continue to ravage poultry production in the U.S. and overseas, turkey availability has drastically dropped and experts say the devastating wave shows no signs of letting up ahead of the Thanksgiving and holiday seasons.

According to the U.S. Department of Agriculture’s Livestock, Dairy, and Poultry Outlook report for October, turkey production will be lower than usual for the remainder of 2022 into early 2023 as a result of the deadly Highly Pathogenic Avian Influenza outbreaks.

“Turkey exports are adjusted slightly lower in 2022 and slightly higher in 2023, while imports are adjusted up in both years. Turkey prices are adjusted up on recent trends and lowered production expectations,” the USDA report stated.

As of the time of publication, USDA Animal and Plant Health Inspection Service data confirmed that 249 commercial flocks have been affected across 25 states with 47.76 million birds infected in total.

Farmers across the U.S. have reported horrific incidents of HPAI strains to the USDA that have wiped out entire flocks, and in other cases acted as a catalyst for farmers to cull infected birds in order to prevent the virus from spreading further.

Last month, the American Farm Bureau Federation announced that “families can expect to pay record high prices at the grocery store for turkey” due to bird flu and inflation.

The USDA reported that more than six million turkeys have died due to the virus nationwide thus far — nearly 14% of the total U.S. turkey production.

As a result, farmers are putting a premium on the birds that have remained healthy and ready for consumption.

According to a USDA report dated Oct. 21, combined with inflation, consumers can expect to pay around 20% more per pound for whole frozen turkeys this year, as compared to the price point at the same time last year. Ground turkey as well as bone-in and boneless drumsticks, cutlets and wings have also risen in price since last year.

For those still able or willing to take on the price hikes, the Centers for Disease Control and Prevention advises proper handling and cooking of all poultry and eggs to an internal temperature of 165 degrees Fahrenheit, as a general food safety precaution.

In the meantime, federal and state partners, according to the Animal and Plant Health Inspection Service, are working jointly to monitor and test areas near affected flocks to actively identify any disease in commercial poultry operations, live bird markets and in migratory wild bird populations.

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Threat of nationwide rail strike grows after second union rejects labor deal

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(NEW YORK) — A union representing 6,000 rail workers said its members have voted against ratifying the tentative agreement brokered between rail companies, unions and members of President Joe Biden’s administration in September.

The vote by the Brotherhood of Railroad Signalmen, the second union to reject the White House-brokered deal, elevates the likelihood of a nationwide strike when a negotiation deadline arrives in November.

The potential work stoppage could paralyze the nation’s supply chain and transportation rail service as the U.S. enters peak holiday season.

White House Press Secretary Karine Jean-Pierre, when asked about the union vote during a briefing on Wednesday, said Biden “remains focused on protecting America’s families, farms and businesses by avoiding a rail shutdown.”

“We continue to urge both sides to work in good faith and avoid even the threat of a shutdown,” she added.

The vote against the contract centered on frustration with a lack of paid sick days, according to a statement from Brotherhood of Railroad Signalmen President Michael Baldwin.

“For the first time that I can remember, the BRS members voted not to ratify a National Agreement,” he said.

The rejection of the deal came despite a 24% compounded wage increase and preservation of the members’ health care benefits, Baldwin added.

The National Carriers’ Conference Committee, or NCCC, which represents freight railroads in national collective bargaining, expressed disappointment over the union vote.

The tentative contract “included the largest wage package in nearly five decades, maintained rail employees’ platinum-level health benefits, and added an additional day of paid time off,” the NCCC said in a statement.

The contract was rejected by roughly 60% of members in the the Brotherhood of Railroad Signalmen, while nearly 40% voted in favor of the deal, the union said. The vote garnered the highest participation rate in union history, it added.

In all, 12 unions representing 115,000 workers stand to ratify a labor agreement with rail companies. The Brotherhood of Maintenance of Way Employees division of the Teamsters, which represents 12,000 members, rejected the tentative agreement earlier this month.

Six unions have ratified the deal brokered by the White House, the NCCC said.

The two largest rail unions — the Brotherhood of Locomotive Engineers Trainmen, or BLET, and the SMART Transportation Division, or SMART-TD, which make up roughly half of all rail workers — are set to finish voting in the middle of next month.

The unions that voted down the agreement have vowed to continue negotiations at least until Nov. 19, when a strike could ensue.

“The artery of the US economy is the rail system. It’s one of the ways we get everything around. One third of everything gets around this way. And when you cut it, you have a stroke,” Diane Swonk, chief economist at global tax firm KPMG, previously told ABC News.

A potential strike could lead to $2 billion a day in lost economic output, according to the Association of American Railroads, which lobbies on behalf of rail companies.

Freight railroads are responsible for carrying 40% of the nation’s long-haul freight and a work stoppage could jeopardize these shipments.

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Uber drivers will make fewer left turns, be able to video record for safety

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(NEW YORK) — Uber drivers will take fewer left turns and soon be able to record rides through their smartphones as the ride-share company makes changes geared toward safety in the driver’s seat, officials said.

The company announced Thursday that it is launching a new pilot program in which certain drivers in three U.S. cities and in Brazil can use their phone’s front-facing camera to record audio and video during trips.

“Recording can just improve and make interactions on the Uber platform a little bit more comfortable because everyone knows that they’re going to be held accountable for their actions,” Rebecca Payne, group product manager on safety at Uber, said in an interview with ABC News.

The pilot is an expansion of the company’s already existing audio recording feature, in which drivers and passengers can both opt to record audio of trips.

Passengers will be notified after requesting a trip that their driver will be video-recording the ride, Uber said. If they don’t feel comfortable being recorded, passengers can cancel at no extra cost.

“We’ve seen many instances where this technology has helped us determine the best course of action after a safety incident, and the majority of riders and drivers in the pilot cities told us this feature helped them feel safer when using Uber,” the company said in a news release.

The new video recording technology will be available to select drivers in Cincinnati, Louisville and New York City as well as Santos and João Pessoa in Brazil, Uber said.

When asked about privacy concerns, Uber said the driver’s video recordings will be encrypted and stored directly on the driver’s device but inaccessible even to them.

“No one can access it … even Uber can’t access it,” Payne said. “If nothing bad happens on the trip, that recording will essentially just disappear after seven days.”

But should a safety incident occur during a trip, the driver could attach the encrypted video file to the safety report sent to Uber. Once the company had the report, the file would then be decrypted and a trained safety agent would review it to help determine what occurred, the Uber said.

The company also announced Thursday it will update its in-app navigation software to suggest drivers make fewer left turns. According to the National Highway Traffic Safety Administration (NHTSA), 22% of crashes involved a car making a left turn at an intersection.

“Essentially what it does is when a rider puts in the destination, our algorithm and our navigation will choose a routing to reduce those lectures as much as possible without adding any additional time or cost for the trip,” Kristin Smith, Uber’s head of road safety policy, told ABC News. “We’re hopeful that this will be one of those tech interventions that can help to really improve road safety.”

ABC News’ Sam Sweeney contributed to this report.

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US economy grew significantly in third quarter, ending six months of shrinking

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(WASHINGTON) — The U.S. economy expanded significantly to kick off the second half of the year, marking a dramatic reversal from the contraction experienced over the first six months, government data showed.

U.S. gross domestic product grew 2.6% over the three months ending in September, according to data released Thursday. By contrast, economic activity shrank a combined 2.2% over the first six months of the year.

The economic growth defies Federal Reserve efforts to slow economic activity and slash consumer demand in its fight against inflation.

The data arrives less than two weeks before the midterm elections, possibly bolstering Democratic claims of economic stewardship as polls show voters prefer Republicans on the issue.

Fears of an imminent recession may quiet in response to the data, which ends the streak of two consecutive quarters of negative GDP that many consider shorthand for identifying a downturn as a recession.

The National Bureau of Economic Research, or NBER, a research organization seen as the formal authority for identifying recessions, uses a more complicated definition that takes into account an array of factors. Many economists believe the U.S. has averted a recession so far this year.

Still, the positive overall indicator may veil signs of a cooling economy. The economic growth stemmed in part from a reduced trade deficit, signaling that the U.S. narrowed the gap between imported and exported goods, compared to the previous quarter. But that development also suggests that U.S. demand for imported goods has weakened.

In an effort to dial back inflation, the Fed has raised the benchmark interest rate by 0.75% at each of its last three meetings. Prior to this year, the Fed last matched a hike of this magnitude in 1994.

The rate increases appear to have slowed key sectors of the economy, sending mortgage rates soaring and slowing the construction of new homes.

U.S. hiring remains robust, however. Employers added 263,000 jobs in September and the unemployment rate fell slightly from 3.7% to 3.5%.

But hiring has fallen from a breakneck pace sustained earlier in the year, suggesting that the Fed’s rate hikes may have begun to cool off the labor market. By the end of 2023, central bank moves will raise the unemployment rate from its current level of 3.7% to 4.4%, the Fed predicted last month.

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US economy expected to have grown significantly, ending six months of shrinking

Anton Petrus/Getty Images

(WASHINGTON) — The U.S. economy is expected to have expanded significantly when the government releases data on Thursday, marking a dramatic reversal from the contraction experienced over the first half of the year.

The economic growth would defy Federal Reserve efforts to slow economic activity and slash consumer demand in its fight against inflation.

The data arrives less than two weeks before the midterm elections, possibly bolstering Democratic claims of economic stewardship as polls show voters prefer Republicans on the issue.

Fears of an imminent recession may quiet in response to the data, which ends the streak of two consecutive quarters of negative gross domestic product that many consider shorthand for identifying a downturn as a recession.

The National Bureau of Economic Research, or NBER, a research organization seen as the formal authority for identifying recessions, uses a more complicated definition that takes into account an array of factors. Many economists believe the U.S. has averted a recession so far this year.

U.S. GDP is expected to have grown 3.1% over the three months ending in September, according to a tracker from the Federal Reserve Bank of Atlanta. Economic activity shrank a combined 2.2% over the first six months of the year.

Still, the positive overall indicator may veil signs of a cooling economy. The economic growth is expected to stem in part from a reduced trade deficit, signaling that the U.S. narrowed the gap between imported and exported goods, compared to the previous quarter. But that development also suggests that U.S. demand for imported goods has weakened.

In an effort to dial back inflation, the Fed has raised the benchmark interest rate by 0.75% at each of its last three meetings. Prior to this year, the Fed last matched a hike of this magnitude in 1994.

The rate increases appear to have slowed key sectors of the economy, sending mortgage rates soaring and slowing the construction of new homes.

U.S. hiring remains robust, however. Employers added 263,000 jobs in September and the unemployment rate fell slightly from 3.7% to 3.5%.

But hiring has fallen from a breakneck pace sustained earlier in the year, suggesting that the Fed’s rate hikes may have begun to cool off the labor market. By the end of 2023, central bank moves will raise the unemployment rate from its current level of 3.7% to 4.4%, the Fed predicted last month.

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Sales slump at Facebook parent Meta, stock tumbles

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(NEW YORK) — Meta, the parent company of Facebook, reported a second consecutive quarter of declining sales on Wednesday, as the company contends with a widespread drop in online ad spending and rising competition from TikTok.

In addition, an Apple iOS privacy update last year, which limits the capability of advertisers to target users, has continued to weigh on ad sales at the heart of Meta’s business.

Revenue declined 4% year-over-year, the earnings report showed. That slump exceeded the 1% year-over-year decline during the previous quarter.

Shares of Meta were down more than 10% in after-hours trading immediately after the announcement.

Meanwhile, the company reported 2.93 billion daily active users on its family of apps, which includes Facebook, Instagram, WhatsApp and Messenger. That figure comprises 4% year-over-year growth, which matches the rise in daily users reported over the prior quarter.

The company’s stock price has fallen roughly 60% in 2022, more than double the decline experienced by the tech-heavy NASDAQ.

The continued revenue decline marks the latest in a series of challenges for Meta this year, including the announcement in June that Chief Operating Officer Sheryl Sandberg would depart the company as well as difficulty yielding revenue from its multi-billion-dollar investment in its metaverse project.

Meta declined to respond to a request for comment.

The company has drawn criticism from some investors lately over its large investment in its metaverse project, which has yet to deliver significant returns.

Brad Gerstner, whose fund Altimeter Capital holds hundreds of millions of dollars worth of Meta stock, sharply criticized the company’s strategy in an open letter this week.

“Meta has drifted into the land of excess – too many people, too many ideas, too little urgency,” Gerstner wrote. “This lack of focus and fitness is obscured when growth is easy but deadly when growth slows and technology changes.”

Gerstner called on the company to cut staffing costs by 20% and limit spending on its metaverse project to $5 billion per year.

“Meta needs to get its mojo back,” he wrote.

The report from Meta arrives a day after Microsoft and Google-parent Alphabet announced lackluster quarterly earnings.

Microsoft’s revenue grew at its slowest pace in five years, sending shares in the company tumbling 6%. Alphabet, meanwhile, said its advertising sales rose at its lowest rate in nearly a decade.

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Voters prefer Republicans on the economy; economists assess their plans to fix inflation

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(NEW YORK) — As the midterm elections approach, sky-high prices for essentials like gas and groceries continue to weigh on U.S. consumers. The price of eggs stands about 30% higher than it did a year ago, while the cost at the pump has spiked 11% over that same period.

In turn, polls show economic concerns remain top of mind for voters, who on this issue tend to distrust the Democratic Party, which has held the White House and Congress as inflation has spiked.

The share of likely voters who say economic issues are the most important concerns facing America stands at 44%, a jump from 36% who said so in July, according to a New York Times/Siena poll released last week. Those economy-focused voters overwhelmingly preferred Republicans, by more than a two-to-one margin, the poll said.

In a similar poll, released by NBC News last month, voters favored Republicans by nearly 20 percentage points on the issue of the economy.

While eye-popping price hikes appear a key driver behind voter preferences for Republicans, the party’s proposals for how to address the rising costs have garnered less attention.

Republican policy ideas for attacking inflation — such as a spending cut and an increase of U.S. oil output — could help reduce inflation, but face difficulty doing so in the short term, economists told ABC News. In some cases, the proposals do not differ significantly from solutions put forward by Democrats, the economists added.

The Federal Reserve, the economists said, plays a more immediate role than Congress in addressing inflation. They also noted that price hikes have pummeled countries across the world, even as they have pursued different policy measures.

Here’s what Republicans say they will do to address inflation, and how economists assess the proposals:

Slash spending

On the campaign trail, many Republican candidates have criticized President Joe Biden and Congressional Democrats for expansive spending, which Republicans say directly led to the spike in prices. Specifically, the Democrats have faced criticism for the American Rescue Plan, a $1.9 trillion economic stimulus measure signed into law by Biden in March 2021 in response to the pandemic.

While the Biden measure comprised a major spending package, former President Donald Trump backed even greater coronavirus-related spending, signing into law a package in December 2020 worth $2.3 trillion.

Pandemic-era spending likely did contribute to the current price spike, juicing demand for goods and services while the country faced a shortage of supply, economists said. A spending cut could alleviate some of the pressure on prices and help ensure that it doesn’t get worse, they added.

Democratic leaders have warned that Republican spending cuts could shrink social welfare programs like Medicare and Social Security, which Biden has vowed to preserve.

Maya MacGuineas, the president of the nonprofit Committee for a Responsible Federal Budget, said the government’s borrowing to pay for the spending increase made up the key driver of inflation.

“We’re spending so much and not paying for it — that additional money in the economy has driven inflation,” she said. “Cutting spending is a very desirable way to improve the inflation government that we’re currently in.”

While the Republican Party traditionally touts fiscal responsibility, its recent record on the issue belies that reputation, economists said.

The federal debt grew by almost $7.8 trillion over the course of the Trump administration, the third-largest increase, relative to the size of the economy, of any U.S. presidential administration, according to a calculation by Eugene Steuerle, co-founder of the Urban-Brookings Tax Policy Center, ProPublica reported.

As of last month, Biden had added $4.8 trillion to the federal debt, which outpaces the $2.5 trillion that Trump had incurred at this point in his term, according to the Committee for a Responsible Federal Budget.

Ease supply chain bottleneck

In addition to federal spending that has bolstered consumer demand, Republican candidates have targeted a supply chain bottleneck that has curtailed supply.

During the pandemic, COVID-related bottlenecks slowed delivery times and infection fears kept workers on the sidelines, leading to a shortage of goods and workers.

Commitment to America, a plan put forward by Republican House Minority Leader Kevin McCarthy, laments the “broken supply chain that has increased costs and left store shelves empty.” The plan vows to fix the supply chain issues, including a transfer of additional productive capacity to the U.S. in order to alleviate reliance on China.

The supply chain bottleneck has improved since the height of the pandemic, but remains a driver of high costs, economists said.

Efforts to ease the supply chain blockage and bring more production to the U.S. — which have drawn support from Democrats and Republicans alike — could help lower prices, though in the short term progress on the issue will depend in part on decisions made in other countries, the economists added.

Giacomo Santangelo, an economist at Fordham University, compared the supply chain bottleneck to an air bubble that blocks water from flowing through a pipe. Initially, the blockage stood close to the source of goods, effectively halting the freight ships that transport products, the port workers and truckers who deliver them, and the retail stores that sell them.

Now, that air bubble has moved closer to the mouth of the pipe, as shipping wait times have decreased and retail stores have reopened, Santangelo added.

But ongoing coronavirus-related shutdowns in China remain a key sticking point for the supply chain, spurring bipartisan calls for more production on U.S. soil, the economists said. The CHIPS and Science Act, a measure supported by members of both parties and signed by Biden in August, provides funding for domestic semiconductor manufacturing.

Additional measures pushed by a Republican Congress could help alleviate inflation in the long term, but will not address the role that supply chain bottlenecks in China have played in elevating current prices, John Horn, a professor of practice in economics at Washington University in St. Louis, told ABC News.

“Those changes take a long time to put in place,” Horn said. “To change China’s COVID policy to ramp up production in China — a Republican Congress won’t help with that.”

“A lot of these supply chain bottlenecks elsewhere in the world won’t be able to be affected by Congress,” he added.

Expand U.S. oil and gas production

A major source of frustration over inflation centers on gas prices, which crunch budgets and appear on roadside signs nationwide.

The high prices are due to a shortage of crude oil supply amid the Russian invasion of Ukraine, as well as a cut in production imposed by an alliance of oil-producing countries called OPEC+. Meanwhile, a longstanding oil supply shortage endures from a pandemic-induced production slowdown that hasn’t caught up with a bounce back in demand.

For context, the world consumed nearly 100 million barrels of oil each day in August, the most recent month on record, according to the EIA.

The U.S. is set to produce an average of 11.8 million barrels oil per day in 2022, which stands 500,000 barrels short of a record set in 2019, EIA data showed.

“We can attempt to influence gas prices, but gas prices are determined by global markets, which are affected by geopolitical changes,” Santangelo said.

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The cost to Adidas of cutting ties with Kanye West and Yeezy shoes

Jonathan Leibson/Getty Images for ADIDAS

(NEW YORK) — When Adidas announced on Tuesday that it had terminated its relationship with Ye, the rapper formerly known as Kanye West, the company put a price tag on how much the move would cost: Up to $246 million in profits this year.

Yeezy, a footwear and apparel partnership between Ye and Adidas that launched in 2015, will end its business immediately over hateful speech and actions undertaken by the rapper, Adidas said in a statement on Tuesday. The company will stop production of all Adidas Yeezy products and halt payments to Ye, the statement added.

The costs could reach in the hundreds of millions in part because Adidas could pull Yeezy products from shelves in brick-and-mortar stores and online, losing revenue from potential sales, apparel industry experts told ABC News.

Moreover, the severing of ties coincides with the holiday season, when companies carry a large amount of inventory in anticipation of busy end-of-year traffic, Bob Antoshak, a consultant and 30-year industry veteran, told ABC News.

“If they pull products from shelves, they’ll have a lot more product to write off than they would for other quarters,” he said “If it was the first quarter of next year, it wouldn’t be anywhere near that.”

Adidas faced increasing pressure to cut ties with Ye in recent weeks after the rapper made antisemitic comments on Twitter, podcasts and interviews.

Earlier this month, Ye also stoked controversy after appearing at a surprise show in Paris wearing a T-shirt bearing the phrase “White Lives Matter,” which the Anti-Defamation League has labeled as hate speech and has been promoted by white supremacist groups.

“Adidas does not tolerate antisemitism and any other sort of hate speech,” the company said in a press release. “Ye’s recent comments and actions have been unacceptable, hateful and dangerous, and they violate the company’s values of diversity and inclusion, mutual respect and fairness.”

The company declined to respond to ABC News’ request for more details about costs incurred by the business split.

Clothing retailer Gap, which also retained a partnership with Yeezy, ended that arrangement in September, the company said in a statement on Tuesday, adding that it is taking immediate steps to remove Yeezy Gap products from its stores.

“Antisemitism, racism and hate in any form are inexcusable and not tolerated in accordance with our values,” Gap said in the statement.

Last year, Yeezy was valued at between $3.2 billion and $4.7 billion by Switzerland-based investment bank UBS, Bloomberg reported.

The Yeezy line accounts for roughly $1 billion to $2 billion in annual sales for Adidas, according to Evercore ISI analyst Omar Saad.

The financial losses incurred by Adidas also owe to ongoing projects that must be scrapped, which likely include arrangements already established with manufacturers, Saheli Goswami, a professor of textiles, fashion merchandising and design at Rhode Island University, told ABC News.

“If Adidas was working with a supplier to get products developed for next season, now that existing business tie needs to be stopped,” she said. “The question becomes: Who will bear the cost?”

Despite the financial hit incurred by a potential loss of merchandise, Adidas minimized the damage to its reputation by severing ties with Ye, said Antoshak, the industry consultant.

“From the business perspective, the longer the relationship continued — and it was a toxic relationship — it would end up costing the company more,” he said.

Adidas, a German company, faced added scrutiny because of heightened concern over antisemitism in its home country, Goswami said. In Germany, individuals who make antisemitic comments online can face prosecution.

Goswami applauded the move by Adidas but said the company shouldn’t expect consumers to grant the decision similar acclaim.

“You don’t get a medal for doing the right thing but you can be harshly criticized if you don’t,” she said. “It matters to your future business relationship around how consumers perceive you.”

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