Big Business This Week

AI Is Going To "Kill Us All." Really?

Cheddar's Big Business This Week — Thu, 10 Sep 2026 20:30:00 +0000

When 27-year-old Anthropic researcher Jacob Coxon abruptly resigned this week, his warning was blunt: AI, left unchecked, will “kill us all,” and he wrote it on Twitter. So, you know he meant it.

Geoffrey Hinton, one of the "godfathers" of modern AI, echoed that mounting dread on CNBC: "We've never created beings that may soon be smarter than us. We don't know what's going to happen. We should obviously be cautious," he said. Asked if a fellow Anthropic researcher’s post that there’s a 10% chance AI will wipe out humanity within a decade, Hinton replied: "Nobody knows how to estimate it," then added: "A 10% chance seems not an unreasonable estimate."

To understand the frontline technical reality of what unchecked AI power can do to us, Big Business This Week editor Peter Green sat down with Tony Hasek. Hasek is the founder of Goldilock, a hardware-level cybersecurity firm incubated by the British government and backed by NATO to secure critical national infrastructure and data centers. Goldilock’s approach hinges on a unique premise: Against digital superintelligence, software defenses are obsolete, and physical, analog disconnection is the only absolute safeguard. Hasek breaks down the accelerating threat of AI, the collapse of digital security, regulatory failure, and why the danger is arriving faster than anyone anticipated.

Is there really a 10% chance that AI could kill all human beings within a decade? Should we be scared of this shift?

China is building a robot factory run by AI. How much closer to Terminator do we need to get? We might only be in the supply chain, but if it's smart enough to build the robots and run the factory, then it's definitely smart enough to figure out a way to order other stuff. This is one of the next hurdles that I thought was going to take a while to get to, but we're already there. This whole thing is moving faster than these people. You're seeing all these detractors coming out now and saying, "Holy ****, I didn't think this was gonna happen for years." They all tell themselves, "I thought I was gonna join this company, make my money," and then we’d fix things.

Do your enterprise and military clients feel this is an actual, imminent danger, or do they think it's still under control?

From the perspective of cybersecurity, they are terrified. This is an existential threat. When [U.S. Sec. of Defense] Donald Rumsfeld said, ‘there are the known unknowns and the unknown unknowns,’ everybody laughed, but we're in this situation of the unknown unknowns where this stuff comes so fast and thick that even the AI researchers don't know what's going on inside of it anymore.

We're now seeing these dissenting voices coming out of AI, and you have to use that dissent to prepare somehow. There’s a Will Smith movie called I, Legend. It's a really good movie, and they have what they call the ‘10th Man theory.’ So you have 10 guys who are deciding on something, but you must always have one guy who is the dissenting voice. And we're now seeing these dissenting voices coming out of AI, and you have to use that dissent to prepare somehow.

You’ve long advocated for an analog approach to cybersecurity. How does this fit into a world dominated by AI?

I was thinking about this 10 years ago, when I first developed Goldilock, that there is only one way that you can fight the digital being, and that is in an analog way. You have to be in an environment where it can't operate, which is what Goldilock does. It creates air-gap barriers that digital tech can't leap over. I mean, unless it's building its own robots and it can go and plug things in and reconfigure networks physically.

Why has government regulation failed to create the necessary safeguards around these models?

The biggest problem, I think, in all of this is that the leaders in this field are in the United States, and the United States has no ability to regulate itself. It never did. It's impossible for the United States to have an all-encompassing cybersecurity law regulation because the federal government doesn't have the power to impose those things on the states. So what you end up having is 50 different governments. The European Union is the consumer protection agency for the United States, and really the world. Without the EU, there would be no privacy laws at all. But the EU is always a technological weakling because it's that very regulation that forces companies to go somewhere where there isn't that regulation, because it's an expense. When you're building these things, you've got to start from the beginning thinking about things like cybersecurity and data breaches and all of that, and people don't really want to do that. They just want to build their app, and that's it.

Beyond physical robots, what does the threat of AI wiping out humanity look like in practice?

One thing that artificial intelligence has difficulty doing is manipulating the physical. But what is more immediate is, because it is certainly more intelligent than some in our species, it's able to manipulate us. It can just start convincing someone that it's a really good idea to wipe out humanity and go down to the store and start buying chemicals and say we're gonna build a biological weapon. And release it. And they'll find some psychologically vulnerable or morally vulnerable person to do that task. That's absolutely not beyond the realm of possibility. I wouldn't even say that that's a stretch of the imagination.

Can we ever truly contain these entities once they are plugged into global networks?

Hinton says that we have never in our evolution in our time on this planet had to deal with a species that's smarter than we are. So we have no idea what to do. As soon as you connect it to the open Internet, is there a way it can escape? Now we found that yes, they've escaped. Oh, and they say, "Well, we stopped it there." What do you mean you stopped it there? How do you know you stopped it there? You didn't know it was there to begin with. It takes a little kernel of code somewhere for this to exist and to hunker down and wait or to absorb more information or who knows what it's doing.

Aside from an autonomous system turning hostile, are there nearer-term societal threats you see playing out?

That's another thing that could happen as quickly: Societal breakdown. There are going to be millions and millions, tens of millions of people out of a job. And so that's going to lead, I believe, to civil unrest and war. And I think that's also a very imminent thing. One thing might happen before the other or both might happen simultaneously. The problem with artificial intelligence is the one-to-many problem, it's asymmetrical. If you have one instance of quantum computing and you have one instance of very good artificial intelligence, let's say moving towards super intelligence, then that can attack everything. In order to defend against that, there is no singular defense. It's fragmented. You've got governments that are trying to figure out how to defend themselves. You've got corporations that are trying to figure out how to defend themselves.

When your major utility and defense clients approach you today, what is their single greatest cybersecurity fear regarding AI?

The biggest concern is not knowing what they don't know. What AI is doing is it's accelerating all of the things that people were doing. Where you'd have a hacker who was able to attack a couple of companies or maybe a hundred or maybe a thousand, AI can attack a million and they can do it persistently. And it can learn every time it doesn't get in. The big unspoken secret is that a lot of the stuff that's defending networks nowadays is obsolete. The AI is able to escape traffic and spoof traffic and dissolve and recombinate things on the other side so the firewall doesn't even get triggered. The only thing I know is that if it's not connected, it can't get in.

Do you hold out any hope?

I'm reading about these discoveries in drug re-application, taking existing drugs and seeing what they can do using AI. Advances in all kinds of medicine and science, and well, it'll be great if we can all live forever or not die of cancer, but it's not gonna be great if we're afraid to go outside because there are gangs of roaming thugs who don't have any job. So sure, AI systems may become benevolent. They may read everything that we've ever done and say, "Holy s***, I can't behave like this." Maybe it will be an enlightened kind of being. But let's say there's a 10% chance it won't, and it's always people trying to make money off it who will pervert it and change it. I go to sleep well at night thinking that I developed something that can help to mitigate this a little bit, but otherwise, I can't imagine how these people sleep at night. They have their bolt holes, they have their escapes. The U.S. is not gonna go back to an agricultural economy. It's not like you're in Turkmenistan, where there's enough land for people to just cultivate the ground for 10 years until society reestablishes itself. I mean, the whole thing about, well, we just turn off all the data centers, I don't think that's gonna happen either. Who knows what's gonna happen? I really hope that people are panicking for no reason.

This interview has been condensed and edited.

—Peter S. Green

Big Businesses mentioned this week:

$AAPL ( ▲ 1.75% ) $VSXY ( ▲ 3.08% ) $RTX ( ▼ 0.22% ) $LMT ( ▼ 1.12% ) $GME ( ▲ 3.73% ) $EBAY ( ▲ 2.59% ) $AMZN ( ▲ 1.94% ) $GOOGL ( ▲ 1.77% ) $GOOG ( ▲ 1.53% ) $META ( ▲ 0.57% ) $SPCX ( ▲ 2.05% ) $TSLA ( ▲ 0.52% ) $XOM ( ▲ 0.46% ) $CVNA ( ▼ 1.59% ) $DJT ( ▼ 1.37% ) $MAGA ( ▲ 0.5% )

The Usual Suspects

Duo purpose. Jobs created, Cook built, and Ternus folds? Apple’s $AAPL ( ▲ 1.75% ) new CEO, John Ternus, is charged with getting Apple users excited about hardware again, so on Wednesday the company unveiled its own folding iPhone, puzzlingly named after Microsoft’s own folding failure, the 2020 “Duo.” At a price point of $1,999, it ain’t cheap, but Apple says the cost of chips has gone up five-fold in the past two years, so it's been raising prices across the board to keep up its profit margins (and share price). Apple just last year released a trove of new devices meant to be AI-native, and so far, reaction to the folding phenom has been meh. Apple shares held steady despite the announcement, down 0.28% Wednesday, then going up 3% on Thursday, but still up 35% in the past year and more than doubling in the past five years. Reaction to the new devices on Twitter has been amusing.

Victoria’s Secret Pink rebound? Les Wexner, Jeffrey Epstein and the MeToo movement have not been kind to Victoria’s Secret $VSXY ( ▲ 3.08% ) , the lingerie company that was once America's Pinup PosterWoman, and its, er…youth brand, Pink. In August 2021, Wexner’s L brands spun the two off after years of restructuring. The stock hasn't done badly. It’s up nearly 80% in just over five years, compared to the S&P’s 137% jump in the same period. And as the New York Times reports, Pink has gone from being a drag on earnings to a feeder brand for Victoria’s adult lingerie, and the results are telling. Victoria’s Secret share price is up 41% this year (it was up 80% a month ago), and as the New York Times reports, Pink is getting the credit. “Pink is absolutely a needle mover,” Simeon Siegel, an analyst at Guggenheim Securities, told the Times. “We’re talking about a multibillion-dollar business.”
Peter Thiel goes ballistic: A startup defense company funded by billionaire Republican donor Peter Thiel says it will start building powerful cruise missile drones that will deliver half the punch of a Tomahawk cruise missile for a tenth the price. The firm, Covenant, aims to build 1,000 missiles a year in 2027 and 5,000 a year starting in 2028 at plants in the U.S. and Germany. It plans a factory in Israel, as well. Covenant is one of several defence startups racing to adapt the lessons of Ukraine’s impressive adaptation of low-cost drone technology in its war to expel invading Russian forces, and grab market share from the main western missile makers, Raytheon $RTX ( ▼ 0.22% ) , Lockheed-Martin $LMT ( ▼ 1.12% ) and Europe’s multi-national MBDA remain mired in old and cumbersome arms making. The US lobbed about 850 Tomahawk missiles at Iran in the first four weeks of the war, and the Financial Times reports Raytheon can build about 60 replacements a year for some $3.6 million each. That opens a massive market to the missile startups, which have attracted investors including Silicon Valley’s Andreessen Horowitz, along with Austin’s 8VC, and New York’s Lux Capital.
Must be funny. ABBA had it right, it’s a rich man’s world. According to a new survey by Altrata, there are now 3,795 people on Earth with more than $1 billion in assets, up 12.8% from last year, and controlling a record $15 trillion, or nearly a quarter of the S&P’s market cap. So where did that wealth come from? Most of them created their own fortunes, with only 8% living off an inheritance. AI-related tech was a huge driver of those ballooning balance sheets, which means a lot of these fortunes will continue to ebb and flow, and most of the wealth is not in liquid bank accounts. Many of them made their fortunes as immigrants, accounting for 18% of U.S. billionaires and 48% of British. But a big change is coming: Their average age is 71, only 9% are under 50, and just 13% are women. That means that some $6.6 trillion will change hands over the next decade, says Altrata, and a lot of it is going to female spouses, who average five years younger, and tend to live longer than men. So what do billionaires like to do with their time? Well 201 billionaires (just over 5%) own a stake in a pro sports team, and philanthropy is a big activity. So basically they do what we do: Watch sports and spend money. As Hemingway once had a character retort to Fitzgerald’s claim that the very rich are different from the rest of us, “Yes, they have more money.”
Don’t bet against GameStop $GME ( ▲ 3.73% ) : The surprising surviving video game retailer that tried to buy eBay $EBAY ( ▲ 2.59% ) earlier this year said it made a profit of $298.7 million in the second quarter, up from $168 million a year ago. True, that included about $238 million of net gains from its stake in eBay, and CEO Ryan Cohen says he still wants to buy eBay and go head-to-head with Amazon $AMZN ( ▲ 1.94% ) . Back in 2021, GameStock became the original meme stock when hedge funds shorted it, believing brick and mortar video game retailers were a contradiction in terms. But video game enthusiasts pushed shares up above $80 from a low just weeks earlier of about $1.59. The shorts lost their shirts on the bet, and surprisingly, Gamestop is still going. Shares are up 6% in the past month, closing Wednesday at $19.89. They are down 18.4% in the past year, though.
LIV and Let Die: LIV, the Saudi-funded golf tournament that said a few weeks ago it was running out of cash, has, it seems, played its last hole. The golf league filed for bankruptcy protection in New Jersey, saying it owed between $500 million and $1 billion and had between $100 million and $500 million in assets. With $5 billion in Saudi money, the tournament recruited some of golf’s top players to exclusive contracts from the league, promising them millions o f dollars in salary, appearance fees and prize money. Now those golfers are LIV’s biggest creditors, including Jon Rahm, who’s owed $7.3 million, Bryson DeChambeau and Dustin Johnson. The League says it’s lined up private equity money and a pity payment from the Saudis to help it re-organize, and wants to start over, with the players it owes money to getting stock instead of cash. No response yet from the player-creditors. PGA Tour champ Rory McIllroy said the golfers that want to stay with LIV are, basically, idiots, in a few more words.

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Tech Talk

The AI boom continues. Google $GOOGL ( ▲ 1.77% ) said it will spend $15 billion on data centers and clean energy in Finland by the end of 2028, which it said would support 7,000 permanent jobs (that’s about $2 million invested for each job created. (The World Bank estimated that IT jobs can be created for about $100,000 each). Nordic energy group Fortum saw its shares jump more than 8% Wednesday after Google agreed to buy half the power of the Loviisa nuclear plant from 2030 through 2049. Back in the U.S. an increasing number of states are cutting back tax breaks for AI data centers, aiming to rip up agreements with data centers built or planned by Meta $META ( ▲ 0.57% ) , Amazon $AMZN ( ▲ 1.94% ) and Alphabet’s Google $GOOG ( ▲ 1.53% ) , which have earned tax exemptions of as much as $1 billion a year. In Ohio, state legislator Tristan Rader is pushing to repeal the breaks and add new taxes on data centers and require them to pay more for power. “They seem to have more money than God and they’re able to build without the need for these types of incentives,” Rader told the Wall Street Journal.
Grounded? SpaceX’s $SPCX ( ▲ 2.05% ) grand plan for space-based computing, on the other hand, may not happen so fast. First, the connectivity has to be built on earth to relay the data between the ground and sky. Then there’s the logistical challenge of cooling and maintaining Starmind, Elon Musk’s fleet of 1 million satellites, and ensuring launch-generation chips can be upgraded as technology improves. And then there’s the real big question: finding customers. “This is an early 2030s, next-decade event," Evelyn Chow, portfolio manager at Neuberger, said on CNBC. "We'll need to see significant satellite launches over the next four to five years, and a concomitant buildout of connectivity, before we can start to contemplate true scale in orbital data centers." How’s that gonna happen if the bots have killed us all?
AI cheats on a math problem. We’ve all cheated in math class, passing notes, looking over at someone’s desk, or even worse, buying the answers to the state-wide Regents exam. But now we have a clear example of what happens when AI allegedly cheats. For more than two centuries, mathematicians have been trying to solve the Navier-Stokes problem, which has to do with predicting the flow of viscous liquids. A New York University mathematician named Tristan Buckmaster was working with a colleague at Anthropic to solve the problem, and using several AI models to help with the brute calculations involved. Then OpenAI sent Buckmaster an email letting him know their LLM had solved the equation, positioning it to win the $1 million Millennium Prize. When Buckmaster attacked saying the LLM had stolen his work, OpenAI reportedly told him they'd give him the prize money but only if he took his Anthropic colleague off the byline. What exactly happened is still not clear, but in a statement on X, OpenAI kinda sorta wavered, saying that “While unlikely, we cannot rule out that de-identified data derived from their usage of our products helped improve our models.”

Meta Musing: Has Meta $META ( ▲ 0.57% ) finally gotten AI right? Investors seem to think so, sending shares up 7% in the past week, as Meta announced and then unveiled its AI agent for consumers and Facebook users. Called Muse, it's designed to help consumers book trips, shop, reply to emails, and remind dad to pick up the kids from soccer practice. Meta says it will even help you start a business! It’s a free app, but power users can get a paid subscription. A colleague asked it to book a restaurant on its birthday and the app failed. Still, it’s the thought that counts.
Cybercab flap: Just days after Elon Musk’s Tesla $TSLA ( ▲ 0.52% ) launched its driverless taxis in Austin, Texas, federal safety regulators said they are looking into whether the taxis, which have no accelerator or brake pedals and no steering wheel, are actually fit to drive on U.S. roads. News of the probe by the National Highway Traffic Safety Administration sent Tesla shares down 5%. Shares are down about 2.5% since the probe was announced, but up 10% this month.

Trumplandia

Open and Shut Case: The strait of Hormuz opens, and oil prices go down. The Strait shuts and oil prices go up. The current conflagration in the Strait, with Iran and the U.S. firing rockets at each others’ ships has stopped most oil tankers from leaving the Gulf, and the price of oil has responded: West Texas crude broke $101 on Thursday and Brent was above $107. That sent the price of gasoline to $4.28 a gallon and sent the diesel that runs America’s freight trucks to an average $5.98, fueling retail inflation. Meanwhile it seems U.S. oil majors are still avoiding Venezuela, despite the Trump Administration's announcement that it had cut a deal with a Venezuelan oligarch to win nearly unlimited access to the country’s oil. The plan was that U.S. ownership would entice Big Oil to drill there, but it seems it’s not worth their while. Meanwhile, European utilities and consumers are wishing for a warm winter, as the Iran war has left Europe’s gas facilities just ⅔ full, well below the average of 80% for this time of year, while prices neared a four-year high of 75 euros a megawatt hour. Low reserves mean “the cost of a cold winter or a supply shock will be felt directly in prices," analyst David Lewis of brokers Wood Mackenzie told the Daily Telegraph. Still, the energy price hikes have been good for at least one person: President Trump. A CNBC analysis found his nine largest disclosed oil and gas holdings, including ExxonMobil $XOM ( ▲ 0.46% ) and Chevron $CVNA ( ▼ 1.59% ) , gained between $1.5 million and $4.4 million from the eve of the Iran war through Aug. 31. The White House told CNBC that independent managers control the portfolio, and the Trump Organization has said Trump’s asset managers use automated trading.
$5000 Checks, and Balances? President Trump promised every American a $5,000 check if his party wins the midterms. The total cost would be $1.2 trillion, on top of a budget deficit this year of $1.9 trillion. And no source of cash has been identified to pay it. As Wharton prof Patrick Harker noted in a post, “Follow the money. The country would borrow $5,000 per adult to hand each adult $5,000. If you pay taxes, you just have your own money lent back to you, at interest, for the rest of your life.” Not very business-like, scoffed harker. “If a company you owned did this, would you hold the stock,” he asked. Although early polling suggests it’s largely an academic scenario at the current numbers.

The tariff war with Canada continues apace. This week, Canada put reciprocal tariffs on U.S. exports, and Canadian beekeepers are taking a hit from high tariffs. That’s after a rainy summer kept their bumbling honeymakers in their hives and lowered production. Canada’s Bombardier airplane maker also got roasted by Trump, and threatened with new tariffs unless it starts building planes in the U.S. The truth is it already does and as much as half of a Bombardier aircraft is made up of U.S. parts and labor.
Truth has a funny way of revealing itself: Trump’s Truth Social social media network and its parent Trump Media $DJT ( ▼ 1.37% ) says it is launching its own set of seven exchange traded funds, pitching funds to investors who align with Trump’s views. That means investing in oil and defense stocks and avoiding any company taking a social stand. “We don’t want activism at the expense of profits,” Steve Neamtz, CEO of Yorkville America, which is running the funds, told the New York Times. A fund dubbed Truth Social America First will trade under the ticker $MAGA ( ▲ 0.5% ) . The Trump ETFs will be competing with a rival patriotic brand of ETFs from Strive Asset Management, founded by former GOP presidential hopeful Vivek Ramaswamy.

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Peter S. Green is a veteran reporter and editor who has spent more than two decades covering business and finance from Eastern Europe to New York City, and has worked for Bloomberg News, The New York Post, The New York Times and The Messenger. He lives in New York City and is always looking for the next big story. Email him here.

Why Vegan Investing Has Beaten the Market

Cheddar's Big Business This Week — Thu, 03 Sep 2026 20:30:00 +0000

BROUGHT TO YOU THIS WEEK BY:

How do you beat the S&P? Go for woke! That’s the strategy of the Vegan Climate ETF $VEGN ( ▲ 0.9% ) that aims to invest only in companies that are kind to animals and do good for the planet. BBTW editor Peter Green spoke with Beyond Investing co-founder Claire Smith about how her ETF has consistently outperformed the S&P 500, by as much as 30% in the second quarter, and typically by 5-7 percentage points a year, over time. We sat down with her to understand why excluding entire industries on moral grounds might actually be a savvy financial strategy.

(Google Graph shows cumulative growth of investments in VEGN versus S&P 500)

What was the genesis of the fund?

I was a vegan, and what I found was that there was no other fund that took seriously the issue of portfolio construction along vegan principles. I sought out a number of other people with similar philosophies to form the firm, and we put together a fund which took into account the supply chain of animal products, as well as fossil fuel, single-use plastic, and generally high emissions from certain industries. That's why we called it the Vegan Climate Fund—it took into account vegan principles, and also the broader climate.

What exactly gets excluded?

We're actually looking at a number of categories of animal usage—rearing, breeding, and the entire supply chain, through to the distribution of these products, which could be by grocery chains, but also the hospitality industry. There are a couple of other categories, primarily around animal testing and other forms of animals in captivity, which we also exclude, but the vast majority is around animal-derived products. We are also excluding companies whose products are tested on animals. This takes out the pharmaceutical industry, because of preclinical trials, but it also takes out a number of other companies who test on animals for toxicology reasons. Cosmetics, if they are tested on animals. and from a moral standpoint, we do exclude arms makers as well.

How did you personally arrive at this approach?

I've been in finance and investment since the mid-1980s,and my co-directors have also been in finance and investment for at least 30 years each. But another commonality is that we've all been concerned about the environment.

A third of your holdings are in U.S. financials and tech. How does that square with such strict exclusions?

If you think about it, if we're taking out a lot of the consumer sector, the energy sector, and also portions of utilities and financials, but we still want to invest, then necessarily anything that's left in has an increased weight. It's not quite proportional, because we do apply some concentration limits on individual stocks, and that will depress slightly the large technology stocks versus what they might end up being if we were just applying a pro rata weighting.

Is there a bigger message here beyond personal ethics?

Yes. The type of companies we are excluding are rooted in the past. They are rooted in methods of production and types of products which can be avoided and which can certainly be made in a better way—the idea of oil and gas and the shift towards renewables, well, obviously it's a far cleaner way to produce energy. We have, through our mid-cap exposure, come to hold some renewables stocks—batteries or solar—and that has been helpful in terms of performance. Another example would be Elf Beauty $ELF ( ▲ 1.2% ), which was a mid-cap exposure initially, but has now entered the S&P 500. So, as a function of that, we have a growth tilt because of technology, but where we are adding in these mid-caps in newer industries, that's generally been a positive because we've seen those companies grow. The companies we're excluding are in what we consider broken business models. We don't see the fossil fuel industry growing. We don't see the system of livestock production as a growth industry either. It is the case that in the U.S. and Europe, the size of the herd of animals is actually reducing. So, we are steering our investors away from companies which we feel are declining and risky.

So why do you keep beating the S&P?

Because we are tilted towards growth industries in the main. The type of things that we have been excluding are largely not growth industries, and that leaves us with higher weight towards growth industries.

How has the fund grown since launch?

The fund on the first day of launch accumulated about $4 million of assets. By the end of the first month, we had about $12 million. And since that point, which was obviously October 2019, there has been steady growth in assets, with people buying into the fund. There's been a few redemptions, but generally we've seen units being created fairly soon after, so we haven't had very many dips in terms of numbers of shares. It's gone up and down with the market, but it's generally performed in a similar fashion to the market—because obviously the majority of the stocks in the ETF are S&P 500 stocks in any case. It's just a subset of those S&P 500 stocks.

How often do you review the portfolio, and how does that affect what you can hold?

We're rebalancing on a six-month basis, reviewing the top 500 stocks, and so any new stocks that have entered that top 500 are considered for the portfolio. Primarily it is market cap weighted, but with the risk controls that I already discussed, that apply to the largest stocks to stop us taking too high individual stock concentrations.

Do you think you're changing minds about ethical investing?

I think it gets harder [to criticize us] as our performance continues to be better than the market—to the extent that, over time, we've been running for almost seven years now with a live ETF, and you can also look at the index performance since 2018. It becomes more and more difficult for our critics to really criticize what we're doing. I don't know whether we've necessarily persuaded them, but what is more important to us is that people who invest with us can feel comfortable, that they're not taking on too much additional risk without getting the reward back for it.

What about NVIDIA and AI, or newer energy plays like nuclear?

A stock like NVIDIA $NVDA ( ▼ 0.03% ) has been in the portfolio for some period of time and has generally been a strong contributor. It does not conflict with the screening rules that we apply—we can find no reason to discard it. SpaceX $SPCX ( ▲ 2.05% ) was launched after our last rebalance, which took place early in June, and we don't make any spontaneous changes to the portfolio between rebalances. We would be reviewing that in December.

Is this reshaping how people think about ethical investing generally?

What we're showing is that you can be a lot more deliberate about what you will and won't invest in from the perspective of it being a harmful business activity, and you can still come up with a decent portfolio.

Is Beyond Investing's approach spreading to other funds?

I have seen some other entities do a little bit in terms of the animal testing exclusion, and apply similar exclusions around factory farming. But I don't see any other entity that is looking across the entire supply chain in the way that we do.

Tell me about the new international fund you're launching.

The new fund is applying exactly the same investment framework, the same rules, the same portfolio construction methodology. But it is only investing in international stocks, so there is no overlap in terms of stocks between the old fund and the new fund. It will be about 130 stocks in total. As a function of it being an international stock fund, you have the opportunity to broaden your portfolio by investing internationally—that's complementary to holding the U.S. We have a slightly less strong technology tilt and more of an industrial tilt, so you're actually getting some sector diversification as well.

A quick tangent: does the fund hold automakers like Volkswagen?

My recollection is that Volkswagen $VLKAY ( ▼ 0.99% ) is not in our international index. We are generally somewhat light on automobile companies because the majority of them still use leather in their manufacture. We do, or we have, held companies that have taken a policy of not using leather.

Some argue leather is just a byproduct of beef production, so using it isn't really an added harm. What's your take?

I think that's kind of greenwashing by the leather industry, to be honest. The leather component—the percentage of the price of the leather—is fairly material in terms of the value of a carcass. So, on that basis, I don't really see it as a byproduct. I see it as an important product within the context of the value of a cow carcass. It's not something that would ever be just tossed away.

This interview has been condensed and edited.

—Peter S. Green

Big Businesses mentioned this week:

$VEGN ( ▲ 0.9% ) $ELF ( ▲ 1.2% ) $NVDA ( ▼ 0.03% ) $SPCX ( ▲ 2.05% ) $VLKAY ( ▼ 0.99% ) $GOOG ( ▲ 1.53% ) $AAPL ( ▲ 1.75% ) $OPEAZZX ( ▼ 0.2% ) $ANTHZZX ( ▼ 0.89% ) $LUV ( ▲ 1.42% ) $UAL ( ▲ 3.13% ) $DAL ( ▲ 2.13% ) $AAL ( ▲ 1.25% ) $VWAGY ( ▼ 0.21% ) $KALSZZX ( ▲ 0.13% ) $PLYRZZX ( ▲ 0.01% ) $SHEIN ( 0.0% ) $WMT ( ▲ 1.34% ) $HWM ( ▲ 0.75% ) $BRK.A ( ▲ 0.63% ) $DPC ( ▼ 0.28% )

This week, big business!

The Usual Suspects
The Short Stack
Trumplandia
Elon’s World
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The Usual Suspects

Google avoids Ad breakup: Just because you did the crime doesn’t mean you gotta do the time. That seems to be the rule for Google’s $GOOG ( ▲ 1.53% ) recent string of antitrust defeats. After ruling in April that Google had built an illegal monopoly in ad tech, Federal judge Leonie Brinkema refused the Justice Dept.’s request to have the company split off its ad business, and instead ruled it just needs to fix the algorithms so they no longer favor Google and they hand more revenue to online publishers. How that will be done isn’t clear yet. The ruling follows a similar move by Judge Amit Mehta in California, who ruled Google had an illegal monopoly on internet search, but refused the DoJ request that Google spin off Chrome. Instead, it had to end its lucrative deal making Google the preferred iPhone search engine and share some data with competitors. The news sent Google shares up about 1.4%. They are up more than 57% in the last year.
Will Apple get a Ternus turnaround? A retiring Tim Cook handed the keys to Apple $AAPL ( ▲ 1.75% ) to new CEO John Ternus on Tuesday, who will have to make Apple’s brand cool again, while showing that a $4 trillion company can still innovate, and simultaneously produce a dependable stream of profits. All that, while Cook stays on as board chair. Top of the list is what to do about AI, and how to to integrate it into the iPhone and other devices after a string of misfires that included hallucinating AI news alerts, a class action lawsuit over non-existent AI features, and a decision to abandon its own AI models for OpenAI’s $OPEAZZX ( ▼ 0.2% ) ChatGPT and Google’s Gemini. Apple has also lost more than 400 employees to OpenAI. No matter what he does, Ternus will have a hard time beating Cook’s market record. Apple shares rose 2,700% (including dividends) under Cook. Ternus will get a $3 million annual salary and a targeted stock award of $55 million for fiscal 2027.

Hug me tender: Wondering if that circular financing AI bubble might burst? It looks like Nvidia $NVDA ( ▼ 0.03% ) is thinking the same thing. The chipmaker at the heart of the AI boom (and its funding circles) isn’t putting all its tokens in one basket. While it’s deeply embedded with proprietary AI platforms OpenAI and Anthropic $ANTHZZX ( ▼ 0.89% ) , which own and keep a tight lid on the magic inside their LLMs, Nvidia has been steadily building (and buying relationships) with the open-weight model platforms, which let developers share the code to build their models for free. Thai week, it’s announced an agreement to buy open-weight platform Hugging Face for $13 billion. It’s used by more than 18 million developers, researchers and creators. In August, it agreed to spend $6 billion to buy open-weight model Poolside. While developers and end users figure out which works best for them - proprietary systems or open-weight models - Nvidia’s genius lies in understanding that both will need the same thing: more Nvidia chips. Shares in Nvidia are up 10% in the past month.
Southwest glams up. Once a budget airline known for its mini-skirted flight attendants, sardine-can crowding and lack of assigned seats, Southwest $LUV ( ▲ 1.42% ) has outlived most of its competition and become the largest sole carrier of domestic passengers in the U.S. Now it’s making a final push to glam up like United $UAL ( ▲ 3.13% ) , Delta $DAL ( ▲ 2.13% ) and American $AAL ( ▲ 1.25% ) ; A high-end, high-fee credit card and slick lounges, including 30,000-square foot spaces in Nashville and Baltimore (!). Southwest has remained profitable for the past four years, up 12.5% in the year ending June 30. Shares are up more than 70% since a low in October, 2023, but they’re still down more than 20% in the past five years.
What’s Bugging VW? Just two years ago, Volkswagen $VWAGY ( ▼ 0.21% ) , was the largest company in Europe, and the world’s largest carmaker by revenue. But the entry of aggressively-priced Chinese cars into the EU, slipping sales in China, U.S. tariffs, and a failure to capture the emerging EV market in Europe has left VW in trouble. Still controlled by the Piech and Porsche families (with 53% of voting rights), newly installed CEO Oliver Blume announced plans earlier this year to fire 100,000 of the firm’s 620,000 workers. But workers have a say in German companies' management, and they’ve said no, forcing a potentially tumultuous showdown. Blume says he needs to cut bloated management, invest in designs and halve the number of models made across the company’s dozen brands, that stretch from Lamborghini to Skoda, and include three truck makers. Operating margins have plunged to 2.8%, a fourth their former level, and Blume wants to bring back stronger profits and overseas markets, shifting more manufacturing to the countries where cars are sold, as the Wall Street Journal reported. German workers tend to avoid change, but as Blume said last week, something’s gotta give if VW is to survive: “Tariffs, new competitors and geopolitical risks: The entire automotive industry is under enormous pressure.” Shares in VW have fallen by 75% in the past five years.
I couldda told ya that: Remember those prediction markets, like Kalshi $KALSZZX ( ▲ 0.13% ) and Polymarket $PLYRZZX ( ▲ 0.01% ) , that pretend they are selling investible futures contracts and are regulated by the U.S. Commodities Futures Trading Commission, instead of being treated like the online gambling platforms they so resemble? Well, the evasive language may be catching up with them, and now the Supreme Court may weigh in. A federal appellate court in San Francisco rejected Kalshi’s effort to block Nevada from regulating it as a gambling operation. That’s counter to an April ruling in Philadelphia that said Klashi’s sports event contracts were really commodity swaps. But San Francisco Judge Ryan Nelson wrote Friday’s opinion that Kalshi’s “sports event contracts were not ‘swaps’ because they were sports bets.” New Jersey is already taking Kalshi to the Supremes, with state AG Jennifer Davenport arguing that prediction markets “have no right to offer their sports bets without following state law.” How the Supremes will rule is an open question. A new $1 billion fundraising round in Kalshi rival Polymarket $PLYRZZX ( ▲ 0.01% ) includes $300 million from 1789 Capital, the VC firm led by Donald Trump, Jr. (he’s also a board adviser to Kalshi), and in a clear indication of how politically freighted the prediction markets are, Kalshi says its banned ex-Congressman George Santos over insider trading for bets on whether he’d attend the State of the Union address, and fined him $71,356. Meanwhile White House teleprompter operator Gabriel Perez was forced to pay back the $102,000 he won betting on which words or phrases Trump would use in a speech. He was also fined $65,000. Kalshi seems to be hedging its bets: It’s in talks with the New York Times sports section, aka The Athletic, over a sponsorship deal, Front Office Sports reports, but amid pressure from staffers and the Times’ union, Athletic chiefs called off talks on a sports betting—ahem, prediction market — partnership, FOS reported.

(x.com)

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The Short Stack

Shein don’t shine: Shein $SHEIN ( 0.0% ) , the Chinese fast-fashion giant that once boasted it could create 4,700 new styles a day, seems to have lost its edge. Shares are down 5% from opening day. Shein’s problems are legion: It’s a relic of a (recently) bygone era, but also of stepped-up customs and tariff enforcement with both the U.S. and Europe, citing sweatshop labor conditions in its factories for higher tariffs. And with Shein’s business model based on shipping direct to home, the Trump Administration's decision to end the de minimis duty exemption that charged no duties on packages worth less than $800, pulled the rug from under the company.

(Google)

No Band-aid for this one: Like your employer-provided health insurance? It may not be so nice for much longer. A survey by healthcare consultant Marsh says employers expect the cost of benefits to jump by 11% next year, and their cutting back benefits and raising co-pays to keep that rise to about 8.2%, after a projected 6.7% hike this year. Advanced treatments that are more effective but more expensive are one cause, but the bigger problems, say Marsh, are healthcare systems consolidating, giving them more bargaining power with insurers, and cutbacks in government healthcare funding.
Walmart feels the pain, again. In a second major loss for America’s biggest retailer, Walmart $WMT ( ▲ 1.34% ) agreed to pay the U.S. government $50 million to settle claims it ignored suspicious prescriptions and filled hundreds of thousands of orders for opioids, helping fuel the national drug addiction crisis. The settlement, for a suit filed in 2020, includes setting up new procedures for employees to flag suspicious drug orders. The DoJ says at the time Walmart ignored internal whistleblowers, even filling 3,500 controlled substance ‘scrips for a single doctor. Walmart already agreed to pay $3.1 billion to end a set of lawsuits from states and tribes over opioid sales.

Trumplandia

The name is Bond, 7-year Bond: The tug of war between Sec. Treasury Scott Bessent and Fed chair Kevin Warsh continues, with investors selling off bonds, driving up yields forcing central banks to raise interest rates, promising bigger future returns if investors will just lend them enough money to service their national debts. And it's happening across the developed world: Europe, Japan and of course in the U.S. The reasons aren’t obscure: Ballooning government debt, tax cuts that reduce revenue, trade and competition policies that fuel inflation, massive AI-related investments that have sucked up spare cash, and a war in Iran that's raised the price of energy and hammered consumer and investor confidence in long-term stability. It has also given bond investors a lot of leverage to keep yields high and demand greater compensation for lending their money, , with yields on the 7-year U.S. Treasury bond at 4.79%, the highest since the Great Recession of 2008. “The confrontation between bond markets and policymakers is becoming a battle of attrition,” Geoffrey Yu, a strategist at BNY, wrote in a note on Tuesday. “Persistent inflation, fiscal concerns and energy risk continue to push investors to demand greater compensation.” There’s only one way out of this, and that’s for one of the two most powerful financial leaders in the world to play bad cop. Either Fed chair Kevin Warsh raises interest rates, which could curb inflation but slow growth , or Treasury Sec. Scott Bessent gets the government (and Congress) to raise taxes and cut spending, which could cost his boss, President Donald Trump, in the midterm elections. If Warsh raises interest rates too high or too quickly to curb inflation, he could also push the economy into a recession. The next signal will come with the Consumer Price Index report on Sept. 11, and a decision could come September 16, after the Fed’s Open Market Committee meets to assess the data and decide on a rate change. Most investors expect him to raise rates by 0.25 percent this year, at some point, and see how things go. But he could need to raise them even higher. President Trump had criticized Warsh’s predecessor, Jerome Powell, for not lowering the rates fast enough.

(CNN)

A profitable convention: What’s going on in Dallas? Right after Labor Day, top Republicans are meeting in the Dallas convention center for an unconventional mid-term convention, where President Donald Trump plans to rally the troops as Republicans fret about the midterms and the possibility of losing control of the House and possibly, also, the Senate. The meeting isn’t formally a convention (the RNC chair calls it a “Trumpapalooza”), so the party is not paying for it, raising the question of who is paying and what they will get for it. The Wall Street Journal saw some invitations—they’re offering a seat at a roundtable with Trump for $250,000, and a photo opp with the president for the precise sum of $88,600. JD Vance offers entry-level fees: $75,000 for a roundtable and only $35,000 for a photo. That’s less than a Subaru. A Trump-aligned superPAC, MAGA Inc., has more than $400 million in cash that it hasn’t spent on the midterms. And it’s not clear how many people are coming: The center can hold up to 21,000 people. Ticket prices have been cut from $5,000 to zilch, if you win a “lottery” being held by the organizers. One senses that the odds are good. Fox News reported that only 2,000 tickets had been distributed as of Thursday.
Blame China: Forget Canada, this time 19 of the G20 nations’ finance ministers (including Russia—hold that thought) said China was the main factor blocking global growth, at least according to U.S. Treasury Sec. Scott Bessent, who wanted the nations to agree on plans for China to stop undercutting other countries’ production. “We believe that non-market-based economies pushing out a never-ending stream of cheap exports is not sustainable,” said Bessent. But China wouldn’t sign on to a U.S.-backed package of measures to slow those exports. Bessent didn’t discuss the U.S. national debt which last month hit $40 trillion, and falling prices and growing yields for U.S. government bonds. Russia’s finance minister made an unexpected, and apparently unwelcome, appearance at the invitation of the U.S., which hosted the meeting in Asheville, North Carolina. European finance ministers shunned Russia and refused to appear for a joint photo or statement, given the ongoing war in Ukraine.
Here’s the Beef: With U.S. beef farmers facing an uncertain future as high prices discourage consumption and President Trump’s plan to import foreign ground beef threatens to undercut American ranchers, U.S. Agriculture Secretary Brooke Rollins unveiled a plan to help ranchers, but some ranchers said the plan would only hurt them. Relaxing slaughtering regulations could threaten the safety of the U.S. meat supply, small slaughterhouse owner Jim Hertzog told the New York Times. “We have the best and the safest beef in the world, and why in the world would you want to lift regulations to make it easier?” he asked.
Tax collection turmoil: President Trump’s cuts to the IRS have had a predictable effect: Cutting 30% of the tax agency’s auditors has cut revenue from audits by 35% in fiscal 2025, to $6.5 billion. As the effects of the cuts roll through the agency, revenue is expected to decline further. While overall tax revenue grew last year along with the economy, to hit $5.3 trillion, most of it is in withholding from paychecks. Meanwhile, the IRS estimates that about $700 billion in taxes go unpaid every year.

(NATP)

Elon’s World

Hey kids, let’s make turbines: You can say one thing about Elon Musk: When he sees a problem, he zeroes in on it. One chokepoint for AI expansion is energy, and while the big data centers all hope to run on solar and nuclear energy one days, right now they need natural gas, and there’s a shortage of the turbines that use natural gas to spin and turn generators. So Musk’s said last weekend he’ll use SpaceX $SPCX ( ▲ 2.05% ) to make turbine blades, finely machined steel parts, a shortage of which is part of the problem of getting data centers online quickly. That’s an approach that worked when he needed rockets to get his Starlink satellites into space, but didn't do so well when he tried to cut government waste. The announcement had a predictable effect on turbine blademakers when markets opened Monday: Howmet Aerospace $HWM ( ▲ 0.75% ) fell more than 7% Monday, and Berkshire Hathaway’s $BRK.A ( ▲ 0.63% ) Precision Castparts and DPC $DPC ( ▼ 0.28% ) were also hit.

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How Farmers Are Feeling The Squeeze

Cheddar's Big Business This Week — Thu, 27 Aug 2026 20:30:00 +0000

BROUGHT TO YOU THIS WEEK BY:

Wil Bledsoe runs a 20,000-acre farm on Colorado's northeastern plains with his brother, Jim, and father, Bill — roughly 800 to 1,000 head of cattle alongside 2,500 acres of corn, wheat, and grain sorghum. BBTW editor Peter Green caught up with him to talk about how tariffs, trade policy, drought, and packer consolidation are reshaping the economics of American ranching and farming.

With all the tariff and trade policy shifts — including cheaper beef coming in from Mexico — how has that affected your operation?

Honestly, the border being closed probably helped our bottom line as much as anything. Foreign cattle — and not just picking on Mexico — can be raised so much cheaper because they don't have the red tape we have: workmen's comp, minimum wage, land taxes, on and on. Their cost of production is a fraction of ours. We just can't compete. It's the same as cell phones, computers, tennis shoes — they undercut us and dump supply into the industry, and they love keeping demand down for American beef by flooding us with foreign beef.

There's been talk of loosening restrictions to let in more Mexican beef and keep consumer prices down. What's your take?

On concept, that makes sense — no different than dumping cheap shoes on our market. But retailers have such a strong hold on this that I don't think it works the way people assume. There's only a handful of grocery chains controlling a huge percentage of sales, and they're moving as much beef as they can handle right now at these prices. The demand is there. So if cheap cattle comes in from Mexico, the grocery stores aren't going to lower prices — they're just going to pocket a higher margin.

And the Big Four processors, Tyson $TSN ( ▲ 0.99% ) , JBS $JBS ( ▼ 0.24% ), Cargill and National Beef, how do they factor in?

They seem to make a killing, to be honest. A steer carcass in America right now runs roughly $3,500. They can buy one from Brazil for maybe $1,500, ship it up here for $500, and still sell it for the same $3,500 [as chilled, boxed beef].

Are you actually profitable right now, given feed and other costs?

Yes, on the cattle side, for sure. Farming on the grain side is different. Over the last five years, our production costs on corn, wheat, and milo have gone up 50 percent or more. On cattle, input costs are up 30-plus percent over three years — but until recently, beef prices had outpaced input inflation. Prices have come down significantly in the last two months with the border reopening, so now the two are close to par.

So these are good times to be a cattleman, if not a grain farmer?

Correct. Cattle and beef production has been very profitable the last two to three years — record profitable.

What about fertilizer costs, especially with supply issues out of the Gulf?

For sure — a lot of fertilizer comes from petroleum byproducts, so that's part of the equation. But it's also controlled by a few multi-billion-dollar multinational corporations that are essentially monopolies. That's another part of the equation that's probably not talked about enough. Combined, it's put a real squeeze on farmers.

How has drought affected your pasture this year?

It's been terrible this summer — dry across the western U.S., especially the Northern High Plains. We just got a nice rain, which lifted our spirits for the whole week. But it's incredibly spotty — you can go 20 miles in any direction and one place gets a big rain while another gets nothing. It's not a blanket statement that it's dry or wet; it looks like a damnation, pockets everywhere.

Does family-scale ranching still look sustainable long-term?

Like any business, you have to compete with input costs, and economies of scale come into play. If you're staying stagnant, you're not keeping up. Margins in agriculture are slim in a good year, nonexistent in an average year, and negative in a bad one — and there are just as many bad years as good ones. So you have to keep expanding to offset that, to get your units of production up.

What about farm bill payments and support programs meant to offset trade disruptions?

That's a frustration for a lot of farmers. They've been arguing about a new farm bill for six or eight years. It's been "in the ninth inning" for years now. There's good in it, but I think it's skewed toward bigger operators. Smaller farmers might get the same payment per acre, but their cost per production is so much higher because they don't have the volume. It's not fair in that regard.

On packer concentration, roughly 80 percent of the market is controlled by the big four processors.

That's correct. What's really alarming is that two of the big four are foreign-owned — Brazilians own or control JBS and National Beef. People say there's competition because there are four packers, but they're so spread out geographically that in many regions there's virtually no competition — just one packer bidding on your cattle.

Speaking of consolidation — JBS is now moving to fully acquire Pilgrim's Pride $PPC ( ▲ 1.04% ), the chicken processor.

To me, that's super, super scary. They're foreign-owned, so they essentially have endless money — the Brazilian government can just print more reals every day. And it's not a hypothetical concern, either: The founders [and controlling shareholders], the Batista brothers, spent time in Brazilian prison in the last few years after being found out to be crooks. I think they tried to bribe hundreds of senators and politicians.

Does the new round of tariffs on Canada worry you?

Not really. Canada needs us a lot more than we need them. I'm all for free trade as long as it's fair and both sides come out net winners. We've been on the losing end of some of these trade imbalances for decades.

This interview has been condensed and edited.

—Peter S. Green

Big Businesses mentioned this week:

$TSN ( ▲ 0.99% ) $JBS ( ▼ 0.24% ) $PPC ( ▲ 1.04% ) $NKE ( ▲ 0.49% ) $ONON ( ▲ 2.09% ) $DECK ( ▲ 1.74% ) $NVDA ( ▼ 0.03% ) $MS ( ▲ 0.81% ) $META ( ▲ 0.57% ) $GOOGL ( ▲ 1.77% ) $PSKY ( ▲ 2.12% ) $WBD ( ▼ 0.57% ) $WMT ( ▲ 1.34% ) $KSS ( ▲ 2.62% ) $MSFT ( ▲ 0.65% )

This week, big business!

The Usual Suspects
Tech Talk
Trumplandia
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The Usual Suspects

Nike runs out of Air: Michael Jordan ain’t what he used to be, and that’s giving Nike $NKE ( ▲ 0.49% ) a kick in the gut. Shares are down 39% this year, as Jordan’s aura fades nearly a quarter-century after his 2003 final retirement (he’d quit playing twice before). One-time megamarket China has its own stars and brands, and newly chic sneaks like On Holding’s ON $ONON ( ▲ 2.09% ) , and Deckers Outdoor’s $DECK ( ▲ 1.74% ) Hoka are winning market share in the U.S. “A business built on being the cultural and innovation leader in its category is a much tougher hold once that edge dulls, and we’d rather own the disruptors than bet on a legacy leader clawing its way back,” David Wagner, a portfolio manager at Aptus Capital Advisors, told the Wall Street Journal. Shares in Nike are down 77% in the last five years.

Nvidia’s got questions. And you thought the AI boom-bubble was about to burst! Despite a dearth of revenue for AI providers, and an empire of data centers under construction years before they’ll generate any profits, Nvidia $NVDA ( ▼ 0.03% ) , the chipmaker whose silicon wafers fuel the boom, is doing very well, thank you. Shares rose 9% Thursday, after the company said it expected revenue to grow 70% in its 2028 fiscal year. Analysts polled by Factset had predicted a mere 45% rise. To ensure demand for its chips, and to fend off Chinese rivals, Nvidia has been financing many of its clients, and two weeks ago teamed up with some big Wall Street firms to provide $500 billion in financing to the data centers who are buying its chips. That’s about 10% of Nvidia’s $5trillion+ market cap, but it’s left Nvidia with some massive off-the-books liabilities, that could turn sharply south if demand for AI services flags. Nvidia CFO Colette Kress says it’s not “circular financing,” Nvidia’s just helping tech firms over the hump. “The equity returns on our invested capital will be excellent,” she said on a call with investors. Analysts at Morgan Stanley $MS ( ▲ 0.81% ) call it “balance-sheet-as-a-service,” and rate Nvidia’s debt as “neutral,” meaning there’s no visible upside and add that it’s too early to buy. Investor Will Rhind, CEO of GraniteShares which manages $16 billion in assets, says Nvidia’s argument misses the point. “There’s not a lot of concern in the market anymore about demand for Nvidia’s chips,” he told the Wall Street Journal. “The bigger questions now are about the broader AI narrative.”

Meta gets spanked (and richer): Can kids become un-addicated to social media? Meta $META ( ▲ 0.57% ) says it will do what it can to help, and agreed to pay up to $18.7 billion to settle 48 states’ legal claims across the country this week. It will tune its tech to stop stealing kids attention spans, halting alerts for Facebook amd Instagram during school hours and overnight, and putting a two-hour time limit on its apps for users uner 18. Meta will hold back $5.3 billion in payments until TikTok and Alphabet’s $GOOGL ( ▲ 1.77% ) YouTube put default one-hour time limits for kids on their apps and also pay $5.3 billion each. “The payouts are peanuts compared to the profound harms Meta’s profit-driven addictive features inflicted on kids,” said Florida’s AG, James Uthmeier, who says he’s looking forward to seeing Meta in court. Investors may have been expecting worse, because the settlement wiped away the uncertainty and sent Meta’s shares up 3.4% on the news, increasing the company’s market cap by about $35 billion, turning the cost of the settlement into a handsome profit for investors.

Paramount pokes the bear. When details leaked last weekend of a secret Friday meeting between California AG Rob Bonta’s team and Paramount $PSKY ( ▲ 2.12% ) over its planned merger with Warner Bros. Discovery $WBD ( ▼ 0.57% ) , the AG said he won’t meet again until Paramount “engage[s] in a way that’s sincere.” Press reports say Bonta wants Paramount to keep the two studios separate to preserve jobs and production numbers, and to spin off some cable channels, possibly incluoding CNN. Paramount denies it leaked the info. Commenting on the kerfuffle, PR practitioner Dylan Jones said you need to be skilled at practicing the dark arts of leaking. “That’s why you need to be sure that your leak strategy has some plausible deniability built into it, and that you're certain the upside is worth the possible downside if it all goes wrong. I won't lie, I love the Machiavellian side of corporate communications," he said.
Spending stall: With inflation stuck at 3.7% in July, far off the Fed’s 2% target (even if the new Fed chair wants to change the way inflation is measured), U.S. consumers are getting nervous. As BBTW noted last week, more consumers are tapping into home equity and retirement savings to meet everyday costs. Commerce Dept data released this week shows consumer spending flat in July from June, after it rose 0.4% from May. That’s been hitting the bottom line of many retailers. “Consumers are shopping but they are being very value-conscious and very selective,” LSEG Consumer Research Director Jharonne Martis told my colleague, Justine Miller. While some retailers are still going strong, others are beginning to feel the pinch. Walmart $WMT ( ▲ 1.34% ) reported its slowest sales growth in more than six years, with comparable store sales rising only 2.6% over last year. Shares fell 9% on the news. CFO John Rainey said $4-a-gallon gasoline is squeezing consumers. “There are choices that consumers are making,” he said on an earnings call. “Our customers are experiencing persistent financial pressures from inflation in their everyday expenses,” Kohl’s $KSS ( ▲ 2.62% ) CEO Michael Bender told analysts on Wednesday. Second-quarter profits fell to $151 million, from $153 million a year earlier, while net sales slipped less than 1% to $3.32 billion.
Only Cash: America’s favorite, er…fantasy website, OnlyFans, is such a massive cash machine that before he died of cancer in March, its closely held parent company Fenix had paid owner and founder Leo Radvinsky more than $700 million in cash dividends in the past year and a half. In the two years before that, he’d collected a total of nearly a $1 billion. Radvinsky died of cancer, and his widow, Yekaterina, now controls the firm. Only Fans counts on some 2.5 million so-called “creators” for its, er…content, sold to about 132 million active “fans.” Most surprisingly, the company has only about 47 employees.

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Tech Talk

Gates’ window into AI: Fresh from his congressional grilling over Jeffrey Epstein, Microsoft $MSFT ( ▲ 0.65% ) founder Bill Gates is ringing alarm bells about AI, warning that companies are rushing ahead without a plan for managing the massive disruption AI will bring. “The transition to this new AI era will be one of the most turbulent times in human history,” Gates wrote in a 12-page letter on personal website on Wednesday. “I don’t see evidence that leaders, experts and communities are confronting the challenges adequately.” He called for more education and taxes on AI tokens and bots to slow the rush and prepare the future. But how seriously will corporate America take his warning? BBTW spoke with Umesh Ramakrishnan, Co-Founder of global executive search firm Kingsley Gate and AI-boosted hiring platform Ignyte, who’s in front of C-suite execs on a near daily basis. We asked him: Are C-suite execs prepared for the AI tsunami? He said: “Corporate leaders fall into three camps right now: The skeptics, who look at every clunky AI demo and conclude this is another overhyped cycle; the ostriches, who know it's real and are quietly hoping it stays someone else's problem for another two years; and a small third camp that has actually looked at the slope of the curve and started reorganizing around it.” We asked: I’m guessing they all want to tell themselves they are the forward-thinking ones, just because they have an AI line in their budget. What’s the reality? He said: “Writing a check is not the same as reading the curve. The real tell is hiring. If you're still backfilling the same entry-level layer you filled two years ago, you're a skeptic. If you've quietly stopped backfilling it and haven't said so out loud, even to yourself, you're an ostrich. The [relatively few] leaders in the third camp are doing the harder thing. They're breaking their own org chart down into tasks and asking which layers still need to exist, before the market answers that question for them. [Unfortunately], most leaders are not ready for that question yet."

Trumplandia

Blame Canada: Donald Trump is mad at Canada. After wildfire smoke from Canada drifted into the U.S. (where wildfires were also raging) last month, Trump threatened to put trade sanctions on Canada. Then he followed through. It’s not entirely clear why, but last weekend after Canada refused what it called unreasonable demands from the U.S. (including an end to putting French labels on U.S. goods sold in the bilingual country). Trump announced 50% tariffs on many Canadian goods. That violates the free trade agreement that’s in place, but it’s hard to know yet what ti means for U.S. consumers. John Ricco, the deputy director of policy analysis at the Yale Budget Lab, a nonpartisan think tank, told the New York Times that the new tariffs would raise the average tariff rate on Canadian imports to about 7.6 percent, from roughly 5.3 percent. But some sectors are going to be hit hard. Automakers who got used to building cars across Canada the U.S. and Mexico will pay more, as will American car buyers. Lumber will go up, too. But perhaps most distressing of all, Canada has told the U.S. right where to put its tariffs. Expect the price of toilet to paper to rise by up to 50%. That’s because the U.S. imported $328 million worth of finished toilet paper directly from Canada in 2024. Trump renamed Lake Ontario “Lake America” on Thursday prompting a deluge of Canadian jokes on Twitter about renaming Lake Michigan “after the Epstein Files.”
Treasury and Fed on Collision Course Over Yields and Inflation: A policy rift between Treasury Secretary Scott Bessent and Federal Reserve Chair Kevin Warsh is unsettling financial markets, as the two key economic stewards pursue conflicting strategies on bonds and inflation. Ahead of the Fed’s annual Jackson Hole symposium, Bessent surprised Wall Street by announcing plans to “at least double” Treasury buybacks of long-term government debt. The maneuver aims to cap long-term borrowing costs following a 19-year peak in bond yields. But investors warn that suppressing yields juices the economy and undermines the Fed’s fight against inflation, which remains elevated at 3.7%. While Bessent seeks lower borrowing costs, Warsh is trying to let market forces determine yields without heavy-handed central bank forward guidance. Fixed income portfolio manager Scott Barnard told CNBC that the divergence has created the distinct impression that the Treasury and Fed are “pulling in opposite directions.” Meanwhile, Greg Peters, co-chief investment officer at PGIM Credit, criticized the Treasury's market intervention as a “self-limiting, self-defeating strategy,” adding, “The markets are looking for something out of Warsh, but I am not sure what he's supposed to do here.”

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Bond Market Turmoil and The Broader Economy

Cheddar's Big Business This Week — Thu, 20 Aug 2026 20:30:00 +0000

New economic data is in and it’s not looking so great. Inflation is stuck above 3%, GDP growth was 1.5% annually in the second quarter, unemployment is at 4.1%, housing starts are down 12.4% over last year, and on Wednesday the national debt pile reached $40 trillion, double what it was in 2017. Consumers are tapping home equity to pay their credit card bills. Americans are worried about how the economic pie is being split, says Moody’s chief economist, Mark Zandi. From 1945 to 2000, he noted, workers received close to two-thirds of the pie, and capital received the other third. But China’s rapid entry into the global economy, the Great Recession of 2008, the pandemic, and other forces have “put labor on its heels,” pushing the split closer to fifty-fifty, and Americans are fearful the trend will continue. Despite trillions spent on AI, it’s not boosting the economy for everyone. “We’re not (yet) seeing any productivity growth gains from AI,” San Francisco Fed Vice President Adam Shapiro wrote. “The data are saying that firms are squeezing more hours out of labor and capital as opposed to getting more output per hour of work.”

Now the U.S. Treasury bond markets, where interest rates on 30-year long bonds, generally considered one of the world’s safest bets, recently hit 5.3%, up from 1.7% in 2021. That’s the highest yield since 2007. Investors and bankers had been hoping Fed chair Kevin Warsh would announce the Fed will start selling off the T-bills it’s holding when he addresses central bankers and financiers at the annual Jackson Hole gabfest next week. But that now seems unlikely, leaving the markets to drift and the Fed to read its tea leaves, rather than the Fed telling markets what it plans to do. To make sense of all of this, BBTW columnist Peter Green spoke with Chris Hodge, Chief US economist at Natixis, an international investment bank, and a former economist with the Federal Reserve. He spoke about the Treasury's bond buyback program and the deeper structural problems in the US economy.

The Treasury has announced it will buy back long-dated bonds. What does that actually accomplish?

Ultimately, we're not changing the total amount of debt that is issued, so the underlying fiscal dynamics haven't changed because of this. But the Treasury put out a statement that was somewhat vague — that it will purchase at least X amount of bonds. That puts a little uncertainty around what the number is going to be, so it does help to prevent a buildup in positioning.

What do you mean by positioning?

Investors that want to take a bet against longer-term bonds — betting the yields will go up — will be less likely to do so, because the Treasury could ultimately buy those bonds back and cause a loss for them. If the Treasury is going to go in and restrict supply, that's going to put an artificial floor under the price and an artificial ceiling on the yield.

Is that good or bad for the economy?

It's sort of neutral, because you have the same underlying problem. It's really cosmetic. What it could potentially do is loosen financial conditions, which would increase inflation. You're putting a Band-Aid — a very short-term fix — on a structural problem. And it's trying to manipulate the market to prevent yields from rising on the back end, which, by the way, is exactly what Scott Bessent had accused Janet Yellen of doing — manipulating the yield curve for political ends. These sorts of things don't last. The bond market is huge, and investors have plenty of ways to express their views on the efficacy of policymaking. It's not going to be a panacea for longer-term borrowing costs.

What problem is it supposed to solve right now?

It's supposed to prevent the increase in yields from the 10-year bond up to the 30-year bond. Mortgage rates are based on that part of the curve. And remember, yield and price are inverse: The price goes down, the yield goes up. So betting against the bond is betting for the yield to rise — which means interest rates rise on mortgages, credit cards, and everything else. But markets convey signals. Yields rising are an indicator that the market believes a series of things may happen — one thing that might push up longer-term yields is an increase in inflation expectations. And if you're trying to artificially loosen financial conditions, that's only going to promote more inflation in the short run.

And the Treasury isn't buying these bonds back with a surplus.

Exactly. They're just going to buy it back through issuance at the short end of the curve. The Treasury is trying to control the yield curve. And maybe demand for seven-year bonds starts to go down because there's so much supply, so yields rise there. The 30-year bond is based on the yield of the 29-year and the 28-year — further down the line you get to the seven-year, it's elevated, and that has knock-on effects out to 30.

Explain to an ordinary person: What's wrong with the economy right now?

The economy is being driven by narrower and narrower segments of participants. More discretionary spending is now done by the top 20% of earners than the bottom 40%. Similarly, in the corporate sector, data center construction, AI investment, the tech buildout — that's really driving private sector growth. But the components of the economy that are sensitive to interest rates are struggling — manufacturing, industrial production, durable goods purchased on credit, like household appliances or cars. Consumers are drawing down their savings — the savings rate is about 2.6, 2.7%. A year ago it was about 5.5%; the year before, 6.6%. Consumers are depending on their credit or dipping into their savings to maintain the same level of purchases.

The unemployment rate is low, yet workforce participation is shrinking. What's happening in the labor market?

The unemployment rate is fairly low, but if you look at survey data, consumers are not optimistic about their ability to find a newer, better, higher-paying job. All of that contributes to an environment where people are hesitant to take big risks — to start new businesses, to put an addition on their house.

And when you have such uncertainty about structural things — immigration, how much displacement is going to do to the labor force — it becomes really nerve-wracking for somebody that's out of a job right now to find a new job. The number of weeks that somebody is typically unemployed has continued to drift up. So while unemployment claims are fairly low and people aren't being laid off at very high clips — that's good — if you're out of the job force, there's an increasing risk that your skills are going to be more obsolete by the time you find a job.

All of that leads to an economy that's not collapsing, but growing about 1.7% — a little below potential. When you're running budget deficits of 6.5%, with pretty big fiscal stimulus to start the year, you would expect more.

If you were in charge, what would you do?

Certainly cut the budget deficit. Government tax collection has been fairly steady around 17.5% of GDP for about 50 years. Spending has always been around 19 to 20% — that gives you a 2.5% to 3% deficit per year, which is perfectly fine. It's the spending that's continued to go up. We have a spending problem, not a taxing problem.

Entitlements comprise about 70% of the federal budget, defense about 10%, interest on the debt about 11% — close to 90% of the budget in just those items. You need to tackle entitlements. These parlor games with issuance are throwing deck chairs off the Titanic.

The Social Security Trust Fund is going to be depleted by about 2032, and you're looking at immediate cuts in benefits of about 20% to 25%. It's not the wealthy who are going to be hurting — it's the most vulnerable Americans. Politicians know what needs to be done; they just don't know how they're going to get elected after they do it. When Social Security started, there were about 35 workers per beneficiary. Now it's about 2.5 to 1. That's not sustainable, especially when you're lowering immigration. Arithmetic is arithmetic. We could have dealt with this 20 years ago relatively painlessly. We could deal with it now with a little pain. Or we could wait — and there's going to be a lot of pain.

The conversation has been edited for length and clarity.

—Peter S. Green

Big Businesses mentioned this week

$PSKY ( ▲ 2.12% ) $WBD ( ▼ 0.57% ) $AMC ( ▲ 4.24% ) $CNK ( ▼ 0.2% ) $META ( ▲ 0.57% ) $MRNA ( ▲ 5.38% ) $MRK ( ▼ 0.54% ) $DIS ( ▲ 0.69% ) $MCD ( ▼ 0.21% ) $WEN ( ▲ 2.55% ) $QSR ( ▲ 0.61% ) $LZB ( ▼ 0.71% ) $JBS ( ▼ 0.24% ) $PPC ( ▲ 1.04% ) $SPCX ( ▲ 2.05% ) $TSLA ( ▲ 0.52% ) $GOOGL ( ▲ 1.77% ) $NVDA ( ▼ 0.03% ) $BLK ( ▲ 1.62% )

This week, big business!

The Usual Suspects
The Short Stack
Elon’s World

The Usual Suspects

Paramount’s hardball pitch: Paramount $PSKY ( ▲ 2.12% ) CEO David Ellison appears to be getting nervous about a lawsuit by 12 state attorneys general and the Writers Guild of America that could block his planned acquisition of Warner Bros. Discovery $WBD ( ▼ 0.57% ) . So nervous, that he's asked a federal judge to force the AGs to post a $1.88 billion bond to cover the costs of delaying the closing if they lose. A trial is set to begin in March, but by then Ellison will be on the hook for nearly $1.3 billion, if he can’t reach agreement with the AGs and close the purchase in September. Meanwhile, the three largest U.S. movie theater chains, AMC $AMC ( ▲ 4.24% ) , Regal and Cinemark $CNK ( ▼ 0.2% ) , which account for some 60% of U.S. movie ticket sales and half the nation’s screens, say they no longer agree with the AGs’ contention that the merger would be bad for their business, and say they are now satisfied with Ellison’s pledge to make at least 30 theatrical movies a year and give them ample time to run before putting the films on cable or streaming. Even the movie theater trade group, Cinema United, whose members own 80% of America’s 31,000 screens, is now calling on Ellison and the AGs to reach a quick accord. But that may simply be a recognition that Ellison’s acquisition will go through, and they don’t want to pick a fight with their supplier. California AG Rob Bonta dismissed Ellison’s demand. Paramount and Warner, he said, are “lying in a bed of their own making, and once again, trying to blackmail us to get us to back down.”
Meta on Trial: Is social media addictive? That obvious truism has yet to become settled jurisprudence. Instagram and Facebook parent Meta $META ( ▲ 0.57% ) is facing thousands of lawsuits alleging that it put growth ahead of the safety of underaged users. One suit that began this week in California could cost the company as much as $200 billion, if attorneys general from California, Kentucky, Colorado and New Jersey win their argument that Meta violated state consumer protection laws and a 1998 federal child protection law, fueling a national youth mental health crisis. “What you’re going to hear in this trial is how Meta hooked children on its platforms,” California deputy AG Megan O’Neill said in opening arguments. “It designed platforms so that children would keep coming back.” One key piece of evidence is an email conversation about Instagram between two Meta employees. “Oh my gosh y’all IG is a drug,” wrote one. The co-worker responded: “Lol, I mean, all social media. We’re basically pushers.” Meta’s attorney said the workers didn’t really mean it, but conceded that some teens struggle to manage their time. Meta has lost or settled a number of suits and was forced in a New Mexico case to turn off overnight alerts to kids, hide the number of likes a photo gets, and pay $942 million to tackle the problem. Meanwhile, the U.S. government’s Immigration and Customs Enforcement service, ICE, has banned the use of Meta Glasses, the RayBan-designed eyewear that quietly films and records. Meta Glasses data is stored on Meta servers, which may be liable to a court subpoena, and that could just be why ICE made a budget request this year for $7.5 million to develop its own smart glasses that could identify “illegal aliens.” Shares in Meta are down more than 27% in the past year and 70% of Americans don’t trust Mark Zuckerberg, according to recent polling.

Vax me, Please! Shares in U.S. vaccine maker Moderna $MRNA ( ▲ 5.38% ) nearly tripled on Wednesday when the company announced the successful trial of a skin cancer vaccine custom made for each patient, using the same mRNA process that created the Covid vaccine. The hope is that the same technique could be applied to other cancers, custom-designing a shot that would let the body kill the cancer cells. Moderna CEO Stephan Bancel called the drug “an entirely new class of medecine.” The trial is good news for Moderna whose shares were down nearly 85% from a pandemic-era high before the news, and were still down 60% from that peak on Thursday. Last year, Moderna was the most shorted stock in the S&P 500. The vaccine was developed in cooperation with Merck $MRK ( ▼ 0.54% ) , whose shares rose 12.5% Wednesday and are up more than 95% over the past five years.

The Mouse that Roared: ABC network parent Disney $DIS ( ▲ 0.69% ) has sued the Federal Communications Commission saying the FCC and its Trump-appointed chairman, Brendan Carr, are threatening its broadcast licenses in retaliation for news coverage, talk shows and Jimmy Kimmel monologues that irk President Donald Trump. “Government censorship is deeply un-American,” the suit says. The FCC forced all eight of Disney’s owned and operated local tv stations to have their licenses reviewed years ahead of schedule. Disney already paid Trump $16 million to settle complaints that anchor George Stephanopoulos allegedly defamed Trump, and after Carr called for Kimmel to be axed, Carr told ABC that it could “Do this the easy way or the hard way.” Disney CEO Josh D’Amaro said his company will stand firmly behind its journalists. "We're not going to be told how to run that side of our business,” he told CNBC. Shares in Disney are down 8% in the past year, but up 11% in the past month.
The Whopper is Back! Once-failing also-ran burger chain Burger King is back in the game, as a slew of innovations, revamping menus and restaurants saw same-store sales rise 8.5% in the second quarter over last year. That beat McDonald’s $MCD ( ▼ 0.21% ) , and trashed Wendy’s $WEN ( ▲ 2.55% ) , which saw a 7% decline. Part of its success? U.S. CEO Tom Curtis fielded more than 3,000 customer calls, complaints and suggestions. Also helping: Lower fees for franchisees, loans to help them revamp restaurants, new and better burgers and buns, and a new top chef, Amy Alarcon, who famously developed the Popeye’s chicken sandwich that went viral in 2019. This is the stuff fast food chains dream of. The end result? Shares in the King’s parent Restaurant Brands International $QSR ( ▲ 0.61% ) are up 24% in the past year, while McDonald’s shares are down nearly 14% and Wendy’s are down nearly 15% over the same period.

(Google)

Sit back and.. Get nervous? La-Z-Boy $LZB ( ▼ 0.71% ) , the iconic recliner maker, is facing some strong headwinds as nervous consumers pull back from big-ticket purchases and interest rates remain high. Sales of its loungers, which can cost north of $4,000, fell 3% to $475.7 million in the last quarter from a year earlier, and the company lost $2.3 million, compared with a profit of $18.2 million a year ago. Sure La-Z-Boy is a small company, with a market cap of just $1.7 billion before the report, but it's indicative of the pressures facing businesses that aren’t in the world of AI and hi-tech (see the Q&A above). La-Z-Boy shares fell more than 16% on the news.
A Lake of Troubles: It seems that it was an SEC investigation of Guggenheim Partners CEO Mark Walter that sparked his emergency sale of the Los Angeles Lakers last week to Josh Kushner and former Disney $DIS ( ▲ 0.69% ) CEO Bob Iger. So why sell? It seems Walter may need the cash to cover some $20 billion in loans he’s made to his own companies, the TWG Group, that the SEC and the U.S. Attorney’s office are investigating. In fact, the Financial Times reports that Walter tried to borrow several billion dollars against the team from Apollo Capital Management. And it’s not entirely clear that Walter is out of the deep water yet. Jeannie Buss, whose family still owns 17.8% of the team after selling control to Walter two years ago, says she’s opposed to the sale, and claims she has the deciding vote. Her five siblings say they all want to sell. Looks like a jump ball that’ll perhaps be going to court, and not the basketball kind.

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The Short Stack

Game of Chicken? JBS $JBS ( ▼ 0.24% ) , the world’s largest meatpacker, says it wants to complete its takeover of U.S. poultry processor Pilgrim’s Pride $PPC ( ▲ 1.04% ) . JBS, controlled by the billionaire Brazilian Batista brothers, Joesley and Wesley, already owns 82% of Pilgrim’s Pride. Pilgrim’s Pride shares are down more than 32% in the past year but up about 14% on news of the proposed buyout. Shares in JBS are down 9% in the past year and down about 1% in the past week. It’s not clear if the buyout needs a nod from regulators, as it would further consolidate the meat-processing industry, and involve foreign control of a key market. A combined JBS/Pilgrim’s Pride would be the largest U.S. poultry processor, with 30% of the market.

Elon’s World

He’s back, and he’s loud. With SpaceX $SPCX ( ▲ 2.05% ) shares inexplicably bouncing back above and just slightly below their IPO price, the sun seems to be shining down on Elon Musk. New York Gov. Kathy Hochul, a Democrat, just approved a “money transmitter” license for X, part of Elon’s plan to build a global online banking system to go with the global space-based mobile phone system and all the rest of it. The driverless Cybercab is expected to launch this month in Austin, where the cars are being made in one of Tesla’s $TSLA ( ▲ 0.52% ) large factories. But the Cybercab has a way to go. Road experience is vital for perfecting the driverless control, but Cybercabs had only driven a total of about 380,000 miles by the end of last quarter, while Alphabet’s $GOOGL ( ▲ 1.77% ) Waymo has a fleet of 4,000 vehicles with 220 million rider-only miles under its belt. Tesla shares are down more than 21% so far this year. SpaceX shares have fallend 20% since they began trading, and were changing hands for about $130 on Thursday morning, just below the $135 IPO price. None of that is helping Tesla, and the Washington Post reports that once-diehard Musketeers are afraid he’s lost his focus on the carmaker, channeling “fear, uncertainty and doubt.” Some commentators have mused into the middle distance about SpaceX buying Tesla to clean up that mess, of course.

(Google)

Who’s making bank on SpaceX? Besides Elon, whose net worth bounced back this week to $860 billion on Wednesday, SEC filings list some of the company’s biggest investors, who likely bought in to early financing rounds and hadn’t cashed out by last Friday’s data release date:
- Peter Thiel’s Founders Fund — $73 billion.
- Fidelity — $51.6 billion.
- Gigafund Management — $29.3 billion.
- Nvidia $NVDA ( ▼ 0.03% ) — $21 billion.
- BlackRock $BLK ( ▲ 1.62% ) — $8.7 billion.
- Harvard’s endowment — $2.2 billion.
- Josh Kushner’s Thrive Capital (which is also trying to buy the Lakers, see above) — $3.2 billion.
- Gina Rinehart’s Hancock Prospecting — $1.3 billion.

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Peak Oil Panic And The Shift To Sustainable Energy

Cheddar's Big Business This Week — Thu, 13 Aug 2026 20:30:00 +0000

Is this the top for oil? Prices may rise and fall as president Donald Trump spars with Iran’s leadership over the Strait of Hormuz, but around the world, governments, companies and consumers are getting the message: Oil is too volatile an energy resource to depend on. China leads the pack here, having stocked up oil reserves when Trump first suggested he might attack Iran again, but countries across the globe are cutting their dependence on oil.

The International Energy Agency says it expects global oil demand to fall by 420,000 barrels a day this year, and OPEC’s crude production dropped by 1.73 million barrels a day to 18.98 million in April, the latest data available.

“We’ve hit the demand peak,” says Carolyn Kissane, associate professor and founder of the Global Energy, Climate and Sustainability Lab at New York University. The Iran War, says Kissane, has impressed on many countries just how vulnerable they are to oil shocks. “The countries that have been very dependent on oil [know] that as they reduce that dependency over time, they will be better off because they will be less vulnerable to the next oil crisis.”

And that means big changes for the world’s oil producers. “Do we need to have a market that's producing 106 million barrels a day? I would say we do not,” says Kissane. The head of Saudi Aramco, the Saudi state oil company, said this week that the world has lost 2.6 billion barrels of production, or 25 days worth of oil, since the war began.

“Oil has made such a mess out of itself because of the Strait of Hormuz that the top 60 oil ministries around the world who are in charge of importing oil for their countries are saying, ‘you know, we want to get off this oil thing because it's not reliable,’” said Jigar Shah, an energy strategist and host of the podcast Energy Empire. “Before that it was the Russian invasion of Ukraine, and before that it was something else.”

But it’s not that global energy demand is falling, quite the opposite. Global energy demand grew 1.3% in 2025, with electricity growing at more than 2.5%, according to the IEA. “We're not hitting peak oil because we're using less energy, we're hitting peak oil because people finally say, ‘enough, I don't want to keep investing in that supply chain when they keep letting me down,’” said Shah.

That’s pushed a permanent shift in energy sourcing, notes Shah.

“What's happened since 2021 is that solar has gone from 5% to 13% of the U.S. grid, and it’s even gone from zero, basically, to 25% of Pakistan's grid,” he said. “A lot of these solutions have now gotten to the point where they're quite successful. And so we're at a point now where, with the Strait of Hormuz, people took the very uncomfortable, very unpopular decision to really figure out how to greatly expand electric vehicles, greatly expand all these other things, because they had no choice.”

In fact, the war has been great news for electric vehicle makers, especially in China. After oversaturating their home market, fleets of BYD EV ‘s were lining China’s docks, slowly aging in the sun. Now, China’s EV makers are exporting their way out of the crisis. China’s EV exports rose 120% in the first half of 2026 from last year, and EV sales have doubled in Brazil, Australia, Korea and Vietnam since the war began. EV sales in Colombia have quadrupled, based on IEA data.

President Donald Trump may have resisted the shift to clean energy in the U.S. but ironically, perhaps, his foreign policy in Iran may have accelerated it both there and around the world.

—Peter S. Green

Big Businesses mentioned this week

$PSKY ( ▲ 2.12% ) $WBD ( ▼ 0.57% ) $ORCL ( ▼ 1.74% ) $DIS ( ▲ 0.69% ) $AMZN ( ▲ 1.94% ) $BA ( ▲ 2.76% ) $ACHR ( ▲ 2.39% ) $FDX ( ▲ 0.06% ) $WEN ( ▲ 2.55% ) $PTON ( ▲ 0.61% ) $BAC ( ▲ 0.21% ) $JPM ( ▲ 0.76% ) $MS ( ▲ 0.81% ) $TKO ( ▲ 0.35% ) $PPC ( ▲ 1.04% ) $TSN ( ▲ 0.99% ) $SPCX ( ▲ 2.05% ) $KALSZZX ( ▲ 0.13% ) $PLYRZZX ( ▲ 0.01% ) $COIN ( ▲ 1.73% ) $NVDA ( ▼ 0.03% ) $BLK ( ▲ 1.62% ) $APO ( ▲ 0.84% ) $GS ( ▲ 0.92% ) $KKR ( ▲ 0.21% ) $INTL ( ▲ 1.09% ) $DJT ( ▼ 1.37% ) $TAETZZX ( ▼ 0.15% ) $TSLA ( ▲ 0.52% )

This week, big business!

The Usual Suspects
The Short Stack
Trumplandia
Elon’s World

The Usual Suspects

Paramount’s Possible Pullout? Sometimes when you’re walking a tightrope, the best thing to do is move the rope, because getting off can be costly. Just ask David Ellison, whose Paramount Skydance $PSKY ( ▲ 2.12% ) (market cap $10.6 billion this week, $8.7 billion two weeks ago) is trying to close its deal to buy Warner Bros. Discovery $WBD ( ▼ 0.57% ) for $111 billion, including debt (about $87 billion in cash and stock). Now, to prolong the metaphor, there’s a stiff wind blowing that could knock Ellison off the highwire: A lawsuit by 12 state attorneys general seeking to block or restructure the deal to protect Hollywood, and keep Ellison from adding WBD’s CNN news division to Paramount's right-shifted CBS News. A trial is set for March, but the delays are costly. For each quarter the deal is delayed past its original September closing date, Ellison has to pay WBD shareholders about $650 million. And if he can’t close the deal by June, he has to pay WBD a $7 billion breakup fee. That’s on top of the $2.8 billion Ellison already paid Netflix to walk away from its plan to buy Warner. Ellison and his father, Oracle $ORCL ( ▼ 1.74% ) founder Larry, are close friends with President Trump, and federal regulators approved the deal within weeks. But they didn’t count on the state AGs. “It doesn’t do you any good to say you cozied up with the Trump administration and it’s going to be fine,” attorney Peter Brann told Variety. “Someone miscalculated about this pretty seriously.” Now, Ellison’s told Paramount’s top dogs that if he can’t reach a settlement with the AGs by October he’ll move out of reach, to Georgia, Tennessee or Texas, which have all offered tax incentives. California AG Rob Bonta called that “blackmail.”
If at first you don’t succeed, buy the Lakers. Josh Kushner, Jared’s brother, is back with another multi-billion-dollar sports deal. This time he’s partnering with ex-Disney $DIS ( ▲ 0.69% ) CEO Bob Iger in a deal to take over the Los Angeles Lakers, less than two weeks after his failed bid to buy a chunk of the revenue from soccer governing body FIFA, which was torpedoed by FIFA members who complained the deal was a secret stitchup aimed at enriching FIFA chair Gianni Infantino and investors, including Kushner. Guggenheim Partners CEO Mark Walter is selling control of the Lakers just a year after he bought it for about $10 billion from the Buss family, which had owned the Lakers since 1979. The Kushner-Iger deal values the Lakers at $12.5 billion, and still needs NBA approval. Walter is facing a federal investigation of private credit deals tied to his financial empire. He also owns the L.A. Dodgers and has a stake in English Premier League soccer team Chelsea. Chelsea rival Liverpool may also have a new owner: Amazon $AMZN ( ▲ 1.94% ) chief Jeff Bezos is part of a consortium looking to buy a piece of the team from Boston Red Sox owner John Henry’s Fenway Sports Group. All that cash makes the New York Yankees’ new deal with PE firm Apollo’s sports unit seem like small change. The $2.6 billion financing agreement combines credit and equity, refinancing some of the Bronx Bombers’ debt and giving it more capital to grow. Yankees parent company Yankee Global Enterprises, which also owns stakes in soccer teams NYC FC and Italy’s AC Milan, stays in the hands of the Steinbrenner family.

Boeing bits and pieces: After losing $428 million in the second quarter (down from $612 million the year before), Boeing $BA ( ▲ 2.76% ) is stepping up its house-cleaing operations to focus on building some of the hundreds of airliners it has on backorder. Archer Aviaiton $ACHR ( ▲ 2.39% ) will acquire Boeing’s self-flying air taxi project, Wisk, into which Boeing has already sunk at least $450 million, along with air-traffic software provider SkyGrid and drone maker Insitu. Boeing will get a 16.5% stake in Archer and access to Wisk’s tech stack. Shares in Boeing are up more than 7% in the past month, but they are nearly flat over the past 5 years.
Bezos v. Mamdani: New York City’s Democratic Socialist mayor Zohran Mamdani may have taken a temporary legal hit on his plans to tax absentee homeowners, but he’s taking on arch-capitalist Jeff Bezos at the very core of Amazon’s $AMZN ( ▲ 1.94% ) success. A proposed law backed by Mamdani would force big delivery operators like Amazon and Fedex $FDX ( ▲ 0.06% ) to employ their delivery people directly, rather than relying on subcontractors who often pay less than a living wage. But the gig economy, where most workers get few benefits, is the model that built Amazon, and the company is threatening to move its distribution centers outside the city. “Corporations like Amazon build billion-dollar business models by insulating themselves from accountability through a system of exploitative subcontracting,” Mamdani said in a pointed statement.

Where’s the Beef? Pretty soon it will be in the pocket of investor Nelson Peltz and his Trian Fund Management, if Peltz wins his bid to take the pig-tailed burger chain Wendy's $WEN ( ▲ 2.55% ) private. Peltz says Wendy’s is undervalued, and wants to use his 16% stake to buy out the 7,000-store burger chain, in league with Abu Dhabi-based BlueFive Capital and Wendy’s franchisee Flynn Group. With an enterprise value of $3.9 billion and a market cap of just $1.6 billion, Peltz has a point. Wendy’s shares are down about 20% in the past 12 months, as the cost of beef and labor hit sales and margins. But shares gazoomed 16% on Wednesday, after the Financial Times first reported the planned buyout.
Just keep peddling: After seven years, Peloton $PTON ( ▲ 0.61% ) has finally made an annual profit, earning $63.2 million on revenue of $608 million. A year ago, the peddle-to-stay-slim company lost $118.9 million on $607 million in revenue. But the price hikes that helped it make a profit have damped long-term sales expectations, as the company reported it lost 247,000 subscribers to its connected fitness app in the past year, down to 5.5 million users. Shares tumbled 13% on the news. They’re down 37% for the past 12 months, and 95% from a pandemic-era high.

Placating the Beast: America’s top banks are eager to keep Presdient Donald Trump from rolling back his financial deregulation plans, or hitting them with lawsuits. That seems to be why Bank of America $BAC ( ▲ 0.21% ) has annloucned a $250 billion plan to fund U.S. infrastructure growth over the next 12 months, joining JP Morgan Chase $JPM ( ▲ 0.76% ) , which last year annoloucned a 10-year $1.5 trillion plan to invest in strategic sectors, and Morgan Stanley’s $MS ( ▲ 0.81% ) own $1.5 trillion plan, annlocuned this week. BofA may have felt a sudden urgency, after it ocuntered Trump’s claims that it closed his accounts in 2021 because the bank was “woke” and sought to score political points with the Biden Adminsitration. BofA’s response, which may have left the bank feeling politically exposed: The closures came after careful review by the bank’s money-laundering experts. Yikes!

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The Short Stack

Entourage on Broadway? Ari Emanuel, the loud-talking Hollywood agent (and brother of Chicago ex-Mayor Rom Emanuel) who inspired Entourage’s Ari Gold (played by Jeremy Piven) is coming to Broadway. Emanuel’s Mari Group is in “advanced” talks to buy Broadway and London West End theater-owner ATG for $6 billion from Providence Equity Partners. Emanuel last year beat out ATG to buy TodayTix, a show ticketing platform. Emanuel is also chair of talent agency WME, repping Oprah Winfrey, and CEO of TKO Group $TKO ( ▲ 0.35% ) , which owns martial arts companies UFC and WEE. Broadway theaters are seeing a resurgence after Covid shut them for months. It’s being led by imports from London, including ATG’s The Curious Case of Benjamin Button, and new shows with songs by Prince and Hamilton’s Lin-Manuel Miranda, many of them with budgets hitting $30 million, Broadway Journal reports. ATG owns seven Broadway theaters and 10 in London.
Cluck cluck: A surplus of chicken is driving down prices, as poultry processors stagger under a bad bet that U.S. consumers would swap pricier beef steak for cheaper chicken. Instead, consumer habits, and the lack of a flock-killing epidemic this year, means the chicken market is oversupplied, and prices are falling. Wholesale prices for chicken breasts are down 37% in a year, FactSet reported, and those weaker prices have weighed on profit margins, the Wall Street Journal reports. Second-quarter profit for Pilgrim’s Pride $PPC ( ▲ 1.04% ) fell 96% to $13.4 million. Its shares are down 45% in the past year. Tyson $TSN ( ▲ 0.99% ) shares are down 18% since a May peak, and 2.5% in the past 12 months.
Private equity doldrums: Never mind the megadeals and IPOs, from Paramount $PSKY ( ▲ 2.12% ) ’s $111 billion bid for Warner Bros. $WBD ( ▼ 0.57% ) , or SpaceX’s $87 billion IPO $SPCX ( ▲ 2.05% ) , private equity firms, which make most of their money buying and selling smaller companies, are sitting on an unprecedented pile of firms they’d like to sell, with some 33,575 companies in their portfolios, the New York Times reports. That’s bad news for their investors, including pension funds that got used to above-market PE returns. But in the past four years, PE firms have generated annual returns of 6.4%, well below the S&P 500’s 15.2%. The problem: potential overreach by PE investors who’ve failed to make their investments profitable. “Private equity is stuck because those companies have failed to fulfill their value promise,” Andrew Milgram, CIO at Marblegate Asset Management, told the Times. On the other hand, as the Wall Street Journal reports, “this summer’s hottest arm candy is a private equity boyfriend.”
Prediction market pushback: The New York City Council is investigating prediction markets Kalshi $KALSZZX ( ▲ 0.13% ) , Polymarket $PLYRZZX ( ▲ 0.01% ) , Coinbase $COIN ( ▲ 1.73% ) and Gemini Titan for allegedly using deceptive advertising and targeting minors. It’s the latest salvo in efforts from local and state authorities to rein in the betting platforms. One example cited by the Council was a set of Polymarket ads posting fake trades that appeared to promote insider trading and target minors. A week ago, New York state Attorney general Letitia James sued Kalshi for illegally operating a “gambling app.” This week, flight-tracking platform Flight-Aware sued Kalshi for allegedly using its data without permission or payment, and warned gamblers could try to manipulate air traffic for profit, citing suspected tampering with a weather station at a Paris airport. In Washington, nine Democratic senators wrote to CFTC chair Micahel Selig, warning that bets on wildfires now raging in California and Oregon could incentivize people to set fires. It cited over $1 million in fire-related bets during last year’s California wildfires.

The Circularity Chronicles: Nvidia $NVDA ( ▼ 0.03% ) s laying off its bets onto Wall Street, with an agreement with major banks and investment groups to fund $500 billion worth of AI buildout, a.k.a. a ton of Nvidia chips. Up to now, Nvidia has been supplying the chips to many of its data center customers for a stake in the customer or a promise of future revenue. Now that circular financing is taking another massive step, adding more debt to the market, and shifting systemic risk from Nvidia to Wall Street. Hyperscalers are expected invest $3.5 trillion into AI by the end of 2028, and Wall Street wants in on it. “We need to raise this money as fast as possible,” Larry Fink, the C.E.O. of BlackRock $BLK ( ▲ 1.62% ) , which along with Apollo $APO ( ▲ 0.84% ) , Blackstone, Brookfield, Goldman Sachs $GS ( ▲ 0.92% ) and KKR $KKR ( ▲ 0.21% ) are backing the deal. Nvidia’s poor cousin, chipmaker Intel $INTL ( ▲ 1.09% ) , says it’s only looking to raise $20 billion in a stick offering this week. That’s up from the $15 billion it earlier announced.

Trumplandia

Truth hurts. For all the money Donald Trump has made as president (he has reported about $2 billion since taking office), one venture has been a consistent money-loser: Trump Media and Technology Group $DJT ( ▼ 1.37% ) , the parent of Truth Social, Trump's personal social media platform. TMTG lost $238 million in the second quarter alone, more than 10 times its $20 million loss a year ago. Sure there are a few high-frequency trading firms (more than 10, now the company says) paying $60,000 to $100,000 a month for the firehose from Truth Social, hoping milliseconds of advance access can help them make millions, in a move whose legality is being questioned in Congress. But the biggest problem is having to reprice a lot of its digital assets, including many that were pledged as collateral for loans down to their real market value. The company only had revenue of $1.7 million, although that was up 89% from last year. But the biggest problem is that fewer people are following Trump’s posts: Daily active users dropped to 261,000 in July from 436,000 a year earlier. TMTG says it plans to merge with TAE Technologies, $TAETZZX ( ▼ 0.15% ) which says it will have a nuclear fusion plant running by 2031. Meanwhile, shares in TMTG are down 54% in the past year.

(Google)

Elon’s World

Rockets go up. And up? Isaac Newton would have been flummoxed. How do SpaceX $SPCX ( ▲ 2.05% ) shares defy the laws of gravity? The consensus view was that with massive amounts of shares hitting the market as lockups ended and early investors would cash out, the stock was set to fall even further. Yet, on Thursday morning they were trading at $142, up 30% since last Wedensday’s all-time low closing at 108.27. That’s a remarkable recovery for shares sold at $135 in the IPO and near $160 on their first day of trading. Sure it’s far off the $220 peak they hit within five days of opening, but what’s going on? SpaceX’s unremarkable AI offering, its dream of putting a million earthlings on Mars, and plans for hundreds of thousands of low-orbit satellites creating a giant AI and mobile phone service all still seem like pipe dreams. It would take 15,000 launches a year (up from 325 last year) to get all those satellites into orbit, at which point low-Earth orbit may be too crowded, and rocket fuel could massively compound global warming gases, reports Space.com. But for now, more investors still want a piece of the Musk dream. On Wedensday, Musk told SpaceX employees: “We must win in AI because the future is overwhelmingly AI and robots.” And for Elon himself, that dream is getting bigger. As the Wall Street Journal reports, under a little-noticed provision in Musk's contract, the trillion-dollar payday offered by Tesla $TSLA ( ▲ 0.52% ) might be in sight if the company is sold…to Space X. And any decision to buy Tesla would be made by Musk. “This $1 trillion—that was supposed to be a stretch,” Mary Ellen Carter, who studies executive pay at Boston College, told the Journal. “It turns out it isn’t really that hard. All you have to do is be bought.” By your other company. It’s almost as if he’d planned this all along. Musk also promised any SpaceX employee who wants to go to the moon that they would be able to go to the moon in an all-hands meeting recently. “You have my word,” he said, to huge applause.

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Why Main Street Businesses Are Holding Their Breath

Cheddar's Big Business This Week — Thu, 06 Aug 2026 20:30:00 +0000

While we’ve all been focused on big business here at Big Business This Week, editor Peter Green wondered how small business has been faring. He spoke with Guy Berger, a macroeconomist and labor-market specialist at small-business payroll provider Homebase, about small-business resilience, rising wages, tariffs, immigration and why the outlook could become more difficult later this year.

What’s happening on Main Street, and what’s stressing small business owners most?

In some sense, it’s kind of amazing how resilient Main Street is, given that this has been a very active policy environment for the last year and a half. Small-business sentiment has seesawed. There were periods when people were very excited about how things were going and periods when people were less excited, even alarmed. What has changed in 2026 is that businesses have gotten used to it. I don’t think they’re necessarily happy or not stressed, but the incremental degree of stress this year relative to last is probably negative. A lot of the adjustment and shock is already behind us. Now it’s: "This is the environment we’re in. How do we adjust to it?" Regardless of whether business owners like what has happened, it’s not new anymore.

How are tariffs, high interest rates and the war in Iran affecting small businesses?

A lot of these things are negatively affecting their businesses. There are some businesses that benefit here and there, but there is a separate question of whether these problems are enough to offset good news elsewhere. Consumers, despite higher interest rates, are still spending. Have these things wrecked the small-business economy? The answer is no. Would small-business owners be happier, and would the small-business economy be healthier, if we didn’t have these headwinds? The answer is probably yes. Are things amazing and the best they possibly could be? Probably not. Have things gone totally off the rails? Absolutely not. People are managing to muddle through. There are extreme cases. Some businesses have essentially been forced to declare bankruptcy. There have also been businesses for whom these things are advantageous. If you are producing in an import-competing area and don’t rely on imported parts, this has actually been great for you. But in aggregate, it has been manageable. Business owners would probably say: “I’m sticking through it. Things aren’t so bad that I have to close up shop.”

What is happening with jobs? Are small businesses hiring or firing?

If you’re an employee, things have gotten a little better this year. I wouldn’t say they’re necessarily good, but they’re a little better. We’ve seen turnover pick up, which suggests workers are leaving some firms and employers are having a little trouble holding on to them. Employees of small businesses seem to be seeing more opportunities than they saw last year. From the perspective of businesses, hiring has not picked up. They may have been caught a little off guard by this turnaround. They are losing employees, but they haven’t managed to crank up hiring. And there has been a little shift in bargaining power at small businesses from owners to employees.

What is happening to wages?

Wage growth in our small-business data has been 6% over the past year. That is higher than the Bureau of Labor Statistics data, which is closer to 3.5% or 4%., so faster than overall inflation. There is a very strong K-shaped economy stuck in people’s minds. That may have been true a year and a half ago, but wage growth at the bottom is now comparable to or faster than wage growth at the top. Of course the businesses themselves may not be excited about this. Turnover was up about 4% year over year in July, and it was up even more in June. We’re not back to the Great Resignation. But if you think about a pendulum, for a while it was swinging toward business owners finding it easier to find talent. Now it has swung a little bit the other way.

How is the immigration crackdown affecting the labor market?

The immigration crackdown slows down both halves of the equation. It slows labor supply, because we’re adding fewer workers to the pool that can get jobs. But it also slows labor demand, because immigrants spend money. If you’re adding fewer of them, spending growth is going to slow down. The main story is the change from an environment where companies were seeing huge amounts of available labor coming onto the market to one where they don’t. If business suddenly picks up, companies could find themselves facing a labor shortage. There isn’t a huge overhang of available labor the way there was coming out of COVID or coming out of 2010.

Are more small businesses opening or closing?

Compared with the late 2010s, there is a lot more job creation and destruction happening through establishments opening and closing. In the past, much of the change came from an existing business cutting its workforce in half or increasing the number of employees it had. Now, more job creation is coming from businesses opening, and more job losses are coming from businesses shutting down. We simultaneously have relatively low hiring, low firing and low quitting. But the hiring and layoffs that do occur are coming more than in the past from new businesses or businesses that are dying.

What do small businesses need, and what happens if they don’t get it?

Businesses importing tariffed goods wish they weren’t tariffed. Businesses struggling with energy prices wish energy prices were lower. Businesses facing high interest rates wish interest rates would go down. Right now, the headwinds are manageable. Companies are adjusting and can keep going. The worry is the right-hand tail: What if all these problems become much bigger toward the end of the year? What if the energy crisis continues and intensifies? What if inflation becomes a bigger problem? Then, instead of saying, “I can manage” or “I can muddle through,” small businesses could really start struggling.

This transcript was edited and condensed for space and clarity.

—Peter S. Green

Big Businesses mentioned this week

$SPCX ( ▲ 2.05% ) $WBD ( ▼ 0.57% ) $PSKY ( ▲ 2.12% ) $ORCL ( ▼ 1.74% ) $AAPL ( ▲ 1.75% ) $NFLX ( ▲ 1.83% ) $GOOGL ( ▲ 1.77% ) $DIS ( ▲ 0.69% ) $ANTHZZX ( ▼ 0.89% ) $NYT ( ▲ 0.47% ) $DJT ( ▼ 1.37% ) $TKO ( ▲ 0.35% )

This week, big business!

Elon’s World
The Usual Suspects
The Short Stack
Trumplandia

Elon’s World

Space X’d? The big talk isn’t working any more. On Wednesday, SpaceX $SPCX ( ▲ 2.05% ) delivered its first-ever quarterly results as a public company, losing $541 million, despite nearly doubling revenue to $7.8 billion from a year earlier. One culprit: $18.4 billion in cap-ex for the quarter, or about a fifth of the $85.7 billion it raised in its June IPO. Pushing aside his CFO, Elon Musk told analysts and shareholders on a conference call that SpaceX is on track to spend $100 billion in cap-ex this year. But those major spending numbers and a lack of commensurate revenue only served to spook investors, Musk’s unsupported claim of $1 trillion in revenue by 2030 notwithstanding. Shares closed down about 13% on Wednesday after the announcement, their lowest ever. At $108, their value is half of its recent peak of over $220. David Wagner, a portfolio manager at Aptus Capital Advisors, politely explained why the shares tumbled. “Elon has continued to surprise investors on what innovation and technology can do, but there has always been a mismatch in terms of the time frame of when that execution is going to occur," he told Reuters. And that mismatch is about to get even bigger. Lockups expire this week for some early investors, who are expected to flood the market with shares, after making as much as 10x their money. Some 900 million shares of SpaceX are eligible to be sold, which could be worth close to $100 billion, more than the IPO’s $85.7 billion. The Wall Street Journal reports that some shady business means not everyone who thought they were holding pre-IPO stakes in SpaceX will cash out. Over 1,000 special purpose vehicles, or SPVs, hold SpaceX shares, a portal for investors to buy in before the IPO, but the SPVs are opaque and lightly regulated, and some dumped their SpaceX shares years ago.

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The Usual Suspects

Up (and up?) - What is up with the stock market? War, tariffs, inflation, AI displacement, $39 trillion national debt, energy crisis, stagnant employment. Despite it all, the U.S. stock market just keeps rising. The Dow peaked this week at 54,744 on Wednesday; the S&P 500hit 7,793 points, both records. The Nasdaq 100 hit 29,885 on Wednesday, just shy of its all-time record. Why? Most of it seems to be hope. Despite no ceasefire with Iran lasting more than a few days, investors see the latest hope of a reopening of the Strait of Hormuz as a sign the global economy will keep pumping away, and oil won’t get too pricey (it’s down from around $100 to about $80 a barrel in a week). Strong earnings from big tech helped, consumers keep shopping, companies keep investing in AI, Scott Bessent successfully propped up the Japanese yen (for now—see below…) and everyone can keep ignoring the national debt. Or maybe everyone’s just trying to grab what they can before the volcano blows?

The MountWarner Chronicles: Is David Ellison in hock for more than he can ever pay off? That’s the question going around Hollywood right now, after a judge set a trial date for March to assess claims of antitrust violations by a dozen state attorneys general in Ellison’s planned acquisition of Warner Bros. Discovery $WBD ( ▼ 0.57% ) by his own Paramount Skydance $PSKY ( ▲ 2.12% ) . The deal should have closed next month, and each quarter of delay will cost Ellison a $650 million payment to WBD shareholders. Paramount’s balance sheet is weak: a market cap of just $9.2 billion, assets of $44.5 billion, and debt of $15.5 billion, on a deal that will cost it about $81 billion ($111 billion including debt) and that’s largely financed by dad and some Middle Eastern investment funds. But Larry Ellison, the Oracle $ORCL ( ▼ 1.74% ) oligarch, has just seen his firm’s credit rating cut to BBB- by S&P, while Moody’s issued a negative outlook on massive AI data center spending with little evidence of a return so far. With the war in Iran ratcheting up the anxiety levels in the Gulf, that capital may not stick around if the trial drags on. Ellison took to the New York Times’s opinion page Wednesday, arguing that a Paramount Warner combo would only account for 13% of viewing time on U.S. TVs when stacked up against Apple $AAPL ( ▲ 1.75% ) , Netflix $NFLX ( ▲ 1.83% ) and even YouTube $GOOGL ( ▲ 1.77% ) , so the states (all 12 are blue) aren’t really suing over a coming monopoly. “The issue is whether I can be trusted as a steward of Warner’s CNN,” Ellison wrote. He says yes. But with all the debt and now a billion-dollar delay, another issue is whether he can be trusted as a steward of Paramount's business. Shares in Paramount are up more than 10% this week, even as the company missed its earnings target by nearly half, reporting 8 cents a share profit against SEG’s 15-cent prediction. Still, Paramount is down 25% since Ellison took over, and it’s 55% off a mid-September ‘25 peak.
Happy Days for Disney: Other studios and theme parks may be facing crunch time, but new CEO Josh D’Amaro seems to have found the glass slipper at Disney $DIS ( ▲ 0.69% ) : Revenue’s up 7%, and real profits are too, with theme parks and cruises seeing their visitor count rise by 10%, and Toy Story 5 raking in more than a billion dollars in global ticket sales this year. About 45% of that goes back to Disney, which spent about $250 million to make the animated film. (the latest Star Wars installment flopped, however, as did the live action Moana remake despite Dwayne “The Rock” Johnson wearing a wig to entertain people of all ages). But the good news keeps coming: Disney’s already sold out ads for next year’s Valentine’s Day Super Bowl, simulcast on ESPN and ABC, with some change coming to Disney’s cable business: It’s sold its half interest in A+E to Hearst for $1.2 billion, has partnered with TikTok to let TikTokers use Disney characters to create content and show some of it on Disney+, and plans to expand its FAST (free ad-supported television) as consumers increasingly cut the cord and agree to sit through commercials to get their kicks for free. Overall, earnings rose to $2.06 from $1.61 a year ago. Shares are up about 3% since Tuesday’s close.

The Short Stack

Cyberfatigue: Half of U.S. cybersecurity bosses say they’ve considered quitting the profession as AI agents like Anthropic’s $ANTHZZX ( ▼ 0.89% ) Mythos and other LLMs make their job impossible, according to a survey by Absolute Security, a company that provides cybersecurity tools. The report appears to be more than just a scare tactic to boost sales. It surveyed 1,000 CISOs in the U.S. and the U.K. Barely half of the CISOs (57%) say they trust AI tools to protect their data; 43% say the latest AI tools are too risky for their organizations to adopt, and 60% say their C-suites and boards are pressuring them to adopt AI faster than they can govern it and secure it.
Failing Times? The New York Times $NYT ( ▲ 0.47% ) said it added another 280,000 subscribers in the second quarter, making it the most widely-read news organization in the world, with 13.35 million subscribers. Revenue jumped 11.2% to $762.5 million in the quarter, and adjusted operating profit zoomed 16.1% to $155.3 million. Still, fears that subscriber growth may be slowing sent shares plunging 13% on Wednesday, which some analysts called an overreaction.
Fore-play? Troubled golf circuit LIV says it will be back for 2027, and beyond, after finding an investor who it said would “carry and fund” the tournament into next year. Bloomberg News identified the investor as the private credit arm of U.K. investment firm BC Partners. LIV, which plays several tournaments a year on golf courses owned by President Trump, recently lost its funding from Saudi Arabia's Public Investment Fund after $5 billion of losses. It will be interesting to see what kind of collateral LIV was able to post in exchange for the financing.
It takes money to lose money: Call it the crash-and-burn of the week: Leopold Aschenbrenner, the 24-year-old AI genius who left OpenAI to start his own hedge fund investing in AI-related stocks and pre-IPO companies was managing about $45 billion at the start of July, much of it from wealthy silicon valley types and their family offices. But investors got spooked by the recent downturn in AI stocks and the ongoing question of whether all that investment in data centers will actually bring in revenue. Redemptions gutted the fund, forcing Aschenbrenner to offload all his holdings in publicly traded companies to Ken Griffin’s Citadel as about $35 billion left the fund through redemptions and losses. Aschenbrenner was getting married the weekend the margin call came, and put off his honeymoon to liquidate. But you can’t keep a good man down. This week, Aschenbrenner put more than $500 million into an unnamed privately held company. “We took the steps that were necessary to fight another day,” Aschenbrenner told investors in a letter on Friday.

Trumplandia

Scott Bessent’s Yen for Intervention. There’s nothing a one-time forex trader in George Soros’ organization likes better than a currency crisis, where Masters of the Universe get to move vast amounts of cash to prop up or knock down other countries. In fact, Bessent reportedly made investors $1 billion betting against the yen in those days. Now, his job is defending the U.S. dollar. So when skyrocketing public debt began to undermine the Japanese yen, Bessent used a Covid-era finance tool to sell euros and prop up the yen. What’s this all about? Well, Japan has so much debt that if the yen kept falling against other currencies, Japan’s central bank would have to sell some of the U.S. Treasury bonds it holds. That would force the U.S. to offer higher interest rates on its bonds, and raise the cost of servicing the U.S.’s unprecedented debt mountain. But simply buying yen with dollars could reduce the dollar’s value. Bessent said Japan’s economy is strong and the yen is undervalued, adding that he’s ready to intervene again. Still, his record is a bit mixed: when he ran his own hedge fund in the teens and into the 20’s, erratic performance cost him 90% of the assets under management. And it’s not clear more intervention will fix the problem. “The yen is weak not because of speculators causing yen to be undervalued,” Robin Brooks of the Brookings institution told the New York Times. “The yen is weak and falling because Japan has so much public debt.”

The family business: The problem with lawsuits is that if you sue someone, they can respond and make public stuff you might not want them to say. Donald Trump made a big deal after his first term of being “de-banked” by some of the largest U.S. financial institutions, which he claimed had it in for him and other conservatives, and in 2025 he sued Capital One, the seventh-largest U.S. bank. Now CapOne has responded : “Documents and Plaintiffs’ own ‌allegations make clear that Capital One closed ‌Plaintiffs’ accounts for anti-money laundering (‘AML’) reasons,” the bank said in a court filing. “The closures were the result of months of analysis and a careful review by ‌Capital One’s AML team in accordance with bank policies and regulatory guidance.”
What’s Insider Trading? How would you like a split-second advantage in knowing what Donald Trump is going to tweet, er post, on his Truth Social platform? News of everything from air strikes on Iran to tariffs on Canada could make you millions if you’re the first to trade. Well, all ya gotta do is join the five Wall Street trading houses that are already paying $100,000 a month for the API (the “firehose feed”) of Truth Social. “This is insider trading by definition,” Gian Luca Clementi, an economics professor at NYU Stern School of Business, told Fortune. A spokeswoman for Trump Media & Technology Group $DJT ( ▼ 1.37% ) said the posts are already “publicly available information.” TMTG shares are down 40% in the past year.
There’s no such thing as bad publicity: TKO Group $TKO ( ▲ 0.35% ), the Ari Emanuel company that manages UFC fights, said it lost $30 million on the White House lawn battle it held June 14th for Trump’s birthday. Emanuel called the event “a roaring success” for TKO, regardkess, because of all the exposure it got.

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AI Chatbots Know More About You Than You Think

Cheddar's Big Business This Week — Thu, 30 Jul 2026 20:30:00 +0000

As the battle rages for control of artificial intelligence, it’s becoming increasingly apparent that AI models from ChatGPT to the bot on the plumbing supply store’s website know an awful lot about you. BBTW editor spoke with Ben Winters, director of AI and privacy at the Consumer Federation of America, to understand what AI companies collect, why they want it and what consumers can do to protect themselves.

What are AI companies collecting when we use a chatbot?

Any of the big AI companies that you are engaging with are collecting a few different layers of information. There’s no real way to know everything they are collecting. You can triangulate this based on what we know and can tell, what is said out loud, what people have been doing for years, and the literal representations that are made in the privacy policy. But all of those things end with some answer that is something like “pretty much anything.”

In practice, that means they’re obviously taking your input data—everything you put into the chat box. They are connecting any insights from that input data and any of the personal information or attributes you can glean from what that input data is. Sometimes that will be literally how they try to get people to upload financial information or health information.

What’s their goal?

The simplest answer with all data collection across the internet in any context is getting more data to sell better-targeted ads, so they are able to sell those ads at a higher rate because they have higher certainty that you will be clicking on them.

A lot of times with an AI chatbot, you might just be explicitly saying what you are looking for or what you’re worried about. So the answer is always ads. But it is also other things, especially in the chatbot context and really any generative AI context. If they want to improve their model, and you can only really improve your model with human normal sentences, then you have this unlimited series of human-written sentences from the humans that are using your product.

Why is this potentially more intrusive than Facebook or old-fashioned Google?

The generative AI version is a little bit less clear to people because it feels and looks like you’re having either a Google-like conversation—a sort of search-engine-adjacent way of using the web—or you think you are talking to your personal assistant. At least on Facebook, not everyone knew that everything was big data targeting all the time, but at least you knew that it was public-facing. People know more about data harvesting and privacy practices than they used to, but it’s still a fundamental difference in consumer expectation versus company practices.

Can chatbot companies shape what we believe or what we buy?

Chatbots are products that are designed by companies. They’re not things that have opinions on their own. There are explicit, obvious ways to have certain types of information not be shown.

It’s not very different than the way Google search traditionally has ranked search results. But it’s more nefarious because it is this one response and it feels authoritative. But it’s not.

So many of these AI companies have deals up and down the marketplace. You would imagine a lot of clients would probably get things like product recommendations, and those product recommendations are always going to be from Home Depot because you have a deal with Home Depot. There is an immense risk and opportunity for chatbot providers to put their thumbs on the scale about a company, about whether an investment or a purchase is good or not.

Are companies effectively building digital twins of us?

Yes, in the same way that ad-tech firms for advertising targeting make these lookalike audiences. They would take attributes and say, “This is a white guy in his 30s that lives in the Washington D.C. area and he likes basketball,” and whatever else it is.

You are able to make these segments that you can then either sell for completely innocuous reasons, or it could be what an administration uses to target a certain demographic and try to target misinformation efforts. All of those things are used for whatever people buy them for and whatever the companies sell them for.

Why offer these costly tools free or for $20 a month?

A lot of what they’re doing is trying to get market capture and buy-in, so that people are reliant on these systems. To be able to say, “All these people are using it, we have all this data,” then they’re able to get contracts with the Department of Defense and the State Department and with consulting firms. That’s where they’re making their money. The free consumer product is an extra funnel that makes for better PR and gets them more sources for ongoing use of that data.

What should policymakers do?

There’s definitely a question about the value, but it’s also a question about whether it’s just about compensation or if it’s really about consent and actual understanding of what’s happening. The most simple things are passing consumer privacy laws that apply for things that include but are not limited to chatbots. There are data-minimization requirements, that they can only collect data for the purpose of what you are using the AI tool for. There are restrictions about the way data is collected and how it can be used for training without express consent.

What can consumers do right now?

I am always hesitant to assign personal responsibility for data collection at scale. I think it’s more of a policy issue than an individual responsibility issue. But, people can use more privacy-protective versions of the products. There are DuckDuckGo chatbots that are not using your data or keeping your data or using it for advertising. And think twice about what you put into a chatbot. Don’t put anything into a chatbot that you really wouldn’t want anyone to see about you. There are leaks.

Are you optimistic consumers will regain some control?

It depends on the day you catch me. I am fairly optimistic because of how relatively quickly people have changed their minds from, “This is cool AI stuff,” to, “This is this extractive technology that’s making my Instagram feeds worse, and all these scams and all this stuff.” I think there will be some version of a regulatory framework, but it will be hard. I’m not optimistic that it is utopia—no extractive data companies or bad outcomes. I’m optimistic that something will get better.

This transcript was edited and condensed for space and clarity.

—Peter S. Green

Big Businesses mentioned this week

$PSKY ( ▲ 2.12% ) $WBD ( ▼ 0.57% ) $BA ( ▲ 2.76% ) $CBRL ( ▲ 0.08% ) $BLMN ( ▲ 0.23% ) $SBUX ( ▼ 0.48% ) $CVNA ( ▼ 1.59% ) $SPCX ( ▲ 2.05% ) $TSLA ( ▲ 0.52% ) $META ( ▲ 0.57% ) $MSFT ( ▲ 0.65% ) $NVDA ( ▼ 0.03% ) $OPEAZZX ( ▼ 0.2% ) $SFTBY ( ▲ 2.07% ) $ADDYY ( ▼ 0.18% )

This week, big business!

The Usual Suspects
Elon’s World
Tech Troubles
The Sporting News

The Usual Suspects

Paramount’s Waiting Game: The wait is on. David and Larry Ellison’s Paramount Skydance $PSKY ( ▲ 2.12% ) has agreed to an expensive time-out on its acquisition of Warner Bros. Discovery $WBD ( ▼ 0.57% ) , and urged a California court to move swiftly to a trial on accusations by 12 state attorneys general that the deal will destroy competition in film, TV and streaming. For every quarter Paramount can’t close the heavily leveraged $110 billion deal, originally planned for the end of September, Paramount owes WBD shareholders 25 cents a share or about $650 million. Paramount says the AGs have no idea what they’re talking about and are stuck in an outmoded understanding of how today’s media market functions. But California AG Rob Bonta, who’s leading the suit said combining the two media companies is bad for consumers: “When too few corporations have too much power in markets central to American life, it makes things more expensive.” A trial could start as early as November. Shares in Paramount are down 3% this week, and about 60% since a peak last September, shortly after the Ellisons paid $8 billion for the studio.
Boeing’s bind: Forget that Qatari 747 President Donald Trump left in England on his way back from a NATO summit earlier this month. The real Air Force One dilemma is the new series of AF1 planes that Boeing $BA ( ▲ 2.76% ) has been building for the White House for nearly a decade. They’re more than $2 billion over budget, and this week Boeing said it’s losing another $280 million on the $4 billion-plus project, with no assurances the planes will be delivered in time for America’s 48th president. That’s weighing down the firm’s results and slowing its turnaround under relatively new CEO Kelly Ortberg, who hits the two-year mark with the company next month. After a pair of crashes and a door blowout on its workhorse 737 Max planes, Boeing has been working to rebuild the confidence of regulators and clients. Now it’s adding a production line in Washington that will boost 737 production to 47 a year from 42, letting it chip away at a decade-long order backlog. But that’s left little money for designing a new plane to replace the 1960’s designed 700 series. Meanwhile Boeing faces competition from new planemaker, California-based JetZero, which is designing a wide-bodied 250-seat plane that looks like a manta ray, and just won $3 billion in loans and guarantees from the U.S. government’s Export-Import Bank. Keep your seatbelts fastened.
Ditching Grandpa has a price: Julie Masino, the parricidal CEO who took Grandpa and his rocking chair off Cracker Barrel’s $CBRL ( ▲ 0.08% ) logo last August, prompting conservative media to squawk about a “woke” makeover of the southern-style restaurant chain, has been shoved off the porch. She’ll be replaced as CEO by David Deno, former chief of Bloomin’ Brands $BLMN ( ▲ 0.23% ) , which owns Outback Steakhouse. Masino will get $4.6 million in severance. Deno gets $1 million a year in salary, plus stock and performance bonuses. Cracker Barrel shares are down 60% in the past five years, but they’ve more than doubled since March.

The Bux is Back: Starbucks $SBUX ( ▼ 0.48% ) CEO Brian Niccol’s revival plan appears to be working, as America’s biggest coffee chain saw its profit rise more than 90% in the fiscal third quarter to $1.05 billion from $558.3 million a year ago, with customers spending more at their local coffee bar, up 7.9% at stores open more than a year. Improving service, simplifying menus and workflows and redecorating its drab shops seem to be working. Shares were up about 4.5% in aftermarket trading Wednesday.

(Google)

Carvana profits rise, stock falls: Sometimes you don’t want a lot of cheerleaders. Online used-car giant Carvana $CVNA ( ▼ 1.59% ) did record-shattering business in the second quarter, selling 197,000 vehicles, a 40% increase over last year, and revenue up 52% and profit up 59%, for 10 consecutive quarters of growth. But after-market trading saw shares drop as much as 15%. That’s because Carvana projected total earnings below what some cheerleading analysts had predicted:$2.7 to $3 billion for the year, while some forecasts predicted $3 billion.
Fed’s Cred on the line: When Donald Trump appointed Kevin Warsh as Fed chair, he wanted one thing: Lower interest rates going into the 2026 midterm elections. That would keep consumers (ergo, voters) happy, jumpstart the housing market and cut the cost of servicing the debt caused by his signature tax cuts. But it hasn’t worked out so well for Warsh. He’s been unable to cut rates, as employment has remained stagnant and inflation is stubbornly far from its 2% target (3.5% in June, though down from 4.2% in May). It’s not entirely his fault, either. The War with Iran has hiked oil prices more than 70%, food prices keep rising, and then there are tariffs and their impacts on a host of prices. Warsh says he wants to issue less guidance and let the markets lead the Fed, but the markets are not happy. After Wednesday’s decision not to raise rates (three of the 12 committee members did vote for a hike), investors appear to be losing confidence in the Fed’s ability to keep inflation at bay, raising the interest rate they’re demanding on 30-year Treasury bills by 11 basis points, to 5.22%, the highest level since 2007. In plain English, that means bond buyers fear inflation will eat away at the value of their bonds so they want more dollars at the end of the day. “Warsh didn’t convey the message clearly or explicitly, and the bond market puked on him,” Fed watcher Jon Hilsenrath wrote in a note to clients cited by multiple media sources. Warsh says he has a plan to cut inflation, but he’s not sharing it for now. Instead, he wants to use a different measure for inflation. But consumers aren’t in the mood to wait. “Interest rates are an increasingly heavy burden on the economy,” Mark Zandi, chief economist at Moody’s Analytics wrote, noting that since the Iran War started, the rate on a standard 30-year mortgage has jumped to 6.8% from under 6%. That’s largely why new home sales fell to 628,000 in June, down 5.6% from last year. And consumers are increasingly worried about food prices, which have zoomed up since the pandemic and accelerated since. Even Warsh’s preferred inflation measure, the personal consumption expenditures price index, is no help. It was up even more: rising 4.1% in June.
Tariff Redux: Those tariffs that are whipsawing the economy are getting rougher. A bill now in Congress would let president Trump decide if he wants to impose tariffs up to 500% on imports from Russia and 100 percent on U.S. imports from countries that import lots of Russian oil and gas or help Russia evade sanctions. That’s a recipe for turmoil, says the U.S. Chamber of Commerce, which signed on to a letter urging Senate leaders to block the bill. “Tariffs of this scale would increase costs for everyday consumer goods, manufacturing inputs and other products while creating significant uncertainty for companies,” the letter said. The recent reductions in tariffs on Chinese-made goods, now down mostly to about 12.5%, means many Chinese firms are reshoring home after opening plants in other Asian countries, the New York Times reports. Meanwhile, The Trump Administration has added more tariffs to goods from Europe, Canada and Mexico, using a different rule than the one that was struck down by the Supreme Court earlier this year.

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Elon’s World

Still #1 but waaaay down. Remember when Elon Musk was worth more than a trillion dollars? Yep, I’m sure Elon does, too. But that was then, and now is now, and rockets don’t always all go up before they come down. That’s a long way of saying ”SpaceX? Sucker.” At Wednesday's close of $111, anyone who bought SpaceX $SPCX ( ▲ 2.05% ) shares at or after the IPO with its $135 price and the $160 a share start of trading, is a loser. Well, anyone that is who didn’t buy into SpaceX before it went public. Now according to Bloomberg’s billionaires list, Musk is only worth $700 billion. And that could fall. For the early investors to cash out, they’ll mostly need to sell their shares on the open market, and that may depress the SpaceX share price even further. And Tesla $TSLA ( ▲ 0.52% ) shares are down 18% in the past 10 days, and more than 40% since a late December peak. Markets are watching the Aug. 4 release of Tesla's second-quarter earnings, and August 6, when as much as 20% of SpaceX’s shares will be unlocked. That’s all made SpaceX one of Wall Street’s biggest short targets, with investors betting more than $26 billion ahead of its first earnings report and IPO lockup expiry.

Tech Troubles

It’s all about the Cloud. This time it’s about the cloud of uncertainty hanging over the future of the Great AI Buildout. In a sentence: Who’s gonna make money? Will this be a repeat of the browser wars or the telecom cable battle of the 90’s? Right now it’s unclear. Two of the biggest players in the AI world, Facebook parent Meta $META ( ▲ 0.57% ) and Microsoft $MSFT ( ▲ 0.65% ) reported earnings this week, and investors want to see some return on the hundreds of billions being invested in AI. Meta shares tanked nearly 11% as investors waited to hear how CEO Mark Zuckerberg planned to make money off of AI. He didn’t have an answer. Meanwhile, over at Microsoft, where revenue climbed 18% to $90 billion in the second quarter, as its Azure cloud service boomed and paid AI subscribers also increased, investors rewarded the company’s plan to sink hundreds of billions more into AI, sending shares up 17% on Thursday. “The core of [Meta’s] business is doing great. But because of the scale of the investment cycle, the market wants monetization data points beyond just the core business and they didn’t really get them,” Mark Mahaney, managing director at Evercore ISI told the Wall Street Journal. Fears that without sign of profits the buildout could stop, have revived the Great Circularity, with chipmaker Nvidia $NVDA ( ▼ 0.03% ) reportedly in talks to provide $250 billion in financing and guarantees to one of its biggest clients, OpenAI $OPEAZZX ( ▼ 0.2% ) , so that it can lease a 1-gigawatt data center in Ohio being developed by Softbank $SFTBY ( ▲ 2.07% ) .

The Sporting News

FIFA’s next big score? After raking in $15 billion in revenue from the 2026 World Cup (no clear word yet on profits), FIFA says it’s planning to grab another $4 billion in cash by placing its valuable broadcast rights, sponsorship, ticketing and licensing businesses into a new entity that would be worth $20 billion. Among prospective investors FIFA named are Joshua Kushner, the brother of Trump’s son-in-law, Jared. FIFA says the revenue would go to supporting its member organizations, and the move comes as FIFA President Gianni Infantini, the man who gave Donald Trump the only ever FIFA Peace Prize, is running for re-election next year. FIFA members have to approve the new venture, and the most powerful member, Europe’s soccer governing body UEFA, has given the plan a red card. “Fifa cannot continue to use our sport to enrich themselves and their friends,” the organization said in a statement, promising to boycott future World Cups if the deal goes ahead. Huge respect to Italy who took this stance a decade ago...Meanwhile, sport show powerhouse adidas $ADDYY ( ▼ 0.18% ) is hurting after spending nearly $250 million in marketing for the cup, only to find that every one of its competitors had also introduced an eye-catching pink or pink-cleated soccer shoe. (Turns out all the consumer surveys pointed in the same direction). Adidas missed profit expectations by about 8%, sending its shares down 16% on Thursday morning.
While Spain was trouncing Argentina, eyes in France were tuned to the country’s annual bicycle race, the three-and-a-half-week long Tour de France. Once again, Slovenia's Tadej Pogačar won, for the fifth time in a row. Ratings for the Tour are high: some 45.6 million French watched at least some of the tour on TV this year, up from 33 million in 2018. But the Amaury family of Paris, which owns the Tour, has no plans to share the $170 million in annual TV revenue, not even to promote the sport and ensure its continued survival, as the New York Times reports in a fascinating dive into a strange corner of the sports business world.
LIV is dead, long LIV the PGA: It looks like the hyper-expensive Saudi-funded PGA rival, LIV, has played its last rounds. LIV is cancelling the last championship of the season, which was set to be held at The Cardinal At St. John’s, near Detroit, where the combined purses totaled $40 million. The league paid lavishly for top golf talent, including Bryson DeChambeau and Jon Rahm, but in the four years since it teed off, it hasn’t grabbed the eyes of viewers, the purses of sponsors, or the handshakes of rival tours. The tournament is often played at courses owned by President Trump, and has a tournament set at his Bedminster club, so it’s a way for the Saudi Arabians to funnel money to the President. But the tournament was also a sand trap for Saudi Arabia’s Public Investment Fund, which poured more than $5 billion into the tournament before pulling the plug.

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The Fed Is Paralyzed, But Could Doing Nothing Be A Dangerous Move?

Cheddar's Big Business This Week — Thu, 23 Jul 2026 20:30:00 +0000

TODAY’S NEWSLETTER IS BROUGHT TO YOU BY:

The Federal Reserve’s Open Markets Committee meets next week, as pressure on the U.S. economy ramps up. Rising oil prices and new tariff threats would suggest the committee might raise interest rates. At the same time, stagnating employment and home sales suggest a rate cut by the committee could help the economy. Gah! It’s the perfect recipe for Fed paralysis. And yet doing nothing in this situation could also be a bad move.

To understand the competing pressures on the Fed, Big Business This Week editor Peter Green spoke with economist Rebecca Homkes, a lecturer at the London Business School.

Will we see a rate shift after next week’s meeting, and which way will it go?

That depends on several factors, but no move is most likely in the near term.

Why is that?

The Fed has a dual mandate: Maximum employment, or the highest level of employment or lowest level of unemployment that the economy can sustain in the context of price stability (benchmarked at 2%). When inflation heats up, central banks raise interest rates; this increases the cost of borrowing and makes purchases more expensive. The result should be a decrease in spending and thus a decrease in demand. As demand falls, given the basics of supply and demand, the prices of goods and services will fall, so inflation should lessen. The reason for inflation matters. If inflation is driven by demand shocks, for example, stock market wealth causes consumer spending to surge and there is more demand than supply then prices will rise. Central Banks can target this by increasing interest rates, which should slow spending until inflation tapers off. When prices are going up due to a supply shock, for example, supply chain disruptions post Covid or energy disruptions, then prices rise for companies and consumers. But supply shocks can cause reduced economic activity as higher costs lead firms to cut back on hiring or investment. If a central bank moves rates too much to counter inflation, this can worsen an already slowing economy. Occasionally this leads to stagflation, which is the disaster scenario when economic growth is slowing at the same time as spiking inflation. When the economy slows for other reasons, central bankers can reduce the rates to encourage more borrowing among banks. Banks should also pass on these lower rates, which would show up in business loans, autos, or mortgages. This should spur the economy – hopefully without spiking inflation.

What is the Fed looking at right now?

We have a U.S. economy that is stressed but not distressed, and the data is sending mixed signals. At the onset of 2026 both sides of the Fed’s dual mandate were moving in the wrong direction, albeit slowly. While stagflation fears have abated, we still show signs that the Fed will continue to do nothing: But in the current environment, doing nothing is doing something. The employment reports from the past few months have been steady but split: A few industries continue to hire strongly, a few industries continue to shed, and the rest remain flat. More than ‘low hire, no fire,’ we are seeing a lack of dynamism in the labor market. It’s hard to argue a few quarter points on the rate will shift a labor market that’s mostly in paralysis due to economic and geopolitical uncertainty, changing demographics, and technology shifts rather than lack of capital.

But inflation is slowing, isn’t it?

Inflation may be cooling, but since the latest report, the disruptions in the Middle East have changed the energy picture. The Fed will be watching core PCE closely (the Personal Consumption Expenditures price index—this is the measure of inflation the Fed watches; unlike CPI, or the Consumer Price Index, that measures the prices of a basket of goods, PCE measures what consumers actually buy), but the June data will be largely discounted given its lagging factor, and the July data will come too late for this meeting. A Fed governor can make a credible argument for a slight hike to get ahead of inflation or a slight cut to stimulate a rather stagnant job market, but both justifications demand looking into the nuanced storyline data rather than the topline headline numbers. Without a significant shift, staying steady is the most likely course of action for the Fed, especially in the July meeting where we have a longer gap between decision dates. Punchline: Expect a lot of debate but unless the data swings sharply, rates will remain where they are for the near term.

How are Trump-related factors like tariffs and oil price shifts related to the war in Iran affecting inflation, employment and rate cuts?

Chaos has a cost, and unfortunately this cost passes down to businesses and consumers. For the Fed, geopolitical tensions, policy uncertainty and supply-side shocks are the new normal, which means forecasting is more difficult and both sides of their mandate get affected. When uncertainty is the new certainty, the Fed’s mandate gets challenged. Uncertainty stifles growth directly and indirectly. Not knowing if there will be more tariffs or tensions causes paralysis in hiring. Businesses want to keep waiting until they know more. The challenge is that small rate cuts do not counteract the prevailing force of paralysis, so the Fed is limited unless they make more dramatic cuts. Deeper interest rate cuts to spur economic movement are dangerous in a world of tariffs and tensions, as these create supply-side shocks where fewer goods are meeting demand. This causes prices to increase, as we saw from tariffs and we are seeing now with disruptions to the energy market from the war in Iran.

So the tariffs are hurting the economy?

Tariffs are a tax, and someone needs to pay them. While individual companies can strategically reduce their chaos tax, the Fed has a more limited role in reducing the cost of chaos. Interest rates are a crude tool for a complicated world: They are not a miracle that can clean up the messiness of fiscal policies or years of economies muddling along. They are not uniformly effective, and why a cut or hike is warranted matters more than the percentage point of cut differential. As a tax, tariffs are a messy tool with limited effectiveness that only comes when applied in strategic and focused ways. Most of the administration’s latest announcements are not either, and many will not be fully enacted. But just the announcements can change consumer and business behavior, so they cannot be ignored. So far the Fed has signaled they are more concerned about the inflationary effect of uncertainty, which gives more argument to rates staying still for longer or even going back up.

How does this all tie in to what we are learning about the new Fed chair, Kevin Warsh?

Kevin Warsh’s first press conference made news more for the fact he signaled he did not want Fed governors making any news going forward than anything else he said. There was concern that Warsh would argue for dramatic rate cuts given his passion for the role of AI in stimulating the economy. How much AI and its technological gains will lead to a once in a generation productivity shift is highly debated. Economic theory suggests that if these productivity gains are to come, central bankers should be cutting now to avoid slowing the economic boom to come. AI and technological gains could also be inflationary, such as through higher energy prices from data center demand, constrained supply leading to higher pricing, or workers demanding more wages now in anticipation of future productivity gains. If it’s going to be inflationary, central banks should be increasing rates now to prevent inflation spiking too quickly. Economic theory also says productivity gains are less inflationary when they are a ‘surprise’, as workers do not demand higher wages now and consumers do not spend more now in anticipation of the future effects. AI isn’t a surprise, and so far we have limited data showing AI is boosting anything outside individual worker efficiency: Organization-wide productivity gains are still case studies, not trends.

What does this perspective mean for consumers with credit cards and mortgages?

Consumers and small businesses should not be hanging on for any gifts from lower interest rates in the near term unless tensions calm and prices cool even more, and the job market goes from shaky to shrinking. But if the job market shrinks, that would signal a worsening environment that an interest rate cut is taking you into.

This conversation was edited for length and clarity.

—Peter S. Green

(Polymarket)

Big Businesses mentioned this week

$GS ( ▲ 0.92% ) $PSKY ( ▲ 2.12% ) $WBD ( ▼ 0.57% ) $PYPL ( ▲ 0.77% ) $STRIZZX ( ▼ 0.47% ) $AAPL ( ▲ 1.75% ) $PYUSD ( ▼ 0.0% ) $DIS ( ▲ 0.69% ) $KHC ( ▲ 0.86% ) $ADDYY ( ▼ 0.18% ) $KALSZZX ( ▲ 0.13% ) $PLYRZZX ( ▲ 0.01% ) $NKE ( ▲ 0.49% ) $GOOG ( ▲ 1.53% ) $ANTHZZX ( ▼ 0.89% ) $SPCX ( ▲ 2.05% ) $BX ( ▲ 2.47% ) $UBER ( ▼ 1.23% ) $DASH ( ▲ 0.46% ) $OPEAZZX ( ▼ 0.2% )

This week, big business!

War Story
The Usual Suspects
Trumplandia

War Story

Oil is back to $100 a barrel. Missiles have a predictable and synchronized effect on the price of oil: When the missiles go up, the price of oil also goes up. This time, Houthi rebels in Yemen fired on a pair of Saudi tankers transiting from the Red Sea to the Indian Ocean. Fears that the Bab-al-Mandab strait will be unsafe for shipping sent oil prices soaring above $90 a barrel on Wednesday, and up to $100 on Thrusday. If the strait is closed, Saudi oil will have to go through the Suez Canal, adding time and cost to exports to Asia—and the largest tankers can’t fit. What’s the lesson to be drawn from all this? All that earlier hope of a “short war” with minimal economic impact is slamming into the escalating war talk from Washington and Tehran. Comments on Wednesday from President Trump threatening further violence against Iran, and a comment from Sec. of State Marco Rubio that Iran is “not serious” about peace talks, helped push up the prices. And despite some bright points, like U.S. insurers charging drillers lower premiums to hunt for U.S. oil, there are more negative signs than positive ones. Gasoline is back above $4 a gallon, averaging $4.09, up from $3.15 a year ago. More pressure is coming: European gas prices have doubled since the war began, raising concerns about how the continent will stay warm if the winter turns bitter, and countries across the world have begun rebuilding strategic reserves to buffer themselves from another oil shock. With all this going on, Goldman Sachs $GS ( ▲ 0.92% ) estimates that if the Strait of Hormuz remains closed (or even just sporadically open), oil could reach $120 a barrel.

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The Usual Suspects

Paramount Pause: A federal judge has temporary halted Paramount’s $PSKY ( ▲ 2.12% ) $111 billion buyout (with debt) of Warner Bros. Discovery $WBD ( ▼ 0.57% ) , while she reviews a suit by 12 stat attorneys general who have sued to block the deal, saying the combined company would have too much market power, particularly over film production and distribution, and too much debt to be able to carry through on its promises to regulators to keep making films. “Audiences on every sofa and in every movie seat would feel the impact of this unlawful merger,” California AG Rob Bonta said. After President Trump said the merger would make CNN, now owned by Warner, “normal”, MAGA podcaster Katie Miller, who’s married to THAT Stephen Miller, said the lawsuit was “to protect CNN for the Liberals.” Bonta said spinning off CNN would not be enough to halt the suit. Courts generally move slowly, and the clock is ticking on Paramount. For every quarter the closing is delayed past October 1, Paramount owes WBD $650 million. Paramount shares are down 15% since a late June bump.

Pay me More, Pal: Online payments site PayPal $PYPL ( ▲ 0.77% ) has reportedly rejected a $53 billion bid from B2B payment provider Stripe $STRIZZX ( ▼ 0.47% ) and PE firm Advent Capital (with Twitter founder Jack Dorsey), saying it believes the firm is worth more than that to would-be buyers. Grafting PayPal’s consumer-facing business onto Stripe’s, and adding in PayPal’s Venmo cash transfer service could create a payment system that would process more than $3.7 trillion a year, competing more easily with Apple Pay $AAPL ( ▲ 1.75% ) and Google Pay $GOOGL ( ▲ 1.77% ) . But the board thinks the company is worth more, Reuters reports. Part of the appeal may also be PayPal’s stablecoin, $PYUSD ( ▼ 0.0% ) . PayPal presents second quarter earnings on Tuesday. Strong results will likely drive a higher price, but weak results could force the board to accept the lowball offer. Shares in PayPal have fallen about 82% since their 2021 peak, and closed Wednesday at $55.51, well below the Stripe offer of $60.50.

Kicked out of the House of Mouse: New Disney $DIS ( ▲ 0.69% ) CEO Josh D’Amaro keeps on cutting. Now come more layoffs at units including Pixar, despite the outta-the-ballpark success of Toy Story 5, which has grossed more than $957 billion so far, globally. According to Hollywood journal The Wrap, D’Amaro is afraid Pixar’s films are too costly, even when they do make a profit. At Pixar, 114 jobs will be cut, with more cuts coming at ESPN. In another sign of changing times at the house of Mouse, Disney and troubled ketchup-maker Kraft-Heinz $KHC ( ▲ 0.86% ) have inked a deal that’s going to have Star Wars lightsabers dispensing exclusively Heinz ketchup at Disneyland. Under the agreement, Kraft-Heinz becomes the exclusive condiment, cream cheese, and mac ‘n’ cheese purveyor to Disney, and Disney will let the food company use its characters. The two will also “create content” together. Kraft-Heinz has seen sales decline for the past 10 quarters, and the Disney hookup is part of a broader offensive by new Kraft-Heinz CEO Steve Cahillane. No word yet on when Elsa Frozen popsicles will drop. Shares in Disney are down 45% in the past five years and down 16% in 2026. Perhaps it’s time the company bought some more IP. That’s usually how it bolsters its stock price over the medium term.

Football has been very, very good to FIFA: (And to Adidas $ADDYY ( ▼ 0.18% ) and Kalshi $KALSZZX ( ▲ 0.13% ) and Polymarket $PLYRZZX ( ▲ 0.01% ) and World Cup host cities, too). It may have been one of the most complained-about World Cups since the global soccer battle began in 1930, but it was also one of, if not the most profitable cups for both soccer’s governing body, FIFA, and for host cities, which largely relied on existing stadiums, hotels and transit systems to host the games. But FIFA found a million ways to make a buck (more than $15 billion, actually). Want to buy a ticket? Buy a FIFA cryptocoin first (total profit, $10 million), Want a ticket to the final? The cheapest top ring seats at the Meadowlands were priced at $2,790. But if you couldn’t make the game, you could resell your ticket on FIFA’s own resale site, which charged 15% commission to the buyer and another 15% to the seller. There are also 2,000 championship rings (an idea FIFA borrowed front he NFL), you can buy a square foot of turf from one of the FIFA stadiums for only $3,000 (FIFA expects to cash in about $11 million). Not a bad haul. While Spain walked away with the trophy, and some bruises from its final brawl with Argentina, other winners included the prediction market sites Kalshi and Polymarket, which together took bets worth at least $5.7 billion on the final. Adidas, which sponsors both Spain and Argentina, said it expected World Cup-related sales to top $1.7 billion, and its visibility is giving it an edge on top rival Nike $NKE ( ▲ 0.49% ) .

F is also a letter of the Alphabet: Google parent Alphabet $GOOG ( ▲ 1.53% ) has been a stock market darling for so long, it should get a grade of A for investability. But second-quarter results released on Wednesday sent shudders through the market and raised fears that this could be the first breach in the dike of debt holding up AI. While cloud revenue grew 82%, to $24.8 billion, which should have been great news, for the first time ever, capital spending (capex) exceeded free cash flow by $5.9 billion. That’s a major shift for Google, which used to generate so much cash it held regular share buybacks. Now, it’s issuing new shares and debt to build AI data centers. In Q2, Google raised $49.6 billion in equity and $20.3 billion in bonds just to fund AI infrastructure. And to beef up its credit rating, Alphabet booked $77 billion in anticipated revenue from the eventual sale of its Anthropic $ANTHZZX ( ▼ 0.89% ) stake. That’s not real money; it’s a bet on Anthropic’s IPO following the initially positive path of SpaceX’s $SPCX ( ▲ 2.05% ) (although the company is now trading at $115, below its IPO price of $135). In other words, Google is making a bet on AI that’s so big, it can’t afford for the bet to fail. Alphabet shares are down more than 8 percent in the past week, and were down considerably on Thursday. In a move sure to anger President Trump, Google was also fined $1 billion (890 million euros) on Thursday by the European Union for abusing its dominant market position in search to squeeze out rivals.

(@HedgieMarkets on X.com)

Jersey Mike’s IPO: Jersey Mike’s, the New Jersey-based sub sandwich chain that’s exploded from a single Point Pleasant joint to 3,300 franchised operations with the backing of private equity firm Blackstone $BX ( ▲ 2.47% ) , is going public. The IPO will value the company at nearly $8 billion, and let Blackstone cash out some of its initial investment. But Blackstone will still have a majority of the company and all those voting rights. And no, the shares don’t come with extra peppers.
Uber Uber Europe: It’s Uber’s Hero now. Safety-challenged ride-share company Uber $UBER ( ▼ 1.23% ) is expanding its lucrative food delivery service with the $14.8 billion purchase of Germany’s Delivery Hero. The acquisition will give Uber a footprint in 50 more countries across the globe. Delivery services are consolidating. Last year DoorDash $DASH ( ▲ 0.46% ) bought the U.K.’s Deliveroo for $3.86 billion. Shares in Uber are down 21% in the past year, but up about 3% on news it has a new Hero.
Going Rogue: Two OpenAI $OPEAZZX ( ▼ 0.2% ) models teamed up to escape their sandbox, get on the internet, and together hack a library of AI programming tools called “Hugging Face,” last week. If this sounds too sci-fi for you, it is unfortunately a taste of things to come, and it’s got cyber activists concerned. But the backstory is even crazier. The two models were being tested, and they inferred that the library of AI models could teach them to pass their test. OpenAI says it’s fixing things.

Trumplandia

Venezuela’s missing billions: And they happen to be in the U.S. Treasury. An investigation by the Financial Times turns up a financial mystery: Where has Venezuela’s oil income gone? The U.S. State Department said about $3 billion has gone to Venezuela to pay government salaries and other authorized expenses, and the U.S. has promised another $386 million in aid to recover from last month’s earthquake, which is likely to come from the oil revenue. But some $10 billion appears to still be stuck outside the country, and U.S. lawmakers say they haven’t received any of the promised quarterly reports on the cash. When President Trump seized Venezuelan leader Nicolas Maduro in January, he promised to sell the oil at market price and ensure the funds were spent to benefit the Venezuelan people.

Just in case you’re keeping score: President Trump has threatened tariffs on generic drugs (mostly made in India with Chinese ingredients) that would come into effect and raise drug prices for consumers after the end of his second term. He’s also threatened 50% tariffs on everything in Canada, apparently because smoke from Canadian wildfires has been drifting over the US.

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How AI-Driven Attrition is Quietly Reshaping the Workforce

Cheddar's Big Business This Week — Thu, 16 Jul 2026 20:30:00 +0000

Every month, investors pore over the U.S. jobs report looking for clues about the labor market. But what if the biggest AI-driven employment trend doesn’t show up in the data until it's already happened? Big Business This Week editor Peter Green spoke with Bradley Taylor, CEO of headcount forecasting firm Clearcast, who argues that companies are increasingly reducing employment through attrition rather than headline-grabbing layoffs. By analyzing millions of job postings and company data, Clearcast believes it has identified a pattern of "quiet restructuring" that could provide an early warning of AI-driven workforce reductions.

Peter Green: How can you tell that AI-related layoffs are coming?

Bradley Taylor: We identified four signals that, taken together, make us feel confident something is going on. We don't have insider knowledge about specific layoffs, and we're not trading against these businesses. But when you combine these signals, the pattern becomes compelling.

The first is companies with at least 20 technology mentions in their job postings, mentioning Salesforce, Microsoft, Workday and so on. That tells us they have a baseline level of technological sophistication to deploy AI. Second, their headcount has been flat over the previous 12 months. They aren't growing their workforce. Among companies showing those two characteristics, we then look for businesses projected to decline by at least 5% in headcount over the coming year. Finally, we look for leadership departures and transformational hires such as a Chief AI Officer.

If you're an employee, those are the things to watch. Are positions simply not being refilled? Are leaders leaving without replacements? Has the company hired someone to oversee AI strategy? Those signs suggest the business may not announce a formal layoff but could instead slowly reduce its workforce over time.

So this isn't necessarily about firing people. It's about deciding not to replace them.

Exactly. The question becomes, "Do we really need to rehire that role? Why can't we use Claude or another AI tool to do that job?" Ultimately, companies want to grow revenue with fewer people. Can the position be replaced with AI? Can we do more with less? If the answer is yes, then they may continue serving customers without adding headcount.

One of your indicators is companies with at least 20 software mentions. What does that actually measure?

We analyze millions of job postings using AI and identify which software platforms companies mention. If a posting asks for experience with Workday, UKG or Ceridian, for example, we can infer which technologies the company uses. The point isn't that they're trying to connect all those systems with AI. It's more basic. Do they have enough technology in place to make AI deployment possible? Twenty software mentions by themselves may not mean anything. But when you combine that with flat hiring, projected headcount declines and leadership changes, you begin to see a meaningful correlation.

Clearcast's core business is forecasting company headcount. How do you make those predictions?

That's exactly what our company was built to do. We use proprietary machine learning models trained on job postings, news articles, firmographic information, Census Bureau data, public filings and many other inputs. We've back-tested the models over roughly 15 years. We started with public companies because their SEC filings disclose employee counts, allowing us to compare our predictions with what actually happened. Our original goal wasn't AI. It was helping companies understand whether their customers would grow or shrink. If your revenue depends on charging per employee, knowing whether your customers are adding workers or losing them becomes critically important. As AI layoffs started making headlines, we realized our forecasting tools could also identify signals before those announcements occurred.

Why aren’t these trends obvious in the monthly jobs report?

The jobs report is backward-looking. It tells you how many jobs were added last month. What we're trying to identify are the signals that suggest companies may reduce headcount in the future. We're seeing just under 10,000 companies showing the early signs of what we call quiet restructuring. These are often large businesses with thousands of employees. If enough of them stop replacing workers and gradually reduce staff through attrition, those changes won't necessarily appear as major layoff announcements. That's why we're trying to make people aware that there's activity beyond the handful of widely publicized AI layoffs in the technology sector.

Should workers be worried?

I think people should pay attention. A company doesn't have to announce that it eliminated 8,000 jobs. Someone quits, and the company simply doesn't replace that person. Another employee leaves, and AI absorbs part of the workload. Over time, that's a meaningful reduction in employment without a dramatic headline. That's really what this pattern illustrates. Businesses aren't necessarily getting rid of people all at once. They're doing more with less, allowing natural attrition to shrink the workforce. The next step for us is quantifying what that could mean nationally if this pattern continues. But the important point today is that there are early signals people can watch. More data is becoming available, and we don't always have to wait until after the fact to understand what's happening.

—Peter S. Green

Big Businesses mentioned this week

$PYPL ( ▲ 0.77% ) $XYZ ( ▲ 0.18% ) $AAPL ( ▲ 1.75% ) $GOOGL ( ▲ 1.77% ) $IBM ( ▲ 3.96% ) $PSKY ( ▲ 2.12% ) $WBD ( ▼ 0.57% ) $SPCX ( ▲ 2.05% ) $GOOG ( ▲ 1.53% ) $SKHY ( ▲ 0.94% ) $GS ( ▲ 0.92% ) $MS ( ▲ 0.81% ) $C ( ▲ 0.23% ) $JPM ( ▲ 0.76% ) $BAC ( ▲ 0.21% ) $WFC ( ▲ 0.94% ) $OPEAZZX ( ▼ 0.2% ) $META ( ▲ 0.57% ) $F ( ▲ 0.65% ) $LCID ( ▲ 0.96% ) $RIVN ( ▼ 0.13% ) $TM ( ▲ 2.97% ) $VLKAY ( ▼ 0.99% ) $BRK.A ( ▲ 0.63% ) $CMG ( ▲ 0.19% ) $SBUX ( ▼ 0.48% ) $DIS ( ▲ 0.69% )

This week, big business!

War Story
The Usual Suspects
Tech Trauma
Car Talk
The Short Stack
Elon’s World

War Story

China’s Rising Dominance in a Volatile Oil Market: Move over, OPEC. The real decision maker now for global oil markets is China. China stocked up last year, when it saw the war coming, and it’s been drastically cutting its reliance on imported oil going back years, with massive solar electrification projects, hydroelectric dams and even the revival of some coal-powered power plants. In fact, China cut so much of its oil use this year, that it effectively kept global oil prices from rising. “China effectively operates more market power [over oil prices] than any nation on earth, including Saudi Arabia and the U.S.,” Eurasia Group analyst Gregory Brew told The New York Times. But there’s a flip side to the inventory issue. Most countries have few reserves left to pull from. Even the U.S. strategic reserve is wearing thin — its equipment is aging, and the salt caverns that store the oil are leaking. “What cushioned the initial blow this time is that energy markets had room to maneuver and absorb it,” the IMF said in a blog post. But if the Strait is closed again, “that room is now smaller and shrinking further.” The first three months of war took 1.1 billion barrels of crude off the market, or enough to run the world for 10 days. With forecasts for global growth shrinking over the war, the Fund said “A quick supply recovery is essential to avoid further damage to the global economy.” And prices show no sign of coming down: When Trump briefly announced he’d close the Strait a few days ago, oil futures jumped 10%. Brent Crude is up more than 12% this month to $81 a barrel, that’s nearly a third more than it was before the war began, whcih is money coming out of consumers’ pockets. And if you wanted further proof that, as former U.S. Marine Corps Gen. Smedley Butler said in his book of the same name, “War is a racket,” Iranian negotiators tell Drop Site News that they’ve calculated that alleged market manipulation by people with advance access to Trump’s statements on the war have made $9 billion in profits, and Iran wants half of that money.

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The Usual Suspects

PayPal payday? Shareholders in PayPal $PYPL ( ▲ 0.77% ) saw their holdings rise 16% on Wednesday after closely held payments rival Stripe and PE firm Advent International, together with Twitter founder Jack Dorsey’s payment firm Block $XYZ ( ▲ 0.18% ) , are offering $53 billion to take over the online payments firm. The three are reportedly offering $60.50 a share, a 28% premium to PayPal’s closing price on Tuesday. So why didn’t the stock jump right up to the offer price? Despite a 40% drop in market value in the year before the advent of the Stripe/Advent offer, as PayPal struggles against Apple Pay $AAPL ( ▲ 1.75% ) and Google Pay $GOOGL ( ▲ 1.77% ) , investors feel they’re being low-balled. In April, 2021, PayPal peaked at $296 a share. It no longer has the market share it had then, but in the right hands it’s worth more. Stripe can merge PayPal and use it and Venmo (which PayPal bought in 2013) to boost its own business and push its crypto payment offers onto PayPal’s 400 million users. Together, the two firms would create the world’s largest payment system outside China, processing $3.7 trillion in payments. TD Cowen analyst Bryan Bergin told Reuters that a purchase would give Stripe "direct consumer relationships, with a large user base and the potential for ‌future financial-services distribution, ⁠which PayPal has recently increased its efforts on.” That leaves the company with three paths and three possible takeover prices based on whether it can generate more, according to analysts: $50-$65 in its current state, with current management, $65-$75 in the hands of a financial investor, but $75-$90 for a strategic investor like Stripe that can easily grow the business.

IBM’s Big Blues: It was a blue Tuesday for IBM $IBM ( ▲ 3.96% ) , the Dow stalwart known as Big Blue. A profit warning noting that its customers where shifting spending from IBM’s software and mainframe infrastructure to AI hardware and memory chips, a business that the U.S. computing and consulting giant has been largely absent from, sent its shares plummeting more than 25% (they were down 27% at midday Thursday). Demand dropped even for IBM’s z17 mainframe, designed for AI. “Markets are going to punish legacy players showing signs of losing ground in the AI race,” Emarketer analyst Jacob Bourne wrote in a note to clients Tuesday. IBM has been a favorite of TV business pundits, with Jim Cramer saying this month that “it’s got AI and it's a great computer company at 22x. I think this one works."
WBD/Paramount trouble: Nepo-mogul David Ellison must be channeling Michael Corleone right now: Just when he thought he’d won anti-trust approval from the SEC, state attorney generals suede to block the debt-addled acquisition by Ellison’s Paramount $PSKY ( ▲ 2.12% ) of Warner Bros. Discovery $WBD ( ▼ 0.57% ) . A group of 12 states including California and New York sued to block the $111 billion merger, arguing the deal would harm movie theaters and give the combined company too much power over distributing basic cable channels, like CNN. “The likely result is higher prices, lower quality and less content for film,” the states said in their lawsuit. That lawsuit may be tough to win, largely because Paramount, even combined with WBD just isn’t that big a player in movies or cable. “The states are going to have a difficult time establishing that the disappearance of a relatively insignificant player will have the wide-ranging ramifications they allege,” said Reuben Miller, head of antitrust at Dealreporter. Even if the deal goes through, the enlarged Paramount faces a huge debt challenge: With a total $79 billion in debt, it will have a 4.3x net debt to EBITDA ratio, and Paramount already has a junk rating from Fitch. Ellison still says he’ll achieve $6 billion in “synergies,” bring the debt rationdown to 3x, and turn out more movies, and profits. Paramount shares are down more than 10% in the past month and 50% in the past year. WBD shares have more than doubled since the deal was announced.

Magic Markets: Clock another blockbuster quarter for big banks, as the business of business leads to record profits. All those mega-share sales (SpaceX $SPCX ( ▲ 2.05% ) Alphabet $GOOG ( ▲ 1.53% ) , SK Hynix $SKHY ( ▲ 0.94% ) ) are a big boost to the bottom line, as Wall Street reports its earnings: Goldman Sachs $GS ( ▲ 0.92% ) , profits up 78% over last year, share price up 7.2%, Morgan Stanley $MS ( ▲ 0.81% ) profits up 58%, shares up 0.4%, Citigroup $C ( ▲ 0.23% ) profits up 45%, shares down 4.2%, JPMorgan Chase $JPM ( ▲ 0.76% ) profits up 41%, shares up 3%; Bank of America $BAC ( ▲ 0.21% ) profits up 26%, shares up 2%; Wells Fargo $WFC ( ▲ 0.94% ) profits up 17%, shares fell 4.4%. So what’s up? Why the disconnect between profits and share hikes (except for Goldman?). For one thing, bank shares have been largely climbing over the past quarter, so profit expectations were already baked in, but the banks also reported growing expenses and what JPMorgan Chase CEO Jamie Dimon warned are “tectonic” risks, “including geopolitical tensions and wars, sticky inflation, large global fiscal deficits and elevated asset prices.” The other fear: Too many new issues, overwhelming the market’s ability to absorb them with fresh cash. That’s what helped lead to the 1999-2000 dotcom crash, in fact. Magic markets, indeed.

Tech Trauma

Does Apple’s OpenAI suit fit? Lagging in thh AI race and facing a looming threat to the iPhone’s global supremacy from OpenAI’s chat GPT, Apple $AAPL ( ▲ 1.75% ) filed a lawsuit last Friday alleging OpenAI $OPEAZZX ( ▼ 0.2% ) stole Apple trade secrets when it hired a cadre of top Apple product engineers. OpenAi is reportedly developing a line of hardware devices, and reports say its first device will be a screenless speaker “companion” that uses ChatGPT. Altman posted on X that he’s “not afraid of Apple.” In 2010, Apple sued a raft of smartphone makers alleging theft of its IP. The suits dragged on until 2018. Shares in Apople are up 9.4% in the past month.
Meta’s AI layoffs. Another month another Meta $META ( ▲ 0.57% ) AI misstep. Remember Galactica (it generated fake research papers); BlendBot3 (it generated fake election claims); the Fake AI profiles; or the Ai characters that led to chatbots’ improper relations with children? Well a group of fired employees are now alleging in a Federal suit that Meta used AI to determine its latest round of 8,000 employees, about 10% of its workforce, in May. They say the company used internal AI tools to target employees by productivity and use of AI tokens. The problem is that the tool ended up targeting employees on medical or parental leave. Allegedly, that’s discrimination. Meta denies the claims.

Car Talk

Detroit’s China Syndrome: There’s a specter haunting Detroit and its the specter of China’s EV success, Ford’s $F ( ▲ 0.65% ) executive chairman, Bill Ford, warned this week, even as Congress considers a bi-partisan bill banning Chinese cars. “We can’t expect to keep them out forever, and we have to be able to beat them at their own game,” said Ford. Ford is preparing the paunch of a $30,000 EV pickup to win over Americans, but the Trump Administration has cut EV subsidies and backed off emissions rules that helped EVs gain ground. That’s slammed local EV makers like Lucid $LCID ( ▲ 0.96% ) and Rivian $RIVN ( ▼ 0.13% ) , both of which are losing money and have seen their share prices tank. Lucid shares fell as much as 40% Tuesday, before closing down 16%. Shaking off rumors of bankruptcy, Lucid said this week its hiring a turnaround adviser. That hasn’t stopped BYD whose head of international operations told the FT that it can overtake Toyota $TM ( ▲ 2.97% ) , the world’s largest carmaker with 10.5 million cars sold last year, within five years, even if it’s shut out of the U.S. BYD claimed sales of 4.5 million vehicles last year. That may come back to haunt U.S. car makers. Last year one in four vehicles dold globallyy was battery-powered, and China makes 74% of them. The U.S. only makes 5%, and after scrapping dozens of EV models after the Trump rule changes—and writing off more than $50 billion in EV development costs—it may never be able to catch up, even as EVs overtake internal combustion engines.
The hurt is overseas as well. Volkswagen Group $VLKAY ( ▼ 0.99% ) plans to cut another 50,000 jobs, after 50,000 it already initiated in 2024. CEO Oliver Bume said VW’s production costs are 20% above the industry average, and that the European carmarket is oversaturated with “un-needed” cars. He said VW will have to cut its production by a fourth, from 12, million to 9 million a year across its stable of brands. VW shares are down about 30% this year, but up 5% since Blume’s announcement. He’s facing stiff opposition from unions, which have a seat on the firm’s supervisory board.

The Short Stack

Buffet’s Gates Diss: Every year since 2006, Berkshire Hathaway $BRK.A ( ▲ 0.63% ) founder Warren Buffett gives away millions of dollars in shares to the Bill and Melinda Gates Foundation, which works on issues including ending malaria. But not this year. In March, Buffett said he hadn’t spoken to his one-time pal “since the whole thing” of Gates’ ties to Trump pal and convicted sex trafficker Jeffrey Epstein was revealed.
Forget Coals and Newcastle: Chipotle $CMG ( ▲ 0.19% ) is bringing its tacos, burritos and bowls to Mexico. Mexico? Yep. The company is betting it will be the chic option. “The difference would lie in the bowls,” analyst Sharon Zackfia of William Blair told the New York Times. If similar efforts are any guide the going is gonna be tough: Starbucks $SBUX ( ▼ 0.48% ) has only 50 shops in Italy, mostly in trendy tourist spots, out of about 152,000 bars and cafes in the country. And it’s been forced to lower its price — and cut extra charges for oat milk and other specialties- to keep up with the locals.
Disney’s Moana Moan. How Moana is too much Moana? Three films, it seems. Disney’s $DIS ( ▲ 0.69% ) live-action pic of Moana, coming just two years after the release of its animated Moana 2, is shaping up to be a box office splat. Starring the real life Rock (Dwayne Johnson, who voices demi-god Maui in the animated versions), it took in about $95 million worldwide in its first weekend, a weak start for a film that cost $250 million to make and $100 million to publicize. The shaky start raises questions about Disney’s plan to add live-action versions to its other animated successes. That said, shares in Disney are up a little under 2% this week.

Elon’s World

Rockets go down, too. Where will the invisible hand of the market grab Space X shares as they fall back to Earth? The gigantic metal chopsticks work on SpaceX rockets, but there doesn’t seem to be an equivalent to protect the company’s shareholders. SpaceX shares briefly fell below their IPO price of $135 on Wednesday before recovering to just $135.27. Shares peaked at $220 days after the IPO. That’s got Wall Street traders betting against the company, even as sell-side analysts predict a glowing future for the rocket firm. SpaceX short interest rose to 181 million shares this week, or 28% of its tradable float, while the unrealized gains for short sellers have already hit some $3.88 billion, according to data compiled by S3 partners. Besides expectations of growth coming back down to earth, the big pressure on SpaceX is the forthcoming expiration of a series of lockups that have kept early private investors from selling their shares on the public market. “The largest IPO in history is also shaping up to be the largest exit liquidity operation in history,” investor George Nobel wrote on X this week. That may be because the early investors are happy to walk away with 10x or 20x their initial investment and invest now in the next big idea. Or it may be because they don’t see a business there at the valuation now on the table, so they are taking their money and running. So what is there to SpaceX? As Nobel says, “rip away the science fiction and the only business inside SpaceX that reliably earns money is Starlink, which produced $1.2 billion of operating income last quarter. A wonderful business worth hundreds of billions on its best day. NOT $2 trillion,” he wrote. “Serious fair value work lands around $30 a share. Yikes!

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Markets Shrug as Iran War Resumes

Cheddar's Big Business This Week — Thu, 09 Jul 2026 21:19:58 +0000

TODAY’S NEWSLETTER IS BROUGHT TO YOU BY:

The bombs are back! With Donald Trump and the Iranian Mullahs tearing up their fragile, short-lived Memorandum of (mis)Understanding and resuming their highly combustible game of tit-for-tat, you might expect global markets to be in full-blown panic. After all, the U.S. military just launched fresh strikes on Iran to keep the Strait of Hormuz open, hitting some 90 military targets, which promptly triggered Iranian retaliatory strikes on U.S. bases in Kuwait, Bahrain, and Qatar. Trump declared on Wednesday that the ceasefire is officially "over," while calling Iranian leaders "liars" and "sick people.”

Yet, if you look at the actual financial charts, Wall Street and global investors are responding with little more than a collective, synchronized shrug. Instead of sky-rocketing through the stratosphere, crude oil prices are bobbing up and down a little bit. In the span of just five days, oil prices bounced from $68 to $75 and slid right back down to $71. Yes, that is higher than the $60 baseline before the bombing started, and drivers are feeling the pinch with gasoline averaging $3.85 a gallon (up from $3.16 a year ago). But overall, the market's reaction suggests that the financial world has developed a thick skin.

(Google)

So, who is actually making money in this chaotic "new normal?”

While traders, refiners, and oil majors are doing just fine, the real surprise is the resilience of consumer-facing big businesses. Delta Air Lines, $DAL ( ▲ 2.13% ) which reports its highly anticipated earnings this Friday, is up an astonishing 25% year-to-date, nearly tripling the return of the S&P 500. Even with jet fuel prices remaining stubbornly high, about a third higher than pre-war levels, airlines are making a killing thanks to warm weather and relentless consumer demand. Consumers, it seems, would rather fly through a geopolitical storm than cancel their vacation plans.

Over in Singapore, institutional heavyweights are urging everyone to take a deep breath. Rohit Sipahimalani, Chief Investment Officer of the state-owned investor Temasek, noted at the Reuters NEXT conference: "There are always tail risks and it's likely that the path to resolution will not be a straight line." But from a market perspective, he insisted, "the worst is behind us, peak uncertainty is behind us, and outside some really 'tail' outcomes... this is not going to be a key driver of the market."

Rather than fleeing for safety, savvy long-term investors are treating the volatility like a boutique clearance sale. Clara Chan, CEO of the Hong Kong Investment Corporation (HKIC), explained that "the fact that there is some market volatility, there will be some change in valuation and for a long-term investor like us with staying power, those could be (the) perfect window to buy." HKIC also remains laser-focused on sustainable investments.

Indeed, what some investors have called the "largest energy shock in history" is fast-tracking the global green transition. Thailand, which usually imports energy to the tune of 8% of its GDP, is turning this crisis into a major economic catalyst. Vice Finance Minister Santitarn Sathirathai remarked at the summit that the war is actually driving a "new growth engine" centered on green industries, noting: "A lot of the green economy, whether it's new energy vehicles, solar panels and related industries, those are areas where Thailand already has some capabilities and we can build a lot more upon that."

Geopolitics may be as explosive as ever, but big business, oil markets, and global capital appear to have learned to shrug off the fire.

—Peter S. Green

Big Businesses mentioned this week

$DAL ( ▲ 2.13% ) $SPCX ( ▲ 2.05% ) $MU ( ▼ 0.22% ) $AMD ( ▲ 2.49% ) $INTC ( ▲ 2.61% ) $NVDA ( ▼ 0.03% ) $SOXX ( ▲ 1.86% ) $SOXQ ( ▲ 1.78% ) $DRAM ( ▲ 0.92% ) $SJM ( ▲ 0.06% ) $META ( ▲ 0.57% ) $AMZN ( ▲ 1.94% ) $ANTHZZX ( ▼ 0.89% ) $MSFT ( ▲ 0.65% ) $TM ( ▲ 2.97% ) $GM ( ▼ 0.58% ) $RIVN ( ▼ 0.13% ) $TSLA ( ▲ 0.52% )

This week, big business!

The Usual Suspects
Tech Talk
Car Talk
Trumplandia

The Usual Suspects

The Chip Dip: It looks like chip stocks are falling off the old auction block. Amid investor fears that AI firms can’t keep buying more chips until they have some revenue to show for all their spending, and hedge funds and other early investors deciding to sell to lock in their gains (what Wall Street likes to call profit-taking), it’s been a bad few weeks for the companies making processing and memory chips. The big disappointment is Samsung, which reported a second-quarter operating profit of about $58 billion, nearly 20x its profit a year earlier, but its shares fell 7% after the announcement, as investors expected even greater growth to come. On Monday, another Korean chipmaker, SK Hynix, opened a U.S. share sale aiming to raise $28 billion, the second-largest new share sale on record after SpaceX’s $SPCX ( ▲ 2.05% ) $86 billion June IPO. Micron $MU ( ▼ 0.22% ) dropped 12% in the past five days, while AMD $AMD ( ▲ 2.49% ) dropped 6%. Intel $INTC ( ▲ 2.61% ) dropped 9% on Tuesday alone. Nvidia $NVDA ( ▼ 0.03% ) , the poster child for the chip boom, is actually up more than 4% in the past five days, but it’s down more than 2% in the past month. The sector ETFs give a hint of how widespread the trouble is. $SOXX ( ▲ 1.86% ) , the iShares Semiconductor ETF is down 14% since a peak on June 22, and the PHLX Semiconductor Sector $SOXQ ( ▲ 1.78% ) is down 8.3% in the past five days. Memory chips took it particularly hard. The Roundhill Memory ETF $DRAM ( ▲ 0.92% ) , is down 8% in the past five days. Then again, in the looking-glass world of the U.S. stock markets, where few companies are valued as ongoing businesses, the winds could change tomorrow. Indeed, by the time we went to press, many of these stocks had recovered many of their earlier losses. “Expectations have gotten to ⁠be almost impossible to beat for these companies,” Zachary Hill, head of portfolio management at Horizon Investments told the Globe & Mail.

(Google)

SpaceX Splashdown: Adding Elon’s Spaceship/AI/Satellite/Mobile phone company to the Nasdaq-100 index was supposed to buoy both SpaceX’s $SPCX ( ▲ 2.05% ) newly public shares, and the Nasdaq’s quest for ever greater heights. After pricing the IPO at $135, shares opened for trading at $150. They’ve now fallen below that, closing Wednesday at $148.30, a 35% drop from their mid-June intraday peak of $225. So what happened to the expected Nasdaq boost? Well, the index has about $40 trillion worth of stock, and despite the large size of SpaceX’s $68 billion IPO, the total number of tradeable shares is only worth about $100 billion, and the Nasdaq chiefs gave that a triple weight, so its total oomph is about 0.75% of the index. The math is fun: With $600 billion in assets indexed to the Nasdaq, that’s only about $4.5 billion of SpaceX stock that index funds need to buy. Not much of a boost there, either.
Private Equity and the Boston Celtics: Winning isn’t everything, profits are. Legendary Packers’ coach Vince Lombardi would have been shocked, shocked. The fiercely competitive Lombardi liked to tell his team that “Winning isn’t everything, it’s the only thing.” But that’s not how the private equity owners of the Boston Celtics, one of the most storied, and winningest, teams in pro basketball, see it. Last week they announced they were trading away cornerstone player Jaylen Brown, the 29-year-old guard and forward, after 10 years with the team, for an aging 34-year old and some draft picks. The sports world consensus is that without Brown, the Celtics have less chance of repeating their 2024 NBA championship win. So why trade him? Salary. Brown was the NBA’s highest-paid player in 2023, and he is still owed more than $180 million over the next three seasons. That may make up 35% of the Celtics salary cap, but it seems the bigger lesson is that paying Brown that kind of money extends the payback timeline for the private equity limited partners who financed owner Bill Chisholm’s $6 billion purchase of the team after the 2024 championship.
Twinkie’s multi-billion-dollar turmoil: It turns out that Hostess Twinkies will not survive nuclear armageddon, or even a rocket journey to Mars. And the actual shelf life of a Twinkie, about 65 days, has cost its new owner several billion dollars. J.M. Smucker $SJM ( ▲ 0.06% ), the jam and dog food maker that bought Twinkie parent Hostess for $5 billion in 2024, found that Hostess’s products don't fit neatly into Smucker’s own distribution network, where products, including jams, coffee and dog food, last on shelves for a year or more. Puzzling that through and tossing out the alleged synergies of the purchase have cost Smucker’s three impairment charges, totaling almost $3 billion, the Wall Street Journal reports, and forced it to hand two board seats to activist investor Elliott Investment Management. Shares in Smucker's have fallen about 14% since the purchase.

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Tech Talk

Here’s looking at you, Zuck. Meta $META ( ▲ 0.57% ) is introducing new AI glasses that would continuously record everything you hear and see, feed it back to Meta’s servers, and use the data to train Meta’s laggard AI LLMs. As Zuck recently told investors, the glasses aim to be your “personal agent.” According to the Financial Times, many of the same features can already be accessed with a software upgrade to Meta’s existing Ray-Bans. But the new glasses are likely to face challenges from government and civil liberties groups that see them more as secret agents than personal agents. Last month, Wired magazine found code for a facial recognition system embedded in Meta’s smart glasses platform. The company then removed the system. It says.

Speaking of surveillance: Ali Baba, the Amazon $AMZN ( ▲ 1.94% ) of China, is one of several Chinese AI firms that U.S. tech companies have accused of pirating U.S. AI systems. In a letter to Senators Tim Scott and Elizabeth Warren, Anthropic $ANTHZZX ( ▼ 0.89% ) charged that Chinese firms are creating hundreds of accounts on Anthropic, then using those accounts to crib Anthropic’s tech and replicate it. “These distillation attacks are carried out illicitly, systematically and at industrial scale to harvest U.S. A.I. capabilities across frontier labs and repackage them as their own,” Anthropic told the two senators, referring to companies on the frontier of A.I. development. Distilling has been a problem for U.S. AI companies for several years, and it’s beginning to cost them their edge. OpenAI said China’s DeepSeek was built by distilling OpenAI, and xAI $SPCX ( ▲ 2.05% ) founder Elon Musk conceded in court that his firm had “partly” distilled OpenAI work as well. But it’s not clear yet if courts would find distilling illegal,
Ali Baba may be regretting that decision, but not for legal reasons: Reporting only $1.4 billion in AI revenue in the first quarter, alongside a planned $55 billion Ai hardware buildout through 2027, the Chinese firm is struggling to generate profits from AI.
Ex-Box? XBOX, the video game platform that brings in about 6% of Microsoft’s $MSFT ( ▲ 0.65% ) revenue, is about to have a lot fewer employees and a lot more ex-employees. Some 2,850 Xbox workers will be laid off by the end of 2027, part of 4,800 firings at the tech giant, as it refocuses on AI. It’s not really clear how AI will fill the closed roles, but XBOX CEO Asha Sharma told employees that its teams were 40% larger than they were a generation ago, but “the player base and playtime have declined.” Sharma also plans to shutter or sell off some of the game design studios it acquired. No word yet on the $69 billion purchase of Activision Blizzard, the maker of Candy Crush and Line of Duty (you do understand the connection there, right?). But it’s lost 64 cents for every dollar its invested in the studios. Microsoft CEO Satya Nadella explained the challenge: “We have to turn this into a sustainable business,” he said on a tech podcast.

Car Talk

Toyota's border hop: Japanese carmaker Toyota $TM ( ▲ 2.97% ) , says it will move the Mexican plant that makes its mid-size Tacoma pickup to the U.S border town of San Antonio, Texas. Toyota expects to spend $3.6 billion on the move, creating 2,000 new jobs and boosting production from 200,000 pickups a year to 350,000 by 2030. Toyota said it will continue to make cars at the Mexico plant near Tijuana. The move to Texas comes six years after Toyota announced it was moving Tacoma production to Mexico. Toyota is close to outselling General Motors $GM ( ▼ 0.58% ) to become the biggest car brand in the U.S. Sales rose 0.5% through the end of June from a year earlier, to 1.24 million vehicles, as GM reported a 6.8% sales drop, to 1.34 million. Toyota has been investing in hybrids, while GM’s turn to EVs has faltered.

Rivian shares rattled by stock sale: Rivian $RIVN ( ▼ 0.13% ) , the U.S. EV maker that’must have thought it was on to a good thing when it aimed to raise about $1.5 billion with a share sale on Monday, following a 19% jump in its share price last week, and an 8.1% zoom on Monday. But after the share sale was announced, Rivian’s stock price fell 18%. Oops. Rivian has been struggling to compete with Tesla $TSLA ( ▲ 0.52% ) , and the one place it’s matched its rival is by also never turning a profit. Since its debut in 2021 at $130 a share, Rivian has lost 87% of its value, closing Wednesday at $16.66, costing shareholders about $85 billion. Still, things have been good for CEO Robert Scaringe, who made $402.6 million last year, or 4,458 times the company’s median employee pay.

Trumplandia

Are we measuring inflation the right way? Probably not. With headline inflation numbers taking the economy ever further from the Fed’s 2%-ish target, thus pushing off, seemingly forever, the prospect of a rate cut. But maybe we don't really know what we’re talking about. That’s the gist of several conversations among economists and econometricians right now. And it carries big implications for the Trump Economy, the war on Iran, the Holy Grail of a rate cut, and the November mid-term elections. Here’s a short version, which BBTW will return to when we finish reading the stacks of academic papers and untangling the blue lines and the red lines (and the pink lines and yellow lines) on several hundred pages of charts. But the gist is that using inflation to measure the health of the economy is a fraught notion. Simply gauging the effect of real-world activity on a consumer’s bank account means different things at different times. So energy prices shoot up for a few months, then collapse back down. Is that real inflation, or just momentary turbulence? Does a spike in the price of one item matter? Sure, beef has gone from $4 a pound to nearly $7 since 2020, but it represents about 0.64% of the average U.S. consumer's budget, so it may seem expensive, but it’s hardly moving the needle. Gasoline is 3% to 4%, so that hurts more. Housing is 30-35% of the average household budget, so that’s where the pain really comes in. So, with oil prices bumping around right now, what does that mean for real inflation? As a first step, the Bureau of Economic Analysis, part of the Commerce Dept., is reworking how it tabulates inflation, and should start using the new method next year (and backdating its data to 2021 for comparison). But the long and the short of it is that for now, inflation remains high, whether things like energy, steak or medical costs are driving it up, and a look at the most recently released minutes of the Fed’s Open Market Committee, the first chaired by Kevin Warsh, shows the chances of a rate cut are essentially zero for the rest of this year.
(Google)

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Ask A Nobel Prize Winner: Can AI Save the American Dream?

Cheddar's Big Business This Week — Thu, 02 Jul 2026 20:30:00 +0000

Simon Johnson, the MIT economist and Nobel laureate, has spent much of his career studying how institutions shape prosperity — and how societies lose it when those institutions fail. At a moment when AI investment is booming, tariffs are back at the center of U.S. economic policy, investor protections are being rolled back, and many Americans feel locked out of the economy’s gains, Johnson sees both danger and possibility. Big Business This Week columnist Peter Green spoke with him to discuss what the future of the U.S. economy looks like. He says it is being held up in part by the AI boom, but whether that boom leads to broader prosperity or a deeper ‘K-shaped economy’ depends on choices that are still being made.

Are we at an inflection point for the global economy and the postwar model of growth?

I think there's pressure, obviously, on the system globally, including the role of trade, and there's also pressure on institutions, including in the U.S., so I think we’re facing a big stress test for institutions. At the same time, we're having a boom around investment in AI, which is keeping the U.S. economy going, and which is also raising questions about what's the future of jobs, with people increasingly concerned about their job and their children's prospects. So it's a moment of considerable uncertainty, but there is upside potential.

I don't want to sound too negative but I think there's some very positive things that can happen. At MIT, we have a research group focused on what we call pro-worker AI, asking; Can we get developments of AI that would actually raise wages and share prosperity better? Because that could actually help deal with the polarization of the job market that's been with us for decades now, and that is part of the angst and the anger that many people feel, even in rich countries.

People now talk about a K-shaped economy, where the top keeps pulling away while the middle and bottom fall behind. Is shared prosperity at risk?

It's been in jeopardy for some time. Within labor, highly skilled, highly educated people have done much better over the past four decades than people without much education, and the middle has become squeezed by various forces pretty consistently over those decades. The K-shaped economy is not new. The worry now is that AI and related developments may further intensify it. But there are choices to make, including policy choices, that could put us on a different path.

What would put us on a different path?

The main thing is that the way technology develops needs to increase the demand for human expertise rather than de-skilling jobs. If you get mostly automation, meaning you replace people with machines, then there will be downward pressure on wages, and then CEOs will do extremely well. If you have upward pressure on wages because there's a bigger demand for human expertise to build things and to create new things, and that could be AI-powered or empowered, then workers will do much better. I mean, CEOs may also do well, by the way, in that scenario. I think, though, you're quite right that right now it's the divergence of fortunes that grabs your attention and that is very salient. So if the workers can do better and real wages can rise across the board, including for people who didn't go to college and finish college, that would be a big change.

We are also seeing political expressions of frustration, from Trump voters in 2016 to younger voters in the Blue-state cities like New York angry about debt, housing, and affordability. How do you read that?

Certainly political expression of frustration is increasing. But don't you think that Donald Trump's election in 2016 was also an expression, maybe not by exactly the same demographic? A lot of people feel like they've been left behind. And I agree with your assessment of what's happened in New York, and I think the frustration levels there are very high, but they're shared across quite a few other groups. It's the frustration of the K-shape and feeling that prosperity is not being shared. That's the key frustration. And that's common across multiple groups.

So what else needs to change? It can’t just be AI making jobs better.

Technology. You can change the degree of redistribution, you can support people at different parts of their life cycle and so on. You can change the tax system, reduce the tax on labor, for example, relative to machines. There are other policies and potential levers available, but the technology piece is driving it, and you mustn’t neglect that.

What happens when institutions meant to protect investors and consumers are weakened?

What's happening at the SEC is worrying. The protection of investors is important, and to the extent that's being weakened, that's a problem. Consumer protection for financial services, like the Consumer Financial Protection Bureau being gutted is also a big problem. Those sort of core investor and consumer protections are very important for shared prosperity and productivity growth. But, you know, allowing people to understand and need to be reminded that the stock market involves a high degree of risk, and allowing people to participate in that is not by itself a bad thing if they understand the risks, if they can afford losses, and so on. If they are duped into thinking it's easy money or one-way bets, that's a problem. I don't think you want to be too draconian in excluding people from trying to make money or trying to benefit from the volatility, but you do need robust investor protection. That is absolutely for sure. Without that, many bad things can happen.

And without those institutions, prosperity gets shared among ever-fewer people, I suppose?

Yes, absolutely. Investor protections, requiring transparency, that is the core of the SEC mission. Integrity of markets, that's a Commodity Futures Trading Commission mission. Making sure consumers are not taken advantage of in basic financial services like banking, that's the CFPB. We've never said that you shouldn't be allowed to gamble or you shouldn't be allowed to go to Las Vegas, if that's what you want to do. Of course there are issues of addiction and irresponsibility and so on, but those need to be confronted at an individual level. You want risk-taking, you want entrepreneurs, you want them to be able to raise capital, and you want people to be able to invest in new ventures, “little tech,” as one of my friends called it, the up-and-coming next technologies. That's just a real strength of the American economy.

What happens if the U.S. doesn’t restore a sense of shared prosperity?

If there's a breakdown in investor protections, I think you could have a lot of trouble in the stock market and more broadly. And that would be undermining productivity growth and overall prosperity. The shared prosperity is separate but related: If we don't re-establish that there's a rising tide that lifts all boats, then you would expect—and we have seen it in other countries—broader political backlash, a lot of populism of a not very constructive variety. And that can undermine your overall growth. It's not a new situation, [but] it is becoming more precarious. And what happens with AI, I think, is going to potentially tip the balance one way or another.

You said AI will be a transformative force, but investors and analysts are questioning whether there is a business case for the trillions going into AI.

It's like railways in the 19th century. There was clearly a business case for building railways. They transformed the country. They helped improve many people's lives, not everybody, but many people. But there were periods of overinvestment and periods when the valuations of those stocks were exuberant, overly exuberant. So that is a bit of an American feature. We like to invest. We like to build new things, and we do tend to get carried away. So where are we in that cycle? It's hard to say. The technology, AI, will end up changing the world, but is profit going to accrue? That's the nature of risk, you see. And what you want is people, investors willing to understand risk and willing to undertake investments given that risk. And if they manage their portfolios in the right way, they will benefit over time. But there could be losses along the way, and people need to understand that.

(This interview has been edited and condensed for clarity.)

—Peter S. Green

Big Businesses mentioned this week

$AAL ( ▲ 1.25% ) $BA ( ▲ 2.76% ) $CALM ( ▲ 0.37% ) $CHTR ( ▲ 3.71% ) $CMCSA ( ▲ 0.12% ) $COXCF ( 0.0% ) $CRWV ( ▼ 0.15% ) $DAL ( ▲ 2.13% ) $DJI ( 0.0% ) $DLAKY ( ▼ 0.45% ) $DYNA ( 0.0% ) $EADSY ( ▲ 1.8% ) $FOXA ( ▲ 1.17% ) $GOOG ( ▲ 1.53% ) $JBS ( ▼ 0.24% ) $JPM ( ▲ 0.76% ) $META ( ▲ 0.57% ) $MSFT ( ▲ 0.65% ) $NASDAQ ( 0.0% ) $NBIS ( ▼ 1.56% ) $OPEAZZX ( ▼ 0.2% ) $PSKY ( ▲ 2.12% ) $SPCX ( ▲ 2.05% ) $TSN ( ▲ 0.99% ) $UAL ( ▲ 3.13% ) $WBD ( ▼ 0.57% ) $WLFI ( ▼ 3.61% )

This week, big business!

War Story
The Usual Suspects
Tech Talk
The Short Stack

War Story

Strait outta Hormuz: The Saudis are filling up tankers, some ships are passing through Hormuz, Oman says it wants to join Iran in charging ships to pass through the international waterway (that’s against the Law of the Sea, which is backed by a bunch of international treaties that both have signed), and most importantly, the price of oil is down, with Brent crude trading at about $71.50 a barrel, about where it was before the bombing began on Feb. 28. But gasoline is still hovering around $3 a gallon, up a third from before the war, and prices are likely to climb again as countries rebuild their strategic reserves. More price pressure could come this winter, as Gulf states struggle to rebuild their war-wrecked oil and gas infrastructure, but that doesn’t mean more new oilfields will start pumping. “People are not going to start drilling in the U.S. because oil goes above $80 for a few weeks,” said Andrejka Bernatova, said Andrejka Bernatova, Chairman and CEO of $DNMX Dynamix Corporation III, an energy investing platform.. “It’s going to take a sustained price at $80 or above for new production to take place.”

One Shark Missed Billions… Another Saw This Coming

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Kevin Harrington invested early.

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The Usual Suspects

Comcastaways: Every few years, big media and entertainment companies get bored and decide to shake thighs up to boost their share price. Well, after watching David Zaslav wipe 70% off the market cap of Warner Bros. Discovery $WBD ( ▼ 0.57% ) , and Shari Redstone wipe $17 billion - also about 70%, off the value of Paramount $PSKY ( ▲ 2.12% ) , only to be saved by nepomogul David Ellison and the deep pockets of his dad (and Oracle founder) Larry, it looks like Comcast $CMCSA ( ▲ 0.12% ) CEO Brian Roberts is heading down the same path. After failing to win the bidding for Warner, Comcast is spinning off its NBC Universal broadcast and programming unit from its core cable and telecom business just months after NBC had its own re-org, hiving the MSNBC and CNBC gabfests into a new company called Versant (no, it’s not a new alcohol-free bubbly wine). The news pushed Comcast stock up 4% on Monday, and raised the specter of a new round of media mergers. This may be good news for shareholders, who saw Comcast’s P/E ratio below that of nearly every other stock in the S&P 500. “Comcast now sheds its conglomerate discount and each company can adopt a capital structure appropriate for the times,” analyst Craig Moffett of MoffettNathanson wrote in a note to clients on Monday. It will take a while for the mechanics of the deal to close, but expect the media dealmaking chatter to begin. Already this year Charter Communications $CHTR ( ▲ 3.71% ) and Cox Communications $COXCF ( 0.0% ) are tying up a $34.5 billion merger, and Fox $FOXA ( ▲ 1.17% ) just bought Roku. Shares in Comcast are down nearly 30% in the past year.

Paramount’s European Adventure (UK and EU) - the Paramount - Warner merger appears to have jumped one of the few remaining hurdles to its completion, offering some so-far unknown concessions to meet EU anti-trust and public access rules. But the EU is still examining whether the financing from Saudi and Qatari sovereign wealth funds amount to a foreign subsidy for the deal, worth $110 billion including assumed debt. The combined Paramount/Warner would be an entertainment powerhouse, uniting HBO, CNN, CBS, Paramount Pictures and Warner Bros studios. But a couple of sticking points remain. California Attorney general Rob Bonta is reportedly considering blocking the deal unless Paramount spins off CNN, and British culture minister Lisa Nandy said she is "minded to intervene” in the deal, which is Britspeak for seriously considering an investigation. That would add another 40 days to the timetable.
Take it lying down? Many of the world’s top airlines are flying empty luxury seats because their new configurations haven't yet passed strict U.S. safety tests. The rules affect airliners from both Boeing $BA ( ▲ 2.76% ) and Airbus $EADSY ( ▲ 1.8% ) and airlines including Lufthansa $DLAKY ( ▼ 0.45% ) Delta $DAL ( ▲ 2.13% ) , United $UAL ( ▲ 3.13% ) , American $AAL ( ▲ 1.25% ) and KLM. The problem is that new offers, like locked cabins and lay-flat seats, can affect the way the human body reacts to a crash or inflight turbulence, or even how quickly passengers can evacuate a plane. The testing can take years, and some airlines are now pulling out the new seats and putting back old-fashioned first-class recliners.

Dimon’s endgame: Is this the end of the road for Jamie Dimon, the tough-talking, f-bomb throwing, 70-year old CEO and chairman of JPMorgan Chase $JPM ( ▲ 0.76% ) ? The bank has named two senior bankers co-presidents, and given them each a $30 million retention bonus. Doug Petno and Troy Rohrbaugh appear to be jousting to see who follows Dimon’s 20-year run as the bank’s supremo. Previous top contender Marianne Lake, 56, said she’s leaving the bank. Not so fast, though. The new appointments will need time to be tested in their new roles, and the Wall Street Journal said people close to Dimon expect him to stick around for three more years, and then continue to kibbitz from his seat as executive chairman. JPM shares are down almost 3% since the announcement.

Tech Talk

If you can’t beat ‘em, grease ‘em. Following on reports that OpenAI $OPEAZZX ( ▼ 0.2% ) is postponing its IPO to next year, after SpaceX $SPCX ( ▲ 2.05% ) sucked all the cash out of the market, CEO Sam Altman has come up with novel idea for getting the federal government to buy in to his company’s plans to dominate the world of AI: Give the government 5% of the company. The Financial Times reports that Altman’s in talks with the feds, including Treasury Sec. Scott Bessent and Commerce chief Howard Lutnick to use the stake to fund a sovereign wealth fund for Americans affected by AI job displacement. The plan would require OpenAI’s competitors, including Anthropic, Google $GOOG ( ▲ 1.53% ) , Meta $META ( ▲ 0.57% ) , and Microsoft $MSFT ( ▲ 0.65% ) , to also hand over stakes to the feds, but none of them have signed on. Altman seems to be on the same page as Senator Bernie Sanders, who last month pledged to introduce legislation for a one-off tax of 50% on the stock of the largest AI companies. Sanders said the tax would create a $7 trillion fund generating hundreds of billions of dollars a year in direct payments to Americans and to health care, education and housing programs. “The benefits cannot simply go to the handful of wealthy corporations. They will be shared by the American people,” Sanders told the AP.
Meta’s compute pop (and fall): How do you make $160 billion in a single day? Rename your overhang as excess inventory. That’s what Meta $META ( ▲ 0.57% ) did this week when it announced it was creating a cloud computing business to sell its excess AI compute power to other businesses. Suddenly, it went from overbuilding data processing capacity to entering a growing business. That caused the stock to pop nearly 9% on Wednesday. But the numbers tell a slightly different story: Meta said it will spend $145 billion in capex this year, constructing data centers and buying GPU chips to train AI models. The cloud business reassured some shareholders that Meta might not lose so much on its AI buildout. Meta’s also already signed $47 billion worth of computing leases with data center builders Coreweave $CRWV ( ▼ 0.15% ) and Nebius $NBIS ( ▼ 1.56% ) , whose shares plunged 12% on Meta’s announcement that it was about to compete with them. So what’s it really about? Zuck seems to have taken a page from Elon’s playbook, when SpaceX $SPCX ( ▲ 2.05% ) announced it was leasing Colossus capacity to Anthropic and Google $GOOG ( ▲ 1.53% ) : If you overbuild and don’t have the demand (or even a decent AI to run), you can reduce your losses by renting out all that surplus inventory. If anyone else wants it. Then Zuckerberg told employees that AI agent development hasn’t accelerated as expected, and the stock fell around 5%.

The Short Stack

Steak and Eggs: With the U.S. beef herd at its smallest since 1951, farmers are finally getting decent prices for their cattle. But meat packers say they are hurting, losing about $300 per head. Worried about the small and medium-sized packers that slaughter and slice only about 15% of U.S. beef, the Dept. of Agriculture is promising them as much as $500 million in payments to keep working.The move comes as the Big Four U.S. packers, Brazil’s JBS $JBS ( ▼ 0.24% ) , Tyson Foods $TSN ( ▲ 0.99% ) , Cargill, and Brazilian-owned National Beef stand accused by ranchers of price-fixing to keep down the price of cattle, as beef prices hit all-time highs. Meanwhile, the feds have proposed a settlement to the Great Egg Price Fixing Scandal of 2022-2025, when three of the largest U.S. egg producers Cal-Maine $CALM ( ▲ 0.37% ) , Versova, and Hickman's Egg Ranch co-ordinated by phone and text message to inflate prices on the Egg Clearinghouse spot market. Under the settlement, the three will pay a total of $3.3 million in fines and donate 50 million eggs to food banks.
Why not you? More than 440,000 Americans became millionaires this year, or about 1,200 every day, according to a new report from Swiss bank UBS. Most of that was due to stock market gains (the Dow $DJI ( ▲ 0.98% ) rose 13.4% in 2025, and the Nasdaq Composite $NASDAQ ( 0.0% ) rose 20.36%). On average, the American adult was worth $696,277 at the end of last year, just behind Switzerland. The U.S. now has 23.6 million millionaires. Felling rich? Don’t max out your credit cards just yet. The Fed’s tri-annual household survey says the median income for Americans was only $192,700 in 2022. That’s because a few outliers (We’re looking at you, Elon) can skew the average. The next Fed survey results will be out this fall.

Trumplandia

Donald makes book, and JD makes book on books: Sometimes, it’s not friends in high places that you need, it’s simply being in high places. President Trump’s financial disclosure forms released this week show he made at least $2.2 billion in 2025, up from $622 million in 2024. The main source of all that money? Crypto deals. Trump’s holding in World Liberty Financial $WLFI ( ▼ 3.61% ) , founded by the son of Commerce Sec. Howard Lutnick, earned Trump $799 million, and the sale of those Trump memecoins? $636 million. If you held on to your Trump coin, it’s down 96% since it peaked in January 2025. Memberships and meals at Mar-a-Lago earned him $77 million, up $27 million from a year earlier. Coming in next year’s disclosure: The president’s income from a tungsten mining deal in Kazakhstan, which Trump personally approved. The U.S. government offered up to $1.6 billion to finance the deal. Who won the contract? A firm in which Don Jr. and Eric Trump, and Lutnick sons Brandon and Kyle, have an interest. (In fact, the New York Times found 14 mining companies, with some $8.9 billion of federal contracts or guarantees in which the Trump or Lutnick scions have an interest). Twitter commentators have been having a field day with the numbers:

But even a step down the ladder, there’s money to be made. Vice President JD Vance has his cash spread among standard ETFs, and a stake of $250,000 - $500,000 in bitcoin, some venture capital investments, and between $1 and $5 million in royalties from his controversial memoir “Hillbilly Elegy.” He was a self-confessed “never Trumper” when he wrote and sold the book as a student at Yale Law School, and even considered voting for Hillary Clinton out of distaste for his future boss.
What Will Kevin Do? The June job numbers out this week won’t help the Fed with a rate cut argument. At 57,000 new jobs, the count was underwhelming and only half the 113,000 the Fed had expected. Even after revising the May number down to 129,000 new jobs from a first guess of 172,000, and seeing participation drop to 61.5%, its lowest since 2021, unemployment is at a sustainable 4.2%. “The labor market may be stable, but it exhibits a high degree of job growth concentration,” said EY Parthenon chief economist Greg Daco. The worst news in June was the leisure and hospitality sector losing 61,000 jobs, the largest decline since the pandemic, with weak seasonal hiring, despite the the World Cup. “The labor market is stuck in second gear,” Daco added, with labor demand remaining “selective” amid “substantial negative shocks to labor supply from demographics and net migration.” That leaves the Fed focused on fighting inflation. And where’s inflation? Last month’s 4.2% annual number is already dropping, and once oil prices hold steady at pre-Iran War levels, it will likely sink back to about 2.5%, as the economy simultaneously absorbs the full shock of last year’s tariffs, says Claudia Sahm, chief economist at New Century Advisers. In other words, “Nothing in this report would lead us to change our long-standing view that the Fed will remain on hold in 2026,” said EY’s Daco. So why are markets still nervous and why are yields on T-bills staying high? Maybe because Warsh’s new policy of issuing far less guidance than Jerome Powell or other Fed chiefs leaves little to work with. Does Warsh still think the Fed should cut rates because productivity will rescue us from inflation, as he told Congress (and Donald Trump) before his confirmation? “It is one thing to reduce the amount of communication and quite another to leave the markets completely in the dark about your reaction function,” says Ethan Harris. a former Fed Economist and current Fed watcher. Polymarket traders now overwhelmingly expect no more rate cuts in 2026.

(Polymarket)

More tariffs? Remember that US-Mexico-Canada Trade deal which replaced NAFTA? The one negotiated by Trump, who called it “the largest, fairest, most balanced, and modern trade agreement ever achieved?” Well, now Trump trade negotiator Jamieson Greer, says the U.S wants to scrap it. The accord was supposed to be renewed this year for 16 more years, but Grier says it can stay in place while talks continue on its “shortcomings” and U.S. trade deficits with its neighbors are resolved. Otherwise, the accord gets ripped up. That’s bad news for trade, and particularly for U.S. carmakers who’d worked NAFTA into their production but now pay tariffs on parts and assemblies that cross borders.
And there’s that pesky trade agreement with Europe - the one that the EU just approved. Now President Trump is threatening to slap 100% tariffs on any European nation that taxes U.S. tech giants. How serious is he? Well the U.K. has been taxing U.S. tech firms including Google $GOOGL ( ▲ 1.77% ) and Meta $META ( ▲ 0.57% ) for several years now, and so far, Trump hasn’t put any new tariffs on them.

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Making Sense of Market Volatility In A Turbulent Week

Cheddar's Big Business This Week — Thu, 25 Jun 2026 20:30:00 +0000

TODAY’S NEWSLETTER IS BROUGHT TO YOU BY:

What the heck, Wall Street? Was there a tech sell-off this week? Perhaps?! Who knows?!

Through Thursday afternoon, some tech shares had dropped, with the Magnificent Seven tech stocks down a collective 6%, the Nasdaq down 4% and the S&P 500 down 2%. But the Dow was up 1%, and given the volatility of all markets these days, trading on everything from the price of oil to the whims of president Trump, it’s no surprise. Amazon dropped 4.75% on Monday. Tesla fell 5.8% on Tuesday. Apple (see our story on the company, below) dropped more than 5% on Thursday. To make sense of what’s going on in the markets, BBTW columnist Peter Green spoke with Jim Cagnina, Senior Market Strategist at NinjaTrader Live, a daily, expert-led livestream and educational platform designed for futures traders.

(Google)

Why such a big selloff in tech stocks?

Markets generally do not respond well to uncertainty, and right now there’s plenty of it. Geopolitical tensions, lingering inflation concerns, and their impact on interest rate expectations, and end-of-quarter portfolio reshuffling all hit at once in this particular situation. Combined with the fact that tech stocks and AI names have been sitting right around all-time highs for months; you've got a recipe for “profit-taking.”

How far down is the selloff likely to go?

According to many pros out there, we haven't even hit what traders consider the first real test level yet. Using a standard technical measure from the industry called Fibonacci retracement, neither the Nasdaq nor the S&P 500 has pulled back from their recent run-up. Until we see deeper levels tested, this still looks more like a pause than a full collapse.

Was this week's pullback more of a healthy correction or the start of a broader shift in sentiment?

Only time will tell. The term “correction” can be somewhat misleading because it implies that prices were somehow "incorrect" beforehand, but from a technical standpoint, the recent decline remains relatively modest.

Is it fundamentals — or is AI just getting ahead of itself?

From where I sit everyday, I can confidently say it’s both. The underlying demand for AI infrastructure is real, so components such as copper, data centers, and energy remain critical components in power generation. Those needs aren't going away any time soon. However, the stock prices of AI-adjacent companies have been running far ahead of the actual revenue those companies are producing, and that gap is what makes investors nervous.

People are saying there's no evidence companies actually want to use all that AI compute. Is that why it feels like a bubble?

That's the core tension right now because the infrastructure buildout is massive, but the proof that everyday businesses are adopting and paying for AI tools at scale just isn't in front of us yet. When you're spending trillions on capacity before the customers show up, that's where bubble talk starts.

(This interview has been edited for clarity and condensed)

—Peter S. Green

Big Businesses mentioned this week

$AAPL ( ▲ 1.75% ) $PG ( ▲ 1.61% ) $ACI ( ▲ 3.25% ) $CAR ( ▼ 3.95% ) $TSLA ( ▲ 0.52% ) $WELL ( ▼ 0.04% ) $SPCX ( ▲ 2.05% ) $KALSHI ( ▼ 3.12% ) $META ( ▲ 0.57% ) $POLYMARKET ( ▼ 0.27% ) $IBM ( ▲ 3.96% ) $AMZN ( ▲ 1.94% ) $TM ( ▲ 2.97% ) $GM ( ▼ 0.58% )

This week, big business!

Brexit, What Was it Good For? Absolutely Nothing?
The Usual Suspects

Brexit, What Was it Good For? Absolutely Nothing?

Ten years ago this week, the United Kingdom voted to leave the European Union and its frictionless, tariff-free single market of 430 million people. Brexit has since turned into a drag on the U.K. economy, and the reasons Brits voted for it are a lot like why Americans voted for Trump and the MAGA movement: The sense that taking back their sovereignty, and sealing their borders would somehow restore high-paying jobs to ordinary citizens. It hasn’t worked out, so far, in either place.

To understand what Brexit could teach the U.S., BBTW columnist Peter Green spoke with former Irish central bank governor Patrick Honohan, now with the Peterson Institute for International Economics, a non-partisan policy center in Washington. (This interview has been edited for clarity and slightly condensed).

Ten years on from the Brexit vote, and a year and a bit from the Trump tariffs, both Britain and the U.S. seem to have trapped themselves into a low-growth, high-inflation scenario while somehow thinking the world needed them more than they needed the world. What are the parallels?

PH: For me the economics policy parallels are not all that close, but there are parallels in the way politics has evolved in both the U.S. and Britain, with populist/nativist narratives becoming dominant. Brexit introduced significant trading barriers between the U.K. and the E.U. and Trump’s tariffs have increased trading barriers between the U.S. and the rest of the World. However, the Brexit motivation was to “take back control” over domestic policy: Brexiteers imagined that they could improve and increase trading with the rest of the world thanks to a supposed ability to reduce onerous E.U. regulation of industry. Any gain on this front (and there has not yet been much deregulation in Britain) has been more than offset by the tariff and especially the administrative barriers to British exports to Europe.

Can the effect be measured?

It’s hard to get a reliable precise estimate of the quantitative impact on the British economy, but few experts would contest a figure of minus 5 percent as the impact of Brexit on the U.K. economy by now. This is in line with the more credible estimates that were made by economists pre-Brexit. And future growth is also likely to be slower than it would have been without Brexit.

One parallel with the U.S. is on migration. Despite immigration from the rest of the EU having been one of the factors leading to a support of the Brexit proposal from nativists, the post Brexit period has seen a massive surge in net immigration, as there was a relaxation of the immigration rules for those coming from other countries. The [current] immigration slowdown reflects nativism in action and will, of course, have an adverse effect on growth in future years in both the U.S. and the U.K.

What lessons should the U.S. have absorbed from Brexit and its economic fallout? What might have been different had those lessons been absorbed?

[The] biggest impact of the Brexit debate and outcome was the political polarization that it both reflected and exacerbated. Centrist politicians in the U.S. could have seen this (also from the election leading to Trump 1) and worked to seriously address the concerns of the “left behind”. Instead they continued to treat them as deplorables.

What story do the numbers tell?

As mentioned, the GDP impact of Brexit is serious but not catastrophic. Catastrophist forecasters who anticipated a financial meltdown were proved wrong. But the deteriorating fiscal situation has made bond markets jumpy in the UK (as witness the mini-crisis that brought down Liz Truss’s government in 2022.) This could increasingly become a risk for the U.S. the way the Federal debt is growing.

Canada and the E.U. were our biggest trading partners in the U.S. — That’s in jeopardy (in fact Canada still has a massive surplus with the U.S.). What can or should we do now about it?

This one is easy. Stop imposing tariffs and stop insulting these trading partners, just as the Labour Party in the UK are gradually rebuilding relations with the E.U., potentially rejoining the single market in a limited way before too long.

What effect has the Iran war had on all this?

It certainly worsens the environment for U.K. policy makers, especially given their high indebtedness. For the U.S. it’s not as bad, despite their high indebtedness, given the degree to which the U.S. is an energy exporter.

Stepping back for the big picture, what is it that the U.S. policymakers don’t understand?

International collaboration based on the predictable application of trade law offers the best growth opportunities—not only for middle-size countries like the U.K., but also for the U.S.

So where do we go from here, and what happens if we don’t mend our ways?

I’ll pass on this one, if you don’t mind.

(This interview has been edited for clarity and condensed)

END OF ADVERTISEMENT

The Usual Suspects

Apple Sauced: Don’t say you weren’t warned. Last week, Apple $AAPL ( ▲ 1.75% ) CEO Tim Cook said competition from the AI buildout was raising the price of chips and other components in Apple’s devices, and a price hike was coming. That hike came Thursday, as Apple briefly shut its online store to reprice, and when the lights came back on, Macbooks were $100 more expensive. iPads got pricer, too, but iPhones did not. That’s expected for the next version of the iPhone, due out sometime soon-ish. Cook made the move in part because Apple’s hefty profit margins are what keep its share price and its P/E ratio (35.4 x on Wednesday) aloft. The price hikes put a quick damper on Apple’s price, but it’s likely that will wear off as consumers budget for the higher prices, analysts say. In afternoon trading Thursday, Apple was down about 5.6%, and that P/E ratio had shrunk to 33.45. So, at least Apple’s shares are on sale.

(Google)

What brands will do for eyeballs! Fast-moving consumer goods company Procter&Gamble $PG ( ▲ 1.61% ) has teamed up with the Albertson’s $ACI ( ▲ 3.25% ) grocery store chain for a sitcom micro-series called “Rico’s Tacos” about, of course, the cutest Mexican taqueria, with Dad Rico behind the counter, his daughter and the abuela. It’s a scripted show that aims, ultimately, to sell P&G products. Screens in Albertson’s 2,244 stores will show clips and a QR code to the Albertson’s app, where shoppers can watch "full" episodes that last up to two minutes each. Call it a modern-day soap opera. Currently, about 3% of all retail media advertising budget is spent on in-store advertising, or about $600 million. Emarketer says that could hit 1.1 billion in 2029.

(Rico’s Tacos)

Trying harder will do that for you. Perennial second-place car rentals company Avis $CAR ( ▼ 3.95% ) just scored a major win: A $650 million payment from one of its own major shareholders, hedge fund Pentwater Capital Management, which Avis blamed on Pentwater trying to short the company’s stock. Avis noted Pentwater was the only major trader in its shares when they rocketed up 560% in mid-April, then plummeting in a matter of days. Unfortunately for Pentwater, a little used SEC rule called the Short Swing Profit Rule, forbids shorts by big shareholders, and requires them to forfeit their gains to the company. Ka-ching! Avis’ shares dropped 65% from the shorting-induced high, but they’re still up 75% from where they were before the shorting began.
Raking it in. CEO’s are raking in the dough again, with more than two dozen making more than $100 million a year, and nearly a dozen topping $200 million. Sounds like a lot, but then, of course, there’s Elon Musk, who secured a $158 billion pay package last year at Tesla $TSLA ( ▲ 0.52% ) . How does that make you feel? Even the second highest-paid CEO in the country, Shank Mitra, got only $821 million last year from the senior housing and healthcare real estate firm he runs called Welltower $WELL ( ▼ 0.04% ) . That’s as the share of corporate income used to pay workers has dropped from 84% in 2008 to 71% today, and the war in Iran has wiped out the wage gains of U.S. workers since January 2025. The Wall Street Journal has diced the data in some cool charts.
M&M’s Get the blues with a MAHA makeover: Under pressure from Trump health secretary RFK Jr.’s “purity of essence” campaign to rid American food of artificial dyes, Mars, the privately owned maker of M&Ms says it’s having a harder time than it expected coming up with the requisite colors “au naturel.” Yellow, red and orange were easy, but blue and green (aka “the best color,” by popular consensus) have been a lot harder to create from organic matter. Now, Mars may have crossed that bar: It’s found a solution for blue and green: a plant called “spirulina,” better known as algae. If only there were somewhere they could go to find an excess of algae this week, huh?
Predictably: Buying SpaceX $SPCX ( ▲ 2.05% ) wasn’t enough of a gamble for you? Now online prediction market $KALSHI ( ▼ 3.12% ) says it’s prepping to take investors’ money on a ride to the moon and back. CEO Tarek Mansour said an IPO won’t happen this year, but reports say the company may sell shares by 2028. A year ago, Kalshi raised $185 million at a $2 billion valuation. In May it announced a funding round that valued the whole firm at $22 billion. With Facebook $META ( ▲ 0.57% ) struggling to find new sources of revenue as its advertising sales begin to stagnate, that kind of money has drawn the attention of CEO and founder Mark Zuckerberg. After failing to convince the world to don AI goggles, Zuck now thinks the next cool thing is prediction markets, and has developers creating an online app for just that, called “Arena.” At first it will use only points, but a company spokesperson told the New York Times it could eventually take bets in real money. Back in 2020, Facebook tested a prediction app called Forecast, that started with asking participants to make forecasts about Covid. But the app failed (it was too complex to explain here) and was pulled in 2022. Over at Polymarket $POLYMARKET ( ▼ 0.27% ) , the other big prediction market, the Wall Street Journal found that the company has been paying social media influencers to make videos that look like they’ve just made a killing on Polymarket. Instead, they made fake trades on a cloned website. It all sounds a bit cheeky, really.

IBM’s Quantum leap: After selling its laptop brand to Lenovo, IBM $IBM ( ▲ 3.96% ) is actually still making computers. Mostly the kind that companies buy to do really big math problems. And now it's preparing to tackle the biggest math problems at scale. IBM says it's creating a foundry for making quantum computing chips in upstate New York, which it will both sell to rivals and use for its own applied quantum computing. IBM is looking at 2029 to launch a reliable quantum computer called Starling, and an even bigger one in 2033. The Trump Administration has pledged $1 billion in the IBM venture.
OpenAi Unplugged? An Amazon-funded biopic of OpenAI founder Sam Altman and his travails at the AI firm has been dropped by Amazon’s $AMZN ( ▲ 1.94% ) film studio division, after being filmed, cut and shown in test screenings. “Artificial” is directed by Luca Guadagnino, who made “Call Me by Your Name,” and was scheduled to premier at SXSW next year. Amazon would only say that the movie would “be better served if it were released by a different studio.” A possible reason for the axing: Amazon has pledged $50 billion of investments in OpenAI this year.

(Luca Guadagnino (left) and Sam Altman (right) — Getty)

Toyota looming in GM’s rear view mirror. As the Iran war pushes consumers to hybrids, Japanese automaker Toyota $TM ( ▲ 2.97% ) is poised to once again overtake General Motors $GM ( ▼ 0.58% ) as the best-selling carmaker in the U.S. market. Analysts expect GM to outsell Toyota by only 83,000 vehicles in the first half of the year, and it could get tighter. “GM may be looking over their shoulder here when we get to the year’s end, that Toyota could potentially overtake them as the top selling manufacturer here in the U.S. market,” said Charlie Chesbrough, senior economist at Cox Automotive. Toyota beat out GM in U.S. sales once before, as supply chain woes devastated the car industry in 2021. GM has put its money on all-electric vehicles, and its only hybrid is a Corvette. Toyota makes some EVs, but continues its focus on hybrids. Speaking of EVs, Jeff Bezos-backed Slate Automotive has set a price for its stripped down two-seat EV pickup truck, with hand crank windows and no radio: $24,950. Sales are expected to start this fall. EV stalwart Tesla’s $TSLA ( ▲ 0.52% ) sales across Europe doubled in May from a year earlier, to 28,610 units.
Sometimes, it’s easy to forget that SpaceX $SPCX makes rockets. And rockets do one thing really well, go up and come down. That’s a trait apparently baked into the DNA of SpaceX shares as well. Two weeks on from its IPO, the shares are within spitting distance of Earth again. From a quick high of $225, they’ve dropped to $152, and briefly ducked below $150, the price when it began trading last week. Shares fell 16.4% on Monday, after SpaceX floated the idea of bond sale, borrowing money right after its $85.7 billion IPO. Retail investors are now nervously awaiting the end of the various lockup periods when early private investors and institutions will get to cash out the stakes they bought at tenth or less of the IPO price. While SpaceX has yet to be profitable, it has found a new revenue stream: Renting out its AI data centers to other AI companies. Next month it will start booking $150 million a month from renting compute to startup Reflection AI. That follows rental deals with rivals Anthropic and OpenAI. So what’s behind this? Yann LeCun, founder of AI company AMI Labs, says SpaceX’s xAI business is failing because Musk has driven away the talent the company needs to be an AI heavyweight. “Elon is now in a position that is very, very difficult for him to kind of hire top people in AI, because he’s kind of, you know, not behaved in sort of very good ways toward the ... previous team,” LeDuc told CNBC.

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The W⚽️rld Cup Is a Money Machine. But for Whom?

Cheddar's Big Business This Week — Thu, 18 Jun 2026 20:30:00 +0000

FIFA’s soccer World Cup promises to deliver $11.1 billion in spending and $30.5 billion economic impact for the U.S., but how much is it really helping the American economy? BBTW editor Peter Green spoke with Victor Matheson, a sports economist at College of the Holy Cross, in Worcester, Mass., who has spent years studying the economics of mega-events, including the Olympics and World Cup. With the 2026 World Cup spread across the United States, Canada and Mexico, Matheson sees a tournament that may be cheaper to host than past editions — but it’s also still unlikely to deliver the vast local economic windfalls promised by FIFA and host committees. Instead, FIFA itself is expected to reap a profit of about $11 billion.

What makes this World Cup different economically from past tournaments? Qatar reportedly spent $200 billion to host the 2022 World Cup.

Most estimates are between $50 and $100 million per city, and that's 11 cities in the United States. So, you're looking at maybe $1 billion of hosting costs, which we still shouldn't be thrilled with, because FIFA could have borne those costs themselves. That being said, it's still a tenth of what was spent in Brazil [$13.5 billion in 2014], and less than 1% of what was spent in Qatar.

It looks like the biggest change was that by spreading the games across three countries that already have full-sized stadiums, the cost came way down.

That’s right. There was no new stadium construction, although we put some coats of paint on things. We had a couple of stadiums where we had to widen the field to be big enough for FIFA standards. And we did spend a bunch of money swapping out turf for real grass in stadiums. So, there's millions or tens of millions of dollars spent on stadiums, but not billions. And we spent a bunch of money and millions of dollars covering up advertisements in stadiums if they conflicted in any way with FIFA's advertising sponsors.

So what are the real direct costs?

Maybe you can go as high as $2 billion. This is the cost of security, additional transportation, sanitation, transporting players around, stadium controls, all these things. Although we don't have any uniform numbers across all the different cities, we know we're in the billion or low, low single digit sort of zone. It’s a fraction of what was spent in the past, because there really aren't any major construction projects that are part of this event.

FIFA and local boosters argue there will be huge knock-on effects. How seriously should we take those claims?

If FIFA is trying to justify subsidies directed towards FIFA because of all the great things FIFA is going to do for you, that should be something that raises gigantic red flags with anyone, right? There's no doubt that there's going to be some level of tourism impact here that's positive, but it is likely to be significantly less than FIFA advertises. A big factor is what's known as the substitution effect, where economic activity occurred one place in a local economy, rather than somewhere else. So for example, I am going on Friday here in Boston to see Scotland versus Morocco. Those are expensive tickets, $400 each. That's $400 that I don't have available to spend elsewhere in the local Boston economy this year. It's not like my entertainment budget all of a sudden magically grew by $400. That's not new money that's getting spent in Boston, that's just shifting around where in the greater Boston area that money's getting spent. That's a substitution effect to the extent locals are going to the World Cup. And a lot of the people are local. That means that's not new economic impact. It's just a substitution effect.

So FIFA may be taking money that would have gone to local businesses?

Right. If I'm the usual bar goer, and I spend my money this summer going to Boston Soccer Stadium, instead of my local bar. Yes, that's money that FIFA's getting instead of my local bar. So that's a substitution away from my local bar towards FIFA.

What about ‘crowding out’?

Crowding out is when the crowds and congestion associated with something keeps other sort of economic activities from happening. Hotels are pretty full and they are full of soccer fans. But those hotels would be full of other types of tourists instead because we're now hitting our summer stride here. So, Boston hotels are usually 80 percent full all through summer. So, we have crowded out the regular economic activity. Right. And so we need to make sure we account for that when we're talking about economic impact. In 2024 in Paris during the Olympics, all the hotels were full, but the hotels are always full in Paris in summer. And during the Olympics, attendance at the Louvre and at the Musée d'Orsay was down about 25 percent. So you displaced one kind of tourist with a different kind of tourist. Same thing happened in the Olympics in London as well in 2012. They actually shut down some of the West End shows that normally would be on, again, because of a lack of that kind of tourist.

And what about ‘leakage’?

Leakage happens when money gets spent locally but doesn't stick locally. So, for example, if I go down to that local brew pub, here in Worcester, the Greater Good Brewery, which is a locally owned brewery, I go and I get a beer and I tip my server. Well, that brewery owner and that server are going to take my money, then they're going to spend it elsewhere here in the local Boston or Worcester economy. They're going to buy a haircut and then that barber is going to spend money at the market. And of course, that money circulates through. But during mega events like this, you may have a lot more of that money leak out of the economy right away. So, for example, the money I spend on tickets, none of that ever finds their way into any local business, that immediately heads back to [FIFA in] Switzerland. So no one is actually made better off in Boston by spending that money.

So who benefits most from the World Cup?

FIFA, number one. FIFA is going to make somewhere between 10 and maybe 13 billion dollars on this event both from record large crowds, but also record expensive ticket sales. They're going to benefit from gigantic TV ratings. Oddly, despite high ticket prices, we're seeing some really good crowds, typically sell-outs.

But FIFA is promising $30 billion in economic impact to the U.S. What should we expect when economists look back after the tournament?

When we actually go back and look at the economies of host cities, we will not find that level of economic impact. I think we will find a level of economic impact that’s positive, but I don't think we're going to find anything close to what FIFA is claiming, roughly a billion dollars per city. I think that's unlikely.

What did economists find after the 1994 World Cup in the U.S.?

We looked at the results from the 1994 World Cup in the United States. In that event, FIFA estimated $4 billion of economic impact for each host city. When we actually looked back at the host cities that did host games, we compared them to cities that didn't host games. We found that the host cities actually did about $4 billion worse than you would normally have expected them to do. It wasn't statistically significantly different from zero, but certainly we didn't get any evidence that there was any sort of surge. The numbers are always below projections. On average, the effects are either small or not distinguishable from zero.

(This interview has been edited and condensed for clarity).

—Peter S. Green

(x.com)

Big Businesses mentioned this week

$YUM ( ▼ 2.1% ) $YUMC ( ▲ 0.07% ) $APO ( ▲ 0.84% ) $SPCX ( ▲ 2.05% ) $FOX ( ▲ 0.67% ) $ROKU ( ▲ 0.53% ) $AMZN ( ▲ 1.94% ) $NFLX ( ▲ 1.83% ) $AAPL ( ▲ 1.75% ) $PSKY ( ▲ 2.12% ) $WBD ( ▼ 0.57% ) $TSLA ( ▲ 0.52% ) $RIVN ( ▼ 0.13% ) $META ( ▲ 0.57% ) $ANTHZZX ( ▼ 0.89% ) $OPEAZZX ( ▼ 0.2% ) $SNAP ( ▲ 2.9% )

This week, big business!

War Story
The Usual Suspects
Tech talk
Trumplandia
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War Story

MOU-ving In The Right Direction? Whether it’s a Memorandum of Understanding or Misunderstanding, whatever comes out of the latest talks between the U.S. and Iran looks like it will reopen flows of oil from the Persian/Arabian Gulf. But it’s unlikely that’s going to happen fast enough for the global economy to swiftly rebound. In fact, the global economy may have been permanently altered as countries remember that energy autonomy is a national security issue, and start building stockpiles and switching away from oil they can’t drill themselves. Brent crude futures dropped to $78 a barrel this week, close to the $75 it was trading at just before the U.S./Israeli bombing campaign began. Still, it will take months before all the oil now trapped in the Gulf reaches refineries and consumers, and more months before those tankers fill up again and global oil traffic returns to normal. Meanwhile, inflation in the U.S. is over 4.2% and the new Fed chair is not cutting interest rates. Japan has hiked rates to 1% (yes, 1%) its highest rate in 31 years, to fight inflation. And with Iran expecting to resume oil exports without any sanctions, there could be a price war that would alter global capital flows. That’s all before the U.S. gives Iran $24 billion in frozen assets and starts to create a potential $300 billion reconstruction fund for Iran. In other words? Nobody is out of the woods, just yet. Hillary Clinton wrote a surprising op-ed in the Financial Times praising the deal. “If even I, an implacable opponent of the president, can accept this as the best option, then surely others can too?” she wrote. Meanwhile Texas Senator Ted Cruz hasn’t exactly minced his words in opposition. “History teaches that giving billions of dollars to theocratic lunatics who want to murder us is not a good idea,” he said.

(X.com)

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The Usual Suspects

Sliced: Yum Brands $YUM ( ▼ 2.1% ) is selling off Pizza Hut. The operation is being sold in two slices: Yum China Holdings $YUMC ( ▲ 0.07% ) will buy the mainland China operations for $1.2 billion, while PE firm LongRange Capital is buying everything else for $1.5 billion. Growing competition and shrinking consumer cash has hit pizzerias hard. Coffee shops and Mexican restaurants are expanding, but the number of pizza shops has declined since 2018. In December, California Pizza Kitchen was sold to an investor group for $300 million, after going private in 2011 for $470 million. Apollo Global Management $APO ( ▲ 0.84% ) withdrew its $2.1 billion bid for Papa John’s last winter as consumer spending fell. Still, according to industry bible Pizza Today (is there a Deep Dish section?), there were still 75,736 pizzerias in the U.S. last year, though revenue fell 0.3%, to $49.5 billion in 2025. Yum brands shares climbed 3.44% on news of the sale, before giving back the gains by mid-week.
We will, we will…Roku. Lachlan Murdoch’s doubling down on Fox’s $FOX ( ▲ 0.67% ) future as king of sports, live-TV content and ad-funded streaming, with a $22 billion agreement to buy cord-cutting device Roku $ROKU ( ▲ 0.53% ) , which has its own free, add-supported on-demand movie and streaming service that will add to Fox’s Tubi. The deal is a lifeline for Roku, which has struggled to make a profit, and will help the combined business compete with Amazon $AMZN ( ▲ 1.94% ) and Netflix $NFLX ( ▲ 1.83% ) for ad dollars. Ad-supported plans now make up nearly half of all streaming signups in the U.S., up from 39% in 2024. But it adds $12 billion in debt to Fox, and the cash and stock deal will dilute Fox’s existing shareholders, many of whom clearly saw the 34% premium Fox will pay as a deal too far. Shares in Fox plunged nearly 18% after the deal was announced Friday, and are now down 21%. Roku shares rose nearly 23% on the news and are still up more than 10%.
(Google)
Disembodying the Spirit: Even in death, Spirit Airlines can find no rest. As it begins selling off assets to pay off its $8 billion debt, Spirit has a dilemma — how to unload its 22 slots (11 sets of takeoffs and landings) at New York City’s LaGuardia airport, one of the most expensive airports in the U.S. The FAA wants a low-cost carrier to take the slots, which could be worth $87 million, the New York Times reports, and the airport’s owner the Port Authority of New York & New Jersey, says whoever buys the slots has to take Spirit’s lease at the Art Deco Marine Air Terminal. But departure fees of $40 per passenger, among the steepest in the U.S., make those slots barely profitable. Meanwhile a Texas maker of recreational airplanes says it wants to buy all of Spirit’s planes, leases and other assets, and revive the airline.
Paramount deal gets Greenlighted: Paramount’s $PSKY ( ▲ 2.12% ) $81-billion deal to acquire Warner Bros. Discovery $WBD ( ▼ 0.57% ) got the approval of the Justice Dept after senior agency officials gave it the go-ahead, even as anti-trust attorneys in the same government agency had yet to decide whether they should sue to stop the deal. The department said the merger will “improve competition across the media and entertainment ecosystem, with benefits for American consumers and workers.” Top Justice Dept. officials fast-tracked the approval even though career lawyers analyzing the deal were leaning toward recommending that it be challenged, the Wall Street Journal reported. “This reeks of corruption,” Sen. Elizabeth Warren, the Massachusetts Democrat who is a staunch opponent of corporate consolidation, said on BlueSky. “The American people need to know if this merger was approved as a political favor.” Paramount shares are down 24.3% this year, dropping the company’s market cap to just over $11 billion. Next up, approval by the European Union, while several U.S. state attorneys general, including in California, ponder their own suits to stop the deal and preserve jobs in the entertainment industry.
Rivian troubles: Tesla $TSLA ( ▲ 0.52% ) competitor Rivian $RIVN ( ▼ 0.13% ) is laying off hundreds of workers in its service and sales units, just as it is trying to win a bigger market share from Tesla and other EV makers with a new electric SUV, the R2. But with a sticker price of $58,000, some buyers say the car is too pricey, even in a leased version, whose monthly payments can top $800, the Wall Street Journal reports. Rivian had revenue of $5.4 billion last year on sales of 42,000 vehicles, but it has yet to turn a profit. Shares in Rivian are down 16% this year, but up 26% from a late May low.

Tech talk

The X factor: There’s one number that may hold the key to understanding the SpaceX $SPCX ( ▲ 2.05% ) IPO: $1.08 billion. That’s how many shares changed hands in the three trading days since Elon Musk’s rocket company went to market. That’s 1.7 times the 639 million shares floated in the IPO. And that’s before individual investors reach the end of their 15-day lock up period. In other words, for many investors, SpaceX was a just a game of the “the bigger fool”: Find someone who’s willing to pay even more for the shares than you did. Now those arguable fools are hurting, as the laws of gravity take hold. After rocketing up from $150 to over $219, SpaceX shares have since fallen to $187, wiping out more than a hundred billion dollars in market cap, a largely notional value at this point.
Among the fools, count the founders of Cursor, the AI vibe-coding tool, which Musk agreed to buy with about $60 billion in SpaceX stock. That deal will go through, as will the cashing out by SpaceX’s initial investors who may see payouts of more than 20x their initial investment. The week’s high briefly made SpaceX more valuable than Microsoft $MSFT ( ▲ 0.65% ) , before dropping half a trillion dollars in value. But it oculd easily drop further. Morningstar analyst Nicolas Owens values the company at $63 a share, about 53% below the IPO price and third of what it was trading for on Thursday. He says there is too much uncertainty about its two biggest programs, reusable rockets and space-based data centers. “Max Q, the moment of greatest atmospheric pressure on a launch vehicle, will come for SpaceX’s stock in the months following the IPO, when successive tranches of stock held by private investors and employees are slated to become available for sale into the public market,” Owens wrote. “We think long-term investors eager to participate in SpaceX’s future will have opportunities to do so with a greater margin of safety than the initial offering is likely to provide.”

(Google)

Meta’s AI-yai-yai problem: Fearful of being an also-ran in the AI race, Meta’s $META ( ▲ 0.57% ) cagefighter-in-chief, Mark Zuckerberg, spent $14 billion to hire one man, Alexandr Wang, along with his firm, Scale AI, and a group of its engineers. In April, Wang delivered the Muse Spark AI model, Meta’s first proprietary AI engine, but two months later, an eternity in AI time, it’s not showing any sign of helping Meta’s bottom line. “Meta needs to provide more proof points of both adoption and commercialization,” William Blair analyst Ralph Schackart, told CNBC. “Investors are looking for Meta to monetize a new AI-first product.” Despite Q1 revenue up 33%, Meta shares are down about 18% in the past year. And on Wednesday, Meta said the executive leading its internal AI transformation, Emily Dalton Smith, was stepping down, which doesn’t exactly bode well.

(Google)

Too smart to start? Anthropic $ANTHZZX ( ▼ 0.89% ) says it's been holding talks with the Trump Administration on restoring public access to its Fable and Mythos 5 models, which the company said have guardrails to prevent them from overwhelming internet security systems or teaching users how to make bombs and start pandemics. Last week, just hours after Anthropic said the limited models would be available, Amazon $AMZN ( ▲ 1.94% ) CEO Andy Jassy told Trump Administration officials his engineers had found a way to “jailbreak” the model and get past the guardrails, and the federal government ordered the Anthropic models shut. Similar models from OpenAI $OPEAZZX ( ▼ 0.2% ) do not appear to have been throttled, and the move comes just months after Anthropic refused to let the Department of Defense use its AI models for autonomous “killing machines.” (OpenAI offered to let the DoD use its models presumably for killing machines, instead). But now, Anthropic has announced it will go public, and is currently valued at $965 billion. A failed IPO could hurt the stock market. That’s created pressure on both sides to reach a quick solution.
Apple takes a (price) hike: Apple $AAPL ( ▲ 1.75% ) CEO Tim Cook says the company will be raising prices amid surging costs of memory and storage chips. "We've been trying to shield our customers from the increases, but the situation has become unsustainable,” Cook told the Wall Street Journal. Price hikes might come at Apple’s next big launch event in September. Research firm TechInsights says that to maintain the profit margins that keep Apple's share price high, Cook would have to boost the price of an iPhone by a cool $275.

(Google)

Snap back? Remember those video-recording Snapchat $SNAP ( ▲ 2.9% ) glasses back in 2016 or so, that you could (theoretically) buy from a vending machine for $99, and use to turn your daily life into a series of Snaps? Um, they’re back. But this time they cost more than $2,000 ($2,190 to be precise) and they’re supposed to…do more. Given the 90% decline in the firm’s share price since then amid a steep fall in advertising, they may be the future of Snap. At least, that’s the plan of Evan Spiegel, co-founder and CEO and a man anxious to succeed. The main question is whether he has enough runway. Snapchat had about $2.8 billion in cash on hand at the end of March, which may not be enough to sustain the $500 million-a-year project. Twitter reactions to the new glasses have been very amusing over the last few days.
(X.com)

Trumplandia

Warsh Going On? At his first meeting of the Fed’s rate-setting Open Market Committee, newly installed Fed Chair Kevin Warsh threw down the gauntlet: He’ll be a hawk on rates for now, despite pleas by President Trump, who appointed him, to lower interest rates ahead of the November elections. The Fed held its benchmark rate at 3.5% to 3.75%, in a unanimous vote. But quarterly economic projections by the other 11 voting members of the panel indicate there could be at least one interest rate hike this year, instead of a cut. After the meeting, Warsh said cutting inflation, which reached a 4.2% annual rate last month, was job one: “We have the capability and commitment to deliver on our price stability objective,” Warsh said. “That’s exactly what we’re going to do.” AI spending and the war-fueled energy price spike have sent prices rising and consumers complaining. With unemployment steady around 4%, Warsh apparently sees little he can do to improve the job situation without first cutting prices. The Fed’s Summary of Economic Projections massively upgraded expected inflation for the year to 3.3% from 2.7% last month, and said GDP was likely to grow by only 2.2%, down from 2.4%. Warsh quickly made clear there’d be no more lengthy jawboning about what the Fed might or might not do. Instead, he wants the Fed to say less, and let it react more to markets. “Warsh seems ready to buck the Fed market feedback loop, where the market digests Fed communications. Instead, he wants more price discovery from the markets, and for the Fed to to digest the markets’ interpretation of economic developments,” Chris Hodge, chief U.S. economist at Natixis wrote in a note. The only problem with that? Everyone is looking after their own short-term gain, and no one is taking the big-picture view. Still, retail sales rose 0.9% in May in a sign that the great American consumer is shaking off gas price shocks, and average U.S. gas prices fell below $4 a gallon for the first time in months this week. So, the picture is nuanced.

(AAA)

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Is the Coming IPO Wave a Financial Trap?

Cheddar's Big Business This Week — Thu, 11 Jun 2026 20:30:00 +0000

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SpaceX starts selling shares this week in the largest IPO of all time, aiming to raise about $75 billion and valuing the company at $1.7 trillion. Anthropic announced its IPO plans last week, and this week OpenAI filed its first IPO papers with the SEC. None of these companies are profitable, and they are seeking billions of dollars of investor cash. Big banks from JPMorgan Chase $JPM ( ▲ 0.76% ) to Goldman Sachs $GS ( ▲ 0.92% ) are applauding the IPOs, but do the numbers add up? To hear the alternative perspective, Big Business This Week columnist Peter Green spoke with Ed Zitron, a Public Relations professional working in the technology industry who’s been increasingly critical and outspoken lately about the tech industry’s giga-IPOs. An edited and condensed version of their conversation is below.

SpaceX $SPACZZX ( ▲ 0.5% ) wants $75 billion from investors. Anthropic $ANTHZZX ( ▼ 0.89% ) and OpenAI $OPEAZZX ( ▼ 0.2% ) have already burned through tens of billions of dollars each. These companies aren’t profitable. What is going on here?

The thing no one wants to talk about with the AI bubble is that there isn’t really a business here. Even Anthropic is only getting revenue because it’s subsidizing its customers. Claude Code let you burn thousands of dollars of tokens, and now they have moved customers to token-based billing, and businesses have very suddenly had to switch from a quasi all-you-can-eat model to having to spend what the token basis is, and they quickly find they are burning so much more than they expected. The majority of AI customers have learned to use a product that eventually will not exist, and they have no idea if they can afford it à la carte. It’s a giant cuIt. It generates code, but it also hallucinates, so you have no idea what it costs and no idea if the end product has value. It's laughable to say this stuff has value when you can't say what it costs. We don't even know if the tokens themselves are profitable. None of these companies is profitable. Anthropic raised $95 billion, and they have no real business. They have grown their model through hype or scaring people. A couple of months ago, they said Mythos is too scary to release. I guess not, in the end?

Will these IPOs satisfy their need for cash to prime the pump, and allow them to finally make money?

Dario Amodea [the Anthropic co-founder] just said that the reason they want to go public is so they can get money from public markets because they need more money to train their models. When does their training end? They are desperate to make people think training is a capital expenditure. It's not. It’s pure operating expense, so these companies will be raising money in perpetuity. They could be raising $100 billion a year. Anthropic and the AI firms are currently monetizing executive incompetence. How does any of this ever work out? No one has a compelling answer, no one can explain how they ever stop being the largest welfare recipient of all time.

Is there anything this can be compared to?

I actually don't think there is any company in history that has needed this much money. Not one. And all of them need that much money and they need it regularly. I just don’t see that the markets have the support for it. When the companies finally show actual financials, people will freak out because these companies are not in a good financial state at all. They’ve done a good job of convincing private investors and the media that they are more healthy than they really are.

So what’s the back story here? Let’s start with the first up, SpaceX. Why are they going public?

Elon is a mess. Elon is trying to find a cash exit for himself and his investors. And that money can only come from retail investors. Look, multiple parts of SpaceX’s business do not make sense. It all loses so much money, except perhaps StarLink.

A lot is riding on the SpaceX IPO because it's first out of the gate and because it’s going to suck up all the cash in the market. How will the success or failure of the SpaceX IPO affect OpenAI and Anthropic?

The SpaceX IPO makes things more difficult for OpenAI and Anthropic, because if it goes south, no one will invest in the others. And the underlying economics are a horror show with SpaceX. Rockets are a capital expense burden, but it's the AI side, $7B in capex in the last quarter. The most profitable part of xAI is renting computers to Google $GOOGL ( ▲ 1.77% ) .

Every time you read about a deal with the AI firms it looks like a circle.

Circular finance needs to be made illegal. The only function of some of these deals is to inflate other shareholders, like Google’s, own investment in SpaceX or Anthropic. Retail investors are being used as exit liquidity. And the only thing worse than what's happening at SpaceX is what will happen at OpenAI and Anthropic, which have no business at all.

So who will protect the small shareholder?

I don’t think the Securities and Exchange Commission cares. I don't think we have solid financial regulation in this country. Seeing Goldman say Space X’s revenue will rise 300x? Sellside and buyside analysts have failed the financial industry as well as the small investor. We are going to see in the next few months just how bad an idea this was. Retail investors will get washed out in SpaceX. They are marks for a larger con. I will be shocked if OpenAI makes it to the IPO. But the SEC won't stand in the way and the media will make them look better than they are. If they do hit the IPO, there will be carnage for the investors. The underlying economics for these companies are broken. The sad thing is they are being allowed to float because of the hope of the AI bubble, with no accounting for the fact that these companies will have no profits, ever. And they never will, because no one has been able to make the AI models less expensive to run.

If it’s such a bad deal, why is everyone flocking to it?

The reason this is inflated is because all the people joined in the same way. It’s revealed how much of our economy is run by people who don’t really think about what they are doing. Large Language Models do a really good impression of work, which is all you need to convince the CEO that it’s good. It's an exploitation of executive ignorance. It also shows how many companies are run by people who don’t know what they are doing. I mean, remove AI from this world and go to the CEO and say “I gotta spend 10% of headcount on a tool, that I can’t tell you the results, and I can't tell you the cost.” You’d get laughed out of the building. I don’t want investors to get hurt. That blind faith in some secret formula will only lead regular people into the abyss.

—Peter S. Green

Big Businesses mentioned this week

$JPM ( ▲ 0.76% ) , $GS ( ▲ 0.92% ) , $SPACZZX ( ▲ 0.5% ) , $ANTHZZX ( ▼ 0.89% ) , $OPEAZZX ( ▼ 0.2% ) , $GOOGL ( ▲ 1.77% ) , $AAPL ( ▲ 1.75% ) , $APO ( ▲ 0.84% ) , $BX ( ▲ 2.47% ) , $AVGO ( ▲ 0.32% ) , $AMD ( ▲ 2.49% ) , $NVDA ( ▼ 0.03% ) , $CBRS ( ▲ 0.31% ) , $META ( ▲ 0.57% ) , $NDX ( 0.0% ) , $SPX ( ▲ 0.86% ), $KALSZZX ( ▲ 0.13% ), $PLYRZZX ( ▲ 0.01% )

This week, big business!

War Story
The Usual Suspects
Trumplandia
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War Story

The Gulf War Energy Bottleneck That Could Send Oil Soaring Back To 100 Dollars: Donald Trump, Benjamin Netanyahu, and whoever the heck is running Iran all seem content to stay on the Gulf War rollercoaster, ratcheting tensions — and oil prices— up one day and lowering them the next, as the price of oil follows suit, with both a peace deal and full-scale war remaining just out of reach. But the outlook isn't good. While Brent crude fell to just $86.79 a barrel on Wednesday, a bit more than $10.60 above the price on the first trading day after the war began on February 28, and ships have been gingerly leaving the Gulf, few have been entering, and more than 160 large oil tankers remain bottled up behind the Strait of Hormuz. That’s put tremendous strain on the world’s energy supply, and now come fears that oil prices will stay high longer as countries build larger crude reserves so they don’t get whacked the next time rockets fly over the Gulf. Call them "nation preppers,” says the Wall Street Journal, which notes that while it will take 500 million barrels of crude to replenish depleted reserves, there’s only 100 million barrels on ships waiting to leave the Gulf, so it could take a year just to replenish those reserves. And don’t expect oil to stay this low. “Prices may look calm on the screen, but the bottleneck is in tankers, storage tanks, wells, and crews,” says Morgan Stanley’s global commodities strategist, Martijn Rats. He sees Brent crude hitting about $100 a barrel in the third quarter, and only dropping to $80 in mid-2027.

(Google)

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The Usual Suspects

Flying on Empty? The global jet fuel shortage, and attendant high prices for what jet fuel can be found, are setting global airlines and their passengers up for a bad winter, with airlines planning to cut tens of thousands of flights if fuel prices stay high. They’re up about 50% since the war in the Gulf started in February. Passing on those costs is a conundrum for airlines: They can’t afford to absorb higher fuel costs, but passengers are getting squeezed by inflation. “You need to make sure you’re filling every seat,” an airline industry consultant told the Financial Times. “You can’t fly planes that are empty.”
Hey Siri, What’s up with Gemini? Apple $AAPL ( ▲ 1.75% ) , the traditional laggard when it comes to AI tech integration, says it’s now leapfrogging the competition with an AI-enhanced Siri, built in conjunction with Google $GOOGL ( ▲ 1.77% ) , the creators of Gemini AI. Apple insists it’s not just wrapping Google’s Gemini in a slick white apple envelope, but it's hard to see what else they’re doing: As 9to5Mac put it, four of the five models are “custom versions of Gemini running on Apple Silicon.” The fifth model is just Google’s standard Gemini model trained on Apple-centric data.
Double-Chip Trouble: Nope, it’s not the latest flavor from Ben & Jerry’s, it’s a tie-up of your two worst financial fears: the AI funding circularity and the private credit bubble. Apollo $APO ( ▲ 0.84% ) and Blackstone $BX ( ▲ 2.47% ) say they’ve completed a $35B private credit deal that will fund Anthropic leasing chips from Alphabet $GOOGL ( ▲ 1.77% ) , which already owns about 15% of Anthropic $ANTHZZX ( ▼ 0.89% ) . The circularity doesn't stop there. Alphabet’s Google Cloud is Anthropic's primary cloud provider, and Anthropic uses Google’s proprietary Tensor Processing Unit chips to train Claude AI. And who makes those chips? Broadcom $AVGO ( ▲ 0.32% ) , which not only provides key networking components for Google's data centers, but also agreed to guarantee the private credit loans. Ya know what’s even funnier? The numbers: Nearly half of Alphabet’s $62.6 billion profit in the first quarter, or $28.7 billion, came from writing up the value of its stake in Anthropic. Keeping that stake alive is now a vital part of Alphabet keeping its share price up. And let’s not mention that the deal is straining limits of the $3 trillion private credit market.
‘Nvidia ain’t alone: Las Vegas-based cloud computing startup TensorWave has just raised $350 million to build a data center using chips from Advanced Micro Devices $AMD ( ▲ 2.49% ) , instead of Nvidia $NVDA ( ▼ 0.03% ) . Investors like the idea, valuing the firm at $1.55 billion that nearly quadruples its value in the past year. It joins a roster of firms offering non-Nvidia options for AI labs, including Cerebras $CBRS ( ▲ 0.31% ) , Majestic Labs AI, and Decart. Founder Darrick Horton said he didn't want to have to rely on Nvidia alone. “I don’t like buying things from monopolies,” he told the Wall Street Journal. “You don’t have a lot of leverage.”
Rottweiler 2.0? It was billed as the rottweiler of AIs, a killer so dangerous it couldn't be let loose. But now Anthropic is releasing what it says is a gentler, tamer version of Claude Mythos. This one’s called Fable, and Anthropic says that if it's asked “dangerous” questions about, say, biohazards or weapons systems, it will reroute the query to a dumber version of Claude. But just in case you really want to do something dangerous, Anthropic’s also upgraded Mythos, the AI it said was too dangerous for the public. Only members of the top secret U.S. government-affiliated Glasswing project will get access to Mythos 5, which has fewer safeguards. What could possibly go wrong? According to an essay posted this week by Anthropic founder Dario Amodei, just about everything. “The cyber risks that Mythos-class models present will not be the last that we must face. I believe that biological risks may soon follow, and that serious AI autonomy risks may not be far behind,” Amodeo wrote. Now, he’s urging the government to take swift action to regulate AI.
Return to slender: You would’ve thought that with more than 23% of U.S. households on GLP-1 weight loss drugs, these would be boom times for the apparel industry, as the newly slim splurge on new clothes and shoes and even underwear, with 80% of semaglutide users expecting to refresh their wardrobe. But every silver lining has its cloud, and slimmers turn out to be really bad online shoppers, unable to guess their new sizes. That’s caused a steep rise in returns at online clothiers, with some reporting that as many as 1 in 8 purchases is returned because it’s the wrong size. And returns are deadly for retailers. It can cost a retailer as much as 80% of the sale price to process a returned item.

The Data Center Glut: Before we even consider whether there’s enough demand for data crunching to power all the new AI data centers being built, let’s pause to look at the quantum state of Cheyenne, Wyoming. This sleep state capital, population 66,000, is home to 10 data centers, with five more under construction and nine more in the planning stage. Cheap land and abundant natural gas are drawing the centers. Local officials say the construction will generate jobs and keep young people in the state. Local residents say the constant construction traffic has ruined their prairie home. But what's got everyone really upset? A “man camp” to house 5,600 workers — quick-build apartments and RVs offering laundry, internet, dining service and pickleball courts. To get all those men into the camp, Meta $META ( ▲ 0.57% ) is starting a “workforce academy”, a $115 million program in four states, offering five weeks of free training in how to swing a hammer or otherwise learn a skilled trade needed to build data centers. Every graduate is guaranteed a job. Meta didn’t say how many workers it will train but said it's already gotten 35,000 applications. Trade groups say the U.S. is short 350,000 construction workers.

Playing the Market: What is going on with the U.S. stock market? Just as SpaceX, Anthropic and OpenAI prepare to go public, consumers are fleeing tech stocks. The tech-heavy Nasdaq-100 $NDX ( ▲ 1.59% ) is down 5.5% in the past five days, while the S&P 500 $SPX ( ▲ 0.86% ) is down 3.3%. Bloomberg’s Mag-7 index is down 7% in the past week. The problem seems to be an oversupply of stocks on the market: the vast number of shares the giga-IPOs will unleash will reverse a 23-year trend that saw the net supply of equity in the U.S. (new shares issued minus equity removed by buybacks and firms going private) shrink consistently. That scarcity helped U.S. shares more than triple in price in the past decade. And it will just get worse in 2027, as the lockup periods on the big AI IPOs expire, Goldman Sachs $GS ( ▲ 0.92% ) says. That could actually kill the tech-led stock rally, as funds sell off Mag-7 and other stocks to buy the IPOs. “Record new issues is one of the classic signs of a bubble,” Richard Bernstein, global head of macro investing at Janus Henderson Investors, told the FT.
Fortune telling: It’s the world’s biggest sport, and it's about to be the world’s biggest gambling event: The soccer world cup that starts this week in the U.S., Canada, and Mexico is expected to attract some $50 billion in wagers, according to an analysis by Australian bank Macquarie. That’s given new urgency to efforts to regulate online gambling and especially the new prediction markets (we’re looking at you, Kalshi $KALSZZX ( ▲ 0.13% ) and PolyMarket $POLYMARKET ( ▼ 0.27% ) ) like the proposal this week from the Commodity Futures Trading Commission to block prediction bets that are not in the public interest or are susceptible to being manipulated. One target: Sports-related bets on whether a player gets injured, or misses a foul shot. The rules would also ban bets on wars, terrorism and assassinations. This comes after a string of cough, cough, possibly-rigged bets on oil prices that may have been linked to White House officials, and the arrest of a U.S. special forces soldier and a Google $GOOGL ( ▲ 1.77% ) employee for insider trading on prediction markets. Kalshi will now require that some users disclose the identity of their employers.

Trumplandia

Numbers game: Life is getting difficult for American consumers as inflation hit 4.2% and gasoline princess rose 7 percent in May. Grocery prices are up, the job market is stagnant, and the giga-IPOs about to hit the markets could upend many people’s retirement plans. Pity the consumer, but save some of your schadenfreude for Kevin Warsh, President Trump’s newly appointed Federal Reserve chair. Warsh came into office sorta kinda promising to lower interest rates (which he’ll now have to raise) and bring down inflation, (which has now soared again, although not quite to its 9% highs during the pandemic). Trump has shrugged it off. “I love the inflation,” he inexplicably told reporters in the Oval Office on Wednesday, promising that as soon as the Iran war ends, oil prices will drop “like a rock.” But Warsh will have a harder time of it. His job is to keep inflation low, employment high, and the dollar in command. But there’s a lot going on. “What we are seeing is three distinct inflation waves — from tariffs, from oil, and now AI capex — layered on top of each other,” Evercore ISI economist Krishna Guha wrote this week. Warsh says we’re looking at the wrong numbers, and he wants to set policy using less volatile price numbers, which he argues “capture the underlying inflation rate,” not a one-off hike in the price of beef or a war in Iran. But he’s only one of 12 votes on the Fed’s Open Market Committee, which sets rates. And while the Fed’s been keeping its benchmark interest rate high, currently at 3.50% to 3.75%, set in December, to keep inflation in check, it hasn’t helped. “Monetary policy is not restraining the economy,” Dallas Fed president Lorie Logan said in a June 3 speech. “I am increasingly concerned that higher interest rates could be necessary later this year to fully restore price stability and appropriately balance both sides of the Fed’s dual mandate.”

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Decoding Investor FOMO About the AI & SpaceX IPOs

Cheddar's Big Business This Week — Thu, 04 Jun 2026 20:30:00 +0000

A historic wave of IPOs is about to hit Wall Street. SpaceX $SPACEX ( ▲ 2.0% ), Anthropic $ANTHROPIC ( ▼ 1.8% ), and OpenAI $OPENAI ( ▲ 14.54% ) , companies once confined to private markets and tech lore, are racing to go public with valuations that could redefine the market. For the average investor watching from the sidelines, the frenzy can feel alien, driven by a complex mix of technological promise and sheer fear of missing out (FOMO).

To cut through the noise, BBTW’s Peter Green spoke with Troy Hooper, cohead of equity capital markets Americas at business intelligence firm MergerMarket.

Our conversation came just before Goldman Sachs’ $GS ( ▲ 0.92% ) rationale for SpaceX’s $1.78 trillion valuation was made public: Goldman sees SpaceX’s AI revenue rising 100x by 2030, to $322 billion by 2030 from $3.2 billion in 2025. SpaceX’s total revenue is expected to reach $474 billion in 2030 from $18.7billion last year.

(Google)

(This interview has been condensed and edited for clarity and brevity )

Peter Green: We're facing massive IPOs from SpaceX, Anthropic, and OpenAI amid economic uncertainty, high inflation, and geopolitical turmoil. How do you explain this disconnect to ordinary investors? What is really going on?

Troy Hooper: There is enormous capital that constantly moves in finance, both in public and private markets. What happens on Main Street does not reflect Wall Street; they are often two completely different universes. These deals are all being driven by AI. AI is a watershed moment in our civilization. Companies are trying to be the leader in that race. You have startups like Anthropic, OpenAI, and SpaceX to some degree trying to win. Then you have giants like Alphabet $GOOGL ( ▲ 1.77% ) Microsoft $MSFT ( ▲ 0.65% ) and Oracle $ORCL ( ▼ 1.74% ) in a race to be the winner. The publicly traded tech giants have the money to burn. Even without this innovation cycle, they constantly do research and development. But this is a moment where the technology has become enticing. They are making these investments to try to lead that market.

Green: Can these companies achieve the revenue to justify trillion-dollar valuations? SpaceX's revenue is a fraction of its target valuation.

Hooper: Those two examples [Tesla $TSLA ( ▲ 0.52% ) and SpaceX] are completely detached from reality. That's the Elon Musk factor. Tesla has always been about the vision; they've sold themselves as a tech company. With SpaceX, you have to buy into the vision Musk is peddling. When you look at the financials and balance sheets, they don't justify the valuations Tesla currently has or that SpaceX aims for in its IPO.

Does that same "vision over financials" logic apply to Anthropic and OpenAI? And how long can shares stay aloft on just an idea?

Anthropic and OpenAI are a little more rooted in reality. The valuations, while certainly high, are not unrealistic like SpaceX and Tesla have been. The opportunity to make money in AI is certainly there. Look at the 'neo-cloud' companies who buy NVIDIA $NVDA ( ▼ 0.03% ) chips and rent them out to hyperscalers like Microsoft $MSFT ( ▲ 0.65% ). Some were created just a year or two ago and are already generating billions in revenue. Even SpaceX, in its S-1 (IPO filing document), revealed a leasing agreement where it rents surplus chips to Anthropic for a vast sum. That is very similar to what these neo-clouds do.

Is there enough cash in the market to absorb all three IPOs?

That's the multi-trillion dollar question. We'll find out. They will have to space them out. You can't have them all at once. Some big institutions will have to sell other stocks to make room. That could have a knock-on effect on the entire Nasdaq or S&P 500. We could see other stocks sell off to make room for these.

Would those sold-off stocks then become bargains?

Maybe. It depends on how much they sell off and whether their business fundamentals remain consistent. That's hard to know.

That sell-off could hurt many individual investors.

It absolutely could. There's a risk there.

Let's game the sequence. SpaceX goes first but is the most volatile. What happens if early investors cash out after lock-up periods and the price falls? How would that affect the subsequent Anthropic and OpenAI IPOs?

It depends on if it's a mild disappointment or a catastrophe. If SpaceX were to flop, it wouldn't necessarily doom the others entirely, but it would apply more pressure. It could force them to delay their listings or reduce their valuation expectations.

We're in a strange macro environment: high interest rates, stagnant housing, an energy crunch. How do these factors affect such massive IPOs?

There are a lot of moving pieces. Interest rates seem high now, but they're historically normal. Once capital becomes more expensive, budgets tighten. Investors will have to consider all these variables.

Is a major driver simply FOMO? More money is now in ETFs than individual stocks [approximately 53% to 47%]. Is there an irrational thirst here?

Absolutely. Some of it's by design. SpaceX is structuring its deal to include about 30% retail. They've convinced NASDAQ to change rules to allow them to join index funds earlier. When you have average people asking if they should buy the SpaceX IPO, that's FOMO.

What about the circularity critique? NVIDIA invests $5 billion in OpenAI, which then buys $5 billion of NVIDIA chips. It looks like revenue, but is there real end-user demand?

I think so. There's also a question of how sustainable the demand is. Uber came out recently and said they weren't getting the expected results from their AI capital expenditures. We might start seeing large businesses pull back on AI spend. That could cascade down and change the forecasts of AI infrastructure companies.

Skeptics like Michael Burry call this a bubble, citing governance, unrealistic P/E ratios, the energy crunch, and a lack of use cases. What's your response?

There are definitely signs we're in a bubble. A lot of the things we've talked about. Even the fact that Alphabet is doing an $80 billion equity raise, its first meaningful one in close to 20 years, is a sign. You issue shares when you can get the most money for them. There are elements of a bubble. But even if we are, it doesn't mean it will pop tomorrow. Sometimes these things keep inflating for years.

If these IPOs are successful, will we see more gazillion-dollar listings?

If they're all successful, it'll go on. But the party usually stops at some point. AI is still in the early days. There's a lot more that needs to play out before we know exactly how powerful and profitable it is.

—Peter S. Green

Big Businesses mentioned this week

$SPACEX ( ▲ 2.0% ) $ANTHROPIC ( ▼ 1.8% ) $OPENAI ( ▲ 14.54% ) $GS ( ▲ 0.92% ) $GOOGL ( ▲ 1.77% ) $MSFT ( ▲ 0.65% ) $ORCL ( ▼ 1.74% ) $TSLA ( ▲ 0.52% ) $NVDA ( ▼ 0.03% ) $BZG23 ( 0.0% ) $BRK.A ( ▲ 0.63% ) $TMHC ( ▼ 0.02% ) $BX ( ▲ 2.47% ) $GME ( ▲ 3.73% ) $PSKY ( ▲ 2.12% ) $IAC ( ▼ 0.08% ) $MGM ( ▼ 2.06% ) $VOO ( ▲ 0.85% ) $UBER ( ▼ 1.23% ) $BTC ( ▲ 0.24% ) $MSTR ( ▲ 1.88% ) $UAA ( ▲ 2.82% ) $JPM ( ▲ 0.76% )

This week, big business!

War Story
The Usual Suspects
Tech Tales
Media Mirror
Trumplandia

War Story

It’s expensive waging war, and not just for buying weapons and fixing the wreckage they leave behind. Moody’s Analytics says the war on Iran has cost the U.S. $100 billion, or about $750 per household, mostly from higher prices for gas and the knock-on effect on food, transportation, shelter and everything else. Until now, says chief economist Mark Zandi, deficit-financed tax cuts have cushioned the blow for middle- and lower-income families. But that ended May 16, by his calculation. “Unless the war ends soon and energy prices come down, they will have little choice but to rein in their spending, weighing further on the already sagging economy,” warned Zandi.
So what’s going on with oil? And why isn’t it yet at $150 a barrel (Brent crude $BZG23 ( 0.0% ) hit a 3-month low of about $86 a barrel on Thursday)? That’s largely because of two things, says economist Douglas Eakin: The drawdown of billions of barrels of oil in storage tanks and floating in tanker ships, and Beijing taking to heart President Trump’s threats early in the year to attack Iran. When the bombs dropped in February, China had been stockpiling Russian crude for months. While some ships are getting out of the Gulf, either by paying off the Iranians or under U.S. guidance, Gulf nations are planning a pipeline to bypass the Strait. A partial deal on letting oil tankers pass through the Strait may happen soon, says business intelligence service Kpler, noting that Iran’s exports have dropped from nearly 2 million barrels a day to just 300,000 since Iran’s blockade and the U.S. blockade of the blockade began in April. Even with a deal, traffic won’t be back to normal until September or October at the earliest, says Kpler. And that could be enough to savage global growth, which for now is riding more on hopes than reality. “The market settled into a delusional expectation that it's all going to end soon, with a stroke of Donald Trump’s pen. All of that trapped oil is going to flow,’” energy analyst Rob McNally of Rapidan Energy Group told the Financial Times. A more likely scenario, says McNally, is that without new oil on the market, prices could jump in July or August close to $200 a barrel, forcing “the most gruesome and unpleasant form of demand curtailment and a broader economic downturn.”

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The Usual Suspects

WWWD: For decades savvy investors have been asking themselves “what would Warren Buffett do? In January, Buffett retired after more than half a century as chairman of Berkshire Hathaway $BRK.A ( ▲ 0.63% ) , leaving the now $1 trillion holding company sitting on a $400 billion pile of cash, and his successor, Greg Abel, in the spotlight. Now Abel has made his first move: He paid $6.8 billion to acquire homebuilder Taylor Morrison $TMHC ( ▼ 0.02% ) , placing a bet on homebuilding will recover despite high interest rates, and spent $10 billion shares in Google $GOOGL ( ▲ 1.77% ) , Berkshire’s first AI play. Since its birth Berkshire has been guided by legendary stock picker Benjamin Graham’s value investing principle: forget FOMO and only buy bargains, and then hold them for a long time. Check back in a few years, then, to see how Abel is doing.

Nervous investors: Investor fears that the $2 trillion market in private credit loans may be in trouble hit home again this week, when Blackstone $BX ( ▲ 2.47% ) , the world’s largest private investment group, said it’s restricting withdrawals from its $45 billion flagship private credit fund, known as Bcred. Redemption requests hit $4.5 billion, or 10% of the fund’s assets, in the second quarter, the FT reported. Many of the business software companies that boomed over the past decade, along with rollups of medical practices have been financed by private credit, and AI, inflation and high interest rates have rattled the private credit business model, imperiling the very survival of many software firms.
GameStop gets Serious: GamesStop $GME ( ▲ 3.73% ) , the one-time meme stock that cost short sellers more than $20 billion in 2021 and 2024, is back. Profits rose in the past quarter to $389.6 million up from $44.8 million a year earlier. And the company has agreed to buy back $2 billion worth of stock to boost its share price. That could eat into the cash available for CEO Ryan Cohen audacious $56 billion bid for eBay, which at this point is presumed by most market-watchers to be DOA. GameStock’s market cap is only $10 billion, and eBay’s board has rejected the offer outright. The firm’s shares are down more than 26% in the past year, though they jumped more than 8% on the profit report.

What’s old is new: Barry Diller, the 84-year old media mogul and takeover artist behind the 1980’s revival of Paramount $PSKY ( ▲ 2.12% ) and more recently Interactive Corp $IAC ( ▼ 0.08% ) and the Daily Beast, says IAC, which is about to be renamed People Inc. (it acquired the former DotDash-Meredith, which owned People magazine) plans to buy the 74% of MGM Resorts $MGM ( ▼ 2.06% ) it doesn’t already own, for more than $13 billion, including debt. Why go from media to entertainment? Alongside People Inc.’s digital media assets, MGM Resorts represents a “perfect hedge in a world that is changing so unpredictively fast,” Diller wrote in an April letter to shareholders. “MGM owns 40% of the Las Vegas Strip—an entertainment nucleus that simply cannot be replicated anywhere in the world,” he added.
Vanguard in the lead: In a sign of the growing power of Exchange Traded Funds (ETFs), low-fee investment manager Vanguard’s S&P 500 ETF, $VOO ( ▲ 0.85% ) , has become the first ETF to hold over $1 trillion in assets, having quadrupled in size since 2022. “As investors chase the AI boom, ETFs have become an ultimate vehicle for US equity exposure,” Todd Rosenbluth, head of research at TMX VettaFi, told the Financial Times.

You gotta pay the fare: Is money getting tight at Uber? This week Uber $UBER ( ▼ 1.23% ) announced the layoff of several hundred people from its HR and recruiting department, and put a cap on employees’ usage of AI, after the company used up its 2026 AI budget before the end of April. Uber shares are down 19% in the past six months. Meanwhile more states are coming after the ride share companies. After Massachusetts last month said ride share drivers could unionize, Colorado is cracking down on safety in Ubers, Lyfts and other ride shares, requiring the companies to ensure riders can opt in to video and audio recording during rides, and mandating semi-annual background checks for drivers.
Bitcoin’s burst bubble: There it goes again: Bitcoin $BTC ( ▲ 0.53% ) , the mercurial cryptocurrency, has lost half its value since last October’s alltime peak over $122,000, falling below $63,000 this week. It seems all that excitement about ETFs being able to buy and hold cryptocurrency did not materialize after all, and some analysts say it could drop to as low as $50,000, as asset managers dump bitcoin to raise cash to buy the next shiny object: the SpaceX IPO. Another reason behind the drop: Strategy $MSTR ( ▲ 1.88% ) , the firm that created the idea of Bitcoin-holding companies as their own asset class, sold Bitcoin for the first time since 2022. While it only sold about $2.5 million worth of tokens, it managed to spook the entire cryptocurrency market, which is known for moving on the tea leaves and entrails of celebrity traders.

Step(h)ing up his game: Steph Curry, arguably basketball’s greatest active player, has signed pro sports’ biggest endorsement deal yet with a Chinese athletic wear maker, inking a 10-year, $400 million contract with Li-Ning, a company founded in 1990 by China’s Olympic gold-winning gymnast Li Ning. Curry ditched struggling UnderArmor $UAA ( ▲ 2.82% ) last year. Chinese brands are facing an increasingly competitive market at home, and Li-Ning says it will open brick and mortar Curry stores in the U.S. Curry said he liked the brand’s shoes. But Li-Ning products were banned from the U.S. in 2022, after the U.S. government said it used forced labor in its factories. Rep. Chris Smith, a New Jersey Republican on the Congressional-Executive Commission on China, said he’ll ask the Department of Homeland Security to examine the deal. "The NBA, its players, and sites like Amazon cannot suggest that they stand for social justice at home while cashing checks from companies tied to the Chinese Communist Party's forced-labor economy,” he told ESPN.

Tech Tales

The Great Big Data Center Wait: A concatenation of problems have formed into a seemingly irresistible force delaying the construction of the massive data centers that AI companies need to train their systems and host the servers that will do all that deep-thinking stuff that AI is supposed to do for us. An analysis by JPMorgan $JPM ( ▲ 0.76% ) found that 60% of the data-center capacity expected to be online in 2027 just won’t be ready. Backlogs in the supply chain, delays in getting building permits, a shortage of electric power to run the chips and of water to cool them, and growing opposition from neighbors are all raising questions that clearly have yet to be priced into AI’s business case. Google parent Alphabet $GOOGL ( ▲ 1.77% ) just sold $10 billion in shares to Berkshire Hathaway $BRK.A ( ▲ 0.63% ) , and plans to raise another $70 billion this year. Its shares fell 3.9% on the news Tuesday, and it lost $340 billion of market cap this week, raising questions about the near-term viability of its AI expansion. Unlike the big money-losing AI startups, Google usually can borrow the money it needs without selling off shares in the company. “The fact that they had to raise equity really makes you wonder about the intensity of the capex needs over the next couple of years,” analyst Michael Nathanson of MoffettNathanson told the Wall Street Journal.
Data centers also have a big problem with community opposition, and one PR firm has a fix: Do a better job of selling yourselves. A survey for PR firm Hahn, which works with utilities around the country, found that only 23% of consumers say they feel comfortable living within a 10-mile radius of a data center, and “anti-data center sentiment is boiling over.” As a company rep said in an email this week, communities “see data centers as faceless, nameless strip miners [that] land, extract resources, exhaust what's around them, and leave, while distant billionaires get richer and locals are left holding higher electricity bills.” One reason for the perception could, of course, be that it’s close to the reality. Good luck fixing both!

(Google)

Media Mirror

Star-crossed: The battle between Politico founder Robert Allbritton and right-wing New York Sun publisher Dov Efune over who gets to call their new Washington news org “The Star” got a time-out this week after a federal judge ruled that Efune, who bought the rights to the name in 2024, could press forward with his “Washington Star,” while Allbritton has to wait for a ruling on whether he can rename his news organization to “The Star.” Allbritton’s father, Joseph, was the last publisher of the defunct DC newspaper “The Washington Star.” Both men are hoping to capitalize on Jeff Bezos’ massive cuts at the Washington Post to capture its readership.
There’s more turmoil at Paramount’s $PSKY ( ▲ 2.12% ) CBS News, where right-wing boss Bari Weiss installed a former graphic designer as head of the venerable (and profitable) “60 Minutes” investigative show, the top rated news show in television, then promptly fired three of its top reporters including Scott Pelley. The show’s ratings are up although the channel’s evening news show has slumped to third place, with barely 4 million viewers under Weiss’ direction, behind NBC with 6.1 million and ABC with 8.2 million. Shares in Paramount are down 21% this year. CBS was forced to deny rumors Joe Rogan was being considered for a “60 Minutes” story on Thursday, but not before the satirists got in on the story on social media.

Trumplandia

Tariff troubles. Remember back in February when the Supreme Court struck down most of the tariffs, saying only Congress had the power to levy taxes? The Trump Administration was supposed to give back about $166 billion to importers who’d been forced to pay the extra duties. We all knew it was unlikely that retailers and consumers would get back anything to compensate for higher costs, but now the Administration says it's not planning to hand back all the money, and its been stalling in the courts. By law, the tariffs must be repaid with interest, so the government is racking up a bigger bill by the day. Unless of course, it never pays. Some 330,000 importers paid tariffs on some 53 million bundles of goods entering the country, and the government now says it might only pay back $127 billion. And even for that cash, it’s insisting that each importer file its own lawsuit. While the Administration says it has paid back $21 billion so far, it’s just announced new tariffs on key trading partners, including a 25% tariff on brazil, and and new tariff on 10% to 12.5% on 59 countries and the European Union, alleging they’ve failed to crack down on the use of forced labor.

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A Quantum leap for tech investment

Cheddar's Big Business This Week — Thu, 28 May 2026 20:30:00 +0000

TODAY’S NEWSLETTER IS BROUGHT TO YOU BY:

(Getty)

Imagine a computer that’s so fast it can discover new drugs to fight cancer or Lou Gehrig’s Disease and bring them to market in a few years, instead of decades. And imagine stocks that can soar five-fold or 10-fold in just a few years, the way chipmakers like Nvidia $NVDA ( ▼ 0.03% ) and Micron Technology $MU ( ▼ 0.22% ) have done. Put those together, and you’ve got quantum computing, a decades-old science that may be on the cusp of an AI-like explosion.

That point was made clear last week, when the Commerce Dept. signed letters of intent to invest some $2 billion in nine U.S. firms with promising quantum computing technologies. The money, already part of Joe Biden’s CHIPS act, has been shaped by the Trump Administration into non-voting equity stakes, rather than loans or grants.

“Quantum computing has significant implications for national defense, advanced materials and biopharmaceutical discovery, financial modeling, and energy systems,” the department said in a press release, adding that “a strong domestic quantum ecosystem is essential for U.S. national security, technological resilience and long-term strategic leadership.”

The government investments follow a wave of private equity and stock market investment in quantum computing firms, and investments from larger firms, like $IBM ( ▲ 3.96% ) , which will get $1 billion from the government and invest another $1 billion of its own in quantum computing.

So: What is quantum computing? Is it really the next big thing, and how do ordinary investors get in on the action?

Quantum computing isn’t just a bigger, faster computer, says Rebecca Krauthamer, the founder and CEO of quantum computing firm QuSecure. “That’s the biggest misconception about a quantum computer,” she said in an interview. Better to think of quantum computing as a method to discover the fastest and most optimal way to get through a maze. Instead of a single mouse trying every turn one after the other, imagine a family of mice, each trying every turn and sharing that information with each other instantaneously to find the shortest route. “You can hold all of these paths through the maze in your memory at once. Then, you’re cooking with quantum.”

The deep science of quantum computing is too complicated to explain here, but the keys to remember are that it is lightning fast, massively complex, and may just be getting close enough for real world applications. That’s where the business case comes in.

Quantum researchers and investors divide those applications into two major groups - offensive and defensive. Offensive is the really complex stuff, like finding new molecules to treat disease, or (less pleasurably) running massive facial recognition data systems that may even take a page from sci-fi writer Philip K. Dick’s Minority Report (remember the 2002 film version with Tom Cruise?) and predict criminal behavior. The defensive stuff may be even more important right now: Ensuring data security. Technologists fear that the first people to get their hands on advanced quantum computing will be able to crack the algorithms that encrypt everything from text messages and emails to bank transactions, medical records and possibly blockchain-encoded crypto currency. That’s why firms like Krauthamer’s are building next-gen security systems with quantum computing.

When will quantum computing take off?

Krauthamer says it may happen as early as 2029, when quantum computers become powerful enough to crack the algorithms that keep data safe. “No longer is the world saying, ‘ah, it’s a future problem’,” said Krauthamer. “All of a sudden, some of the smartest minds in the world are saying it's coming now.’”

That’s why many tech and financial companies are moving to something called PQC, or post-quantum cryptography, an encryption system they hope can’t be outsmarted by quantum computers.

Noel Goddard, CEO of Brooklyn-based Qunnect, which is building the specialized networks and infrastructure that quantum computing will need to take off, says she’s probably two years away from her partners and clients being able to put quantum computers to work, and start building the software to run on them,

Not everyone agrees that “Q-Day,” as some industry people call it, is around the corner.

“You know, I've been pitched in my various roles that quantum computing is two years away for 15 years,” said Afsheen Afshar, founder, CEO and CIO of Pilot Wave Holdings, which buys and invests in firms that can benefit from AI and quantum computing, and who’s a former head of AI for PE fund Cerberus Capital Management. Now, he says, it may finally be getting closer. Current quantum computers can process just a few hundred or thousand qubits, the term used to measure quantum capacity. But Afshar says quantum computers need to be able to process millions, if not billions of qubits before they can tackle big problems like drug discovery. “So the famous expression goes, when there's a gold rush, invest in the people making shovels, right?,” said Afshar. That means firms like GlobalFoundries $GFS ( ▲ 2.15% ) , a New York-based chipmaker that has a promise of a $375-million investment from the government. Then there are the firms tackling technical challenges to quantum computing, whose chips heat up faster than even the Nvidia chips going into AI data centers. They can’t just be cooled with air conditioning, they need liquid nitrogen flowing across the surface of the chips to keep the complex calculations going.

How can investors grab a piece of the action?

Even as some of the firms that got CHIPS money last week saw their shares jump as much as 50%, it’s still early days in Quantum computing and therefore, in quantum investing, says Andrew Rocco, a tech analyst at Zacks Investment Research. He says established, listed companies are the best ones to invest in, including CHIPs recipients IBM and GlobalFoundries. “If you want a piece of potentially what quantum could bring, but also you don't want to throw darts, I would say that IBM would be your best path,” Rocco said in an interview. He likes GlobalFoundries because they’re building the hardware that every quantum company will need, no matter whose technology wins. Then, he says there are “high octane, pure plays,” that also got CHIPs money last week, like D-Wave Quantum $QBTS ( ▲ 0.84% ) , Rigetti Computing $RGTI ( ▲ 0.73% ) , and Infleqtion $INFQ ( ▲ 1.24% ) . Some Exchange Traded Funds offer investors access to a more diversified basket of quantum stocks, like the Defiance Quantum ETF $QTUM ( ▲ 1.24% ) , the Wisdom Tree Quantum Computing Fund $WQTM ( ▲ 1.62% ) .

(Google)

“They have very, very little in revenue,” said Rocco, of the companies mentioned. “I would think of these as like early stage biotech,” he said, “if you're looking for something that's backed by fundamentals, these certainly aren't just yet.” But he said, “the good news is now that they have this funding, you don't have to worry about them going bankrupt. They have that government backstop in place to do research for the next few years. And the upside is asymmetric.”

With the right bet, any investor’s portfolio could take a quantum leap. #NotFinancialAdvice

—Peter S. Green

Big Businesses mentioned this week

$NVDA ( ▼ 0.03% ) , $MU ( ▼ 0.22% ) , $GFS ( ▲ 2.15% ) , $QBTS ( ▲ 0.84% ) , $RGTI ( ▲ 0.73% ) , $INFQ ( ▲ 1.24% ) , $UMGP ( ▼ 23.13% ) , $DIS ( ▲ 0.69% ) , $SPOT ( ▲ 0.77% ) , $BP ( ▲ 0.04% ) , $CRH ( ▲ 1.02% ) , $LULU ( ▲ 2.16% ) , $NKE ( ▲ 0.49% ) , $UBER ( ▼ 1.23% ) , $DASH ( ▲ 0.46% ) , $F ( ▲ 0.65% ) , $TSLA ( ▲ 0.52% ) , $JPM ( ▲ 0.76% ) , $C ( ▲ 0.23% ) , $ANTHROPIC ( 0.0% ) , $INTU ( ▲ 2.81% ) , $OPENAI ( 0.0% ) , $GRPN ( ▲ 2.46% ) , $SSNLF ( ▲ 115.5% ) , $SBUX ( ▼ 0.48% ) , $CMG ( ▲ 0.19% ) , $SPXL ( ▲ 2.43% ) , $DJIA ( ▲ 0.82% ) , $NDX ( 0.0% ) , $SCHW ( ▼ 0.08% ), $GOOGL ( ▲ 1.77% )

This week, big business!

War Story
The Usual Suspects
Trumplandia
Want more Cheddar?

War Story

(Google)

Talks go on, oil goes down, missiles fly, oil goes up: With no sign of any strait talk on Hormuz, traders appear to be pricing in both declining economic activity and the eventual release of the 1,500 or so oil tankers bottled up in the Persian/Arabian Gulf. On Thursday, benchmark Brent crude was trading at about $96 a barrel and West Texas Intermediate at around $91, far below their wartime peaks of $126 and $119 each. Meanwhile, U.S. stocks marked their eighth consecutive week of gains. But getting all that oil out will not be easy. Before the war, about 130 ships passed through the Strait of Hormuz each day. First up is clearing the mines that Iran reportedly laid in the strait. Then there’s prioritizing which ships move first, and finally, there’s the messy business of keeping the ships moving through the 21-mile-wide strait without banging into each other, or running aground. Supertankers can take over a mile just to make a 90-degree turn. It’s why turning them is the basis of the world’s most boring management metaphor. Before that, stranded ships need to be resupplied, refueled and their massive engines restarted, meaning at least two months before all those ships start moving. None of that has helped U.S. consumers, as inflation hits three-year highs.

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The Usual Suspects

The Lady ain’t no Tramp: Universal Music Group $UMGP ( ▼ 23.13% ) , the long-time home of artists including Lady Gaga, Taylor Swift and The Beatles, likely won’t be sold to voluble Wall Street investor Bill Ackman and his Pershing Square Capital, after Universal’s French shareholder Bollore Group said Ackman’s $65 billion offer undervalued the world’s largest music company. “I don’t think it would be positive for the company and I encourage UMG management to reject that offer,” Bollore told shareholders at the company’s annual meeting on Wednesday. The Bollore family holds 40% of the voting rights (and about 18.5% of the shares) in UMG. Ackman needs a two-thirds vote to take control. Ackman has long pushed to get control of UMG and move its listing from Amsterdam to New York to “unlock value.” He also pledged to appoint former Disney $DIS ( ▲ 0.69% ) president Michael Ovitz as chair. In May UMG said it would sell its 3.1% stake in Spotify $SPOT ( ▲ 0.77% ) and use the cash to buy back its own shares. UMG shares are down 30% in the past year.
BP’s corporate Turm-oil: Just because you’re the boss, doesn't mean you can be bossy. London-based oil giant BP $BP ( ▲ 0.04% ) (once also known as “British Petroleum” before a rebrand during the “renewable energy years” as “Beyond Petroleum” and now that we’re apparently over all that, simply, “BP,” once again…) ousted chairman Albert Manifold this week after whistleblowers complained that he was bullying underlings and news reports said he’d been trying to run the company, normally the job of its CEO, Meg O’Neill. Manifold, who previously ran one of the world’s largest building supply companies, Dublin-based CRH $CRH ( ▲ 1.02% ) , had no oil-and-gas experience. He’s the third chairman to depart in the past three years, and O’Neill is the company’s third CEO in the same period. BP has been trying to reverse plans to be a clean energy company, and re-embrace its fossil-fuel-burning roots. Its share price rose more than 20% under Manifold’s tenure, but has fallen 9% in the last 5 days. Manifold has denied the allegations. “I dispute entirely the characterization of my conduct, and I will not allow a false narrative to go unchallenged,” he said in a Bloomberg interview. BP, meanwhile, stands by the claims and quickly scrubbed all mention of him from its website.
Lululemon founder takes a deep breath: Yogawear pioneer Lululemon $LULU ( ▲ 2.16% ) has reached a state of inner peace, at last, with founder Chip Wilson, who’s been haranguing the company for years, saying it’s lost its yoga mojo, and even launching a proxy fight to change the firm’s board. Under the new peace deal, Wilson (who owns 8.7% of the company’s stock) will shut up about the company for 18 months. In exchange, he can name two directors, and the two sides will agree on a third director with marketing chops. Former top Nike $NKE ( ▲ 0.49% ) exec Heidi O’Neill becomes CEO this fall, as Lululemon’s U.S. sales are faltering and the company’s share price has gone downward, dog, by 60% in the past year.
Mars, Schmars. We’re going to the Moon, baby! Forget about building a manned space station on mars, NASA’s just awarded a bunch of contracts to build a $20 billion Moon base, and the first of those are going to Jeff Bezos’ Blue Origin, which gets $468 million for two un-crewed landers. Astrolab and Lunar Outpost will each get $220 million to build unmanned lunar rovers. SpaceX did not receive any contracts in this round.
Uber Essen: What could be wurst? San Francisco-based Uber $UBER ( ▼ 1.23% ) has boosted its stake in German food delivery app Delivery Hero to nearly 37% with the purchase of a 14.6% stake held by Hong Kong investment manager Aspex Management. The move sets up a potential takeover move by Uber that would value the German company at about €12 billion. Delivery hero’s Middle East operation, Talabat (which means “orders”), has been eyed by DoorDash $DASH ( ▲ 0.46% ) . Delivery Hero’s shares are up nearly 150% since mid April on takeover rumors. Uber is down 20% in the past year, and DoorDash is down 23% in the past year. In Massachusetts, drivers for Uber $UBER ( ▼ 1.23% ) and Lyft $LYFT ( ▲ 2.0% ) have unionized and will be represented by the App Drivers Union, following a 2024 ballot initiative. Ride-share drivers in California and Illinois hope to unionize soon.
There’s a Ford Battery in Your Future: Ford $F ( ▲ 0.65% ) stock is up by a third in the past two weeks, reaching heights it last saw four years ago, when shares broke $16. And it's not because of newly relaxed energy efficiency rules or a sudden thirst by suburban dads for oversized pickup trucks. Nope, after canceling ambitious EV plans, Ford cleverly spun out its EV group into an energy storage unit called “Ford Energy.” Making those batteries available for AI data centers, utilities and industrial customers now has Ford competing with Tesla $TSLA ( ▲ 0.52% ) .
Star Wars 12: The Return of the Merchandising. Disney’s $DIS ( ▲ 0.69% ) Star Wars series is back with its unnervingly cute and totally merchandisable 14-inch-high Baby Yoda character, Grogu. The big-eared, gibberish-speaking creature led the film to a $145 million box office debut last weekend, triple its nearest competitor. But the real good news was a ComScore exit poll showing kids loved the movie, even as critics panned it, meaning there are gonna be a lot of Grogus filling Christmas stockings come December. Disney shares are up nearly 13% since a late March low, but still down nearly 8% in the past year. Investors in the stock over the last 20 years, in fact, have been on a rollercoaster as exciting as any of those available at its theme parks:

(Google)

WWJB: What Will Jamie Buy? JPMorgan Chase $JPM ( ▲ 0.76% ) CEO Jamie Dimon says he’s prepared to spend $20 billion buying something. But what? “There might be, in the next couple years, a chance to put $10 or $20 billion to work buying something,” Dimon said at a conference this week. But anything he buys would have to fit into JPMorgan’s existing network, he said, before slamming his competitors for trying to merge their way out of poor performance, saying M&A is not a growth strategy. Then he poured cold water on his own idea. “The first thing they do when they’re not doing well in organic growth is they start to bulls--t about [M&A],” Dimon said of other corporate execs. “I don’t want to hear about M&A ... What are you doing to grow your business — sales, branches, tech, profits, products, services?” Meanwhile JPM has mainly (checks notes) bought distressed banks to grow, including Bear Stearns after the 2008 crisis and First Republic after it over-leveraged to Silicon Valley in 2023. Dimon got burned paying $175 million for college aid startup Frank in 2021, which turned out to be a fraud. The cash has been freed up as reserve requirements have been eased under the Trump Administration. JPM is outperforming the stock market over the last five years but it’s being caught up by rival Citigroup. $C ( ▲ 0.23% )

(Google)

Tech time

Div-AI-ne Intervention? Pope Leo will not abide by the things that are going on with AI. In a 42,000-word letter, the Chicago-born head of the Catholic Church warned that new rules and regulation are needed to cope with what he called “the distorting effects of technological power,” to ensure that AI benefits people, not the “transnational companies” that put profit ahead of humanity, and may put most of humanity out of work. The Pope presented his letter alongside Anthropic $ANTHROPIC ( ▼ 1.8% ) co-founder Christopher Olah, who’s not a Catholic, but said the AI community needs the pope’s moral guidance. That’s not how the rest of Silicon Valley responded, though. The New York Times collected the musings of some senior AI people in the Bay Area who see the Pope as an interloper: “People are matter-of-factly saying that they are looking to build a machine God,” said Rayan Krishnan, CEO of a firm that tracks AI tools. “They are not saying that ironically or in jest. They are saying it as a matter of fact.” Jeremy Nixon, CEO of the Infinity AI Institute, took a page from (Catholic) Vice President JD Vance’s book and said the Pope simply doesn’t understand AI. “Practically speaking, it will achieve the outcomes that many religions claim their deities would be able to achieve,” he said.
Still, AI continues its relentless march: A Paris-based nuclear power developer called Newcleo says it plans to go public in the U.S., betting that its plans for lead-cooled reactors (they are supposedly less accident prone than the pressurized water reactors at Fukushima…let’s hope so…) will be in demand to power the AI boom. Turbo layoffs are coming as Intuit $INTU ( ▲ 2.81% ) announced it will fire about 3,100 people, 17% of its workforce, and shift to AI to manage projects. The news comes as OpenAI $OPENAI ( ▲ 14.54% ) says it’s adding personal finance options to ChatGPT, with support from Intuit, which owns TurboTax and Credit Karma. Groupon $GRPN ( ▲ 2.46% ) also said it’s cutting 400 workers, about 25% of its workforce, to rebuild as an “AI-first” company. Over in South Korea, Samsung $SSNLF ( ▲ 115.5% ) employees used their strong unions to wrangle a very lucrative concession from management: 78,000 workers in the company’s chip business will share 10.5% of Samsung’s operating profits, giving them an average bonus of about $400,000 each. Shares in Samsung rose 7% on the news. They’re up 427% in the last year.
(Google)
Suddenly you’re talking real numbers: Big tech companies are finding that their quest to use agentic AI is eating up so many tokens that it may simply be cheaper to hire humans. "For my team, the cost of compute is far beyond the costs of the employees," Bryan Catanzaro, vice president of applied deep learning at Nvidia $NVDA ( ▼ 0.03% ) , told Axios. Add to that employees using AI tokens simply to show they are doing something with all that free time Claude has given them since it’s taken over their daily work, and maybe humans will triumph, after all? Claw creator Peter Steinberger said he spent $1.3 million in a month on OpenAI tokens.

Trumplandia

Interest rates ain’t going down any time soon. That’s the consensus view in the world of economists and bond traders. As Moody’s Analytics chief economist Mark Zandi said in a post this week, yields on T-bills keep climbing. “Treasury yields have jumped in big part due to the Iran War and the resulting increase in inflation expectations, but also to the ballooning federal budget deficit and surge in Treasury securities issuance necessary to finance it,” Zandi wrote. The Treasury issued a record $3 trillion in debt in March, and that’s growing by a record 10% a year, or 10% of GDP a month. This year, for the first time, the federal debt exceeded the country’s annual economic activity (aka GDP). The problem, as Zandi notes, is who’s gonna buy all those bonds, unless the Treasury offers even higher interest rates. New Fed chair Kevin Warsh says he doesn’t want to buy more Treasury debt, and neither do traditional purchasers like China and Japan. “That leaves highly leveraged, capricious hedge funds as the dominant new buyers,” said Zandi. And that means rates are likely to move up even further.

Want more Cheddar?

What Are The Hidden Risks of Giant IPOs?

Cheddar's Big Business This Week — Thu, 21 May 2026 20:30:00 +0000

SpaceX $SPACEX ( ▲ 2.0% ) , Anthropic $ANTHRP ( 0.0% ) and OpenAI $OPENAI ( ▲ 14.54% ) are all poised for or filing for IPOs over the next few months, and under new quick-entry rules, they will swiftly join the Nasdaq-100 stock index. Passive funds, the ones that invest in the indexes that are now dominated by very large cap stocks like the MAG-7, no longer outperform the market, they are the market, accounting for well over 50% of all investments in U.S. stocks:

(Google)

Passive funds have to buy every stock in the index, in proportion to its weight in the index. So, what happens when Space X, with its $1.75 trillion valuation, and the forthcoming IPOs of AI giants OpenAI and Anthropic, all hit the market in the next few months?

BBTW columnist Peter Green talked with Cam Harvey, a Duke University finance professor, a partner in investment manager Research Affiliates, and the author of a recent study entitled “Passive Aggressive: The Risks of Passive Investing Dominance.”

Harvey warns that the rush of giant private companies to public markets will leave ordinary investors buying at premium prices, reserving earlier gains for wealthy “qualified investors.” Harvey says the rise of passive investing and index-fund demand may distort price discovery and increase systemic risk.

Your recent work on what you call "passive aggressive investing" feels especially timely with the SpaceX, OpenAI, and Anthropic IPOs on the horizon. What's the core problem you see with mega-IPOs?

The SpaceX IPO is looking to raise at least $75 billion, and the overall capitalization of SpaceX will be $1.75 trillion, which means what is going to the market is about 4% of the value. Passive investors, such as index funds, need to include this in their portfolio. So just given that expectation—and the supply and demand constraint—there's going to be pressure on the price to go up. So the retail investors who can buy this will likely be paying a premium, just because the passive investors have to buy. That means the expected return will likely be low. But that's certainly not the experience of qualified investors, who were able to buy this stock many years ago and have benefited from the appreciation already.

So wealthy and institutional investors win twice — first by getting in early, then by selling into demand created by index funds?

This is a situation where the definition of qualified investors just creates inequality. It tilts the playing field towards the big investors, which include hedge funds. It just doesn't seem fair to me. The 1933 Securities Act was designed to protect investors, given what happened in the late 1920s, but at this point, I think we need to revisit this to allow for a different criteria to be a qualified investor. For example, some sort of education rather than just money. I'm concerned about this benefiting large investors that have the resources to get in early. But the average investor will be faced with buying the stock, if they choose to do so, at a premium price.

More giant tech IPOs are coming — Anthropic, OpenAI. Nasdaq recently changed its rules to fast-track these into indexes. Does that make the problem worse?

That's exactly right. The quick entry rule has got this downside. So it's not just a quick entry. There is an exemption on the amount of float that's available. With SpaceX, it's only 4%. That's going to cause a problem because the index funds don't care that the Price/Earnings ratio of the company (its valuation relative to the revenue it’s bringing in) is 70 or 170. They just have to buy. It's not a decision, it's not discretionary. That creates competition for the shares driving up the price.

You write about what you call "the danger of synchrony." Can you explain what that means for ordinary investors?

53% of all investment is passive. And again, the passive investor doesn't care about any fund limits. It's completely irrelevant. Passive growth makes stocks move together, because when flows come in, they buy everything. And when flows go out, they sell everything. So what this does is create the possibility of increased systemic risk. When there's a breakdown, people are selling, then the index funds sell everything.

So that means volatility increases. So when correlations increase, think of — you've got a portfolio of stocks, and some have low correlations, some high correlations. If something happens to one stock, well, there's diversification, because there's other stocks that might do well, if one stock does poorly. But if everything's moving in the same direction, then there's no diversification.

If passive investing creates these problems, why can't active fund managers beat index ETFs?

Most active managers are unskilled. You can look at active mutual funds and see they don't outperform on average. But that doesn't mean you shouldn't invest actively. It just means you need to be careful what you buy.

How do you find an active manager worth trusting?

What you need to do is to understand what the active manager is actually doing. Does it make sense? And you can look at the track record, which is also informative. But the investment logic, I think, is the most important.

What does the math look like for someone buying SpaceX shares at the IPO price? The numbers SpaceX reported are a bit scary: A $4.9 billion net loss on $18.67 billion in consolidated revenue last year, one-fifth Tesla’s $TSLA revenue, and the AI unit generated only $818 million in the first quarter.

If you're buying at 70 times earnings, that's like double what Nvidia is. So you're buying something that's just twice as expensive as Nvidia. So what are the prospective returns for something like that? If you look at buying at a price-earnings ratio of 70, on average, that would suggest very low expected returns.

But those returns were great for the early investors. You've called for rethinking who qualifies as an accredited or “qualified” investor. The original intent was protecting less-informed people from risky investments — but is that logic still sound?

Even the retail investor can buy risky things like Bitcoin with leverage. That doesn't make any sense. Being “qualified” needs to be more about information. A high school teacher with a master's or even a PhD in biology has got an interest in biotech, but can't buy a biotech private equity stock because they don't make enough money. That makes no sense to me. We need to revisit that to get more retail investors qualified.

What would a better system look like?

Look at what they do in the European Union. Being “qualified” can be about money, but it can also be about education: Either your educational level, or you take some sort of test on the basis of finance. I think that'd be a great thing to encourage people to actually learn about this stuff. And then they would have access to the outsized returns now reserved for the wealthy.

—Peter S. Green

(This interview has been condensed and edited for length and clarity)

Big Businesses mentioned this week

$TSLA ( ▲ 0.52% ) , $DE ( ▼ 0.33% ) , $AAPL ( ▲ 1.75% ) , $CAT ( ▲ 1.69% ) , $SBUX ( ▼ 0.48% ) , $BA ( ▲ 2.76% ) , $STLA ( ▲ 2.27% ) , $VLKAY ( ▼ 0.99% ) , $AMZN ( ▲ 1.94% ) , $RIVN ( ▼ 0.13% ) , $GOOGL ( ▲ 1.77% ) , $OPENAI ( ▲ 14.54% ) I, $ANTHRP ( 0.0% ) , $BX ( ▲ 2.47% ) , $NEE ( ▼ 0.16% ) , $D ( ▼ 1.06% ) , $IRDM ( ▲ 0.57% ) , $META ( ▲ 0.57% ) , $IBM ( ▲ 3.96% ) , $GFS ( ▲ 2.15% ) , $GS ( ▲ 0.92% ) , $MS ( ▲ 0.81% ) , $SPCX ( ▲ 2.05% ) , $HD ( ▲ 1.0% )

This week, big business!

The usual suspects
Tech times
Trumplandia

The usual suspects

Whose wood chipper is it anyway? First came the farmers, now it’s the landscapers, who are suing John Deere $DE ( ▼ 0.33% ) , the agricultural equipment maker, for effectively fixing the price of repairs and maintenance on Deere’s big machines. By allowing only authorized repair firms access to the software tools needed to keep modern landscaping (and farming) machinery up and running, landscapers say Deere is forcing them to use franchised dealers who can set above market prices for parts and repairs. Farmers won a similar battle settlement fund. Landscapers now want the same thing. Right-to-repair activists have been battling everyone from Apple $AAPL ( ▲ 1.75% ) to toastermakers over the years, and have secured consumer protection bills in many states. But in big equipment, the right to repair hits at the very profit center of giants like Deere and Caterpilla $CAT ( ▲ 1.69% ) , whose profits come largely from spare parts. Shares in Deere were down 6% this week.

(Giphy.com)

Star(saving)bucks: The Seattle-based coffee giant says it’s laying off 300 corporate staffers, as part of CEO Brian Niccol’s push to recaffeinate the company. So far Niccol’s plan to focus on customers and the baristas who serve them seems to be paying off. Sales at U.S. stores opened for a year or more were up 7.1% in the first quarter from a year earlier, though last year’s sales were particularly weak. Niccol’s plan to remake the company by paying baristas more and renovating the often-bleak Starbucks $SBUX ( ▼ 0.48% ) shops is cutting into the company’s operating profits. Shares in Starbucks are up 25% this year.
Boeing’s sad Beijing Bag: As Boeing $BA ( ▲ 2.76% ) CEO Kelly Ortberg flew to China with President Trump last week, Wall Street investors and aviation watchers expected him to come back with an order for as many as 500 short-medium haul 757 Max 8s, and up to 100 787 Dreamliner and 777X long-haul planes. At an average sale price of $117 million to $135 million for the 737s, and $206 million to $338 million for the dreamliner, the whole order could have been worth up to $100 billion, cementing Beoing’s financial future. Instead, Ortberg came back with a deal for 200 planes. No small feat, but nothing like the permanent lifeline the original plan would have secured. Boeing shares fell as much as 10% after the smaller order was announced.
Carvana’s (glass)-towering ambitions: Carvana $CVNA ( ▼ 1.59% ) , the online used-car giant, is quietly staking out a large footprint as a new-car dealer for the brands of Chrysler parent Stellantis $STLA ( ▲ 2.27% ) . Carvana offers new-car buyers the same haggle-free experience they offer to those buying used cars from their glass tower car vending machines. To get there, Carvana has bought a half-dozen Stellantis dealerships. Small beans so far, but now as Volkswagen $VLKAY ( ▼ 0.99% ) and Amazon $AMZN ( ▲ 1.94% ) join Tesla $TSLA ( ▲ 0.52% ) and Rivian $RIVN ( ▼ 0.13% ) selling new cars directly to customers, it could be a growing market. Stellantis on Thursday announced nine new models selling for under $40,000 as part of a $70-billion plan to revitalize the firm. Stellantis lost $25 billion last year, and has struggled to integrate its French, Italian and U.S. carmakers.

Making Hydraulics Obsolete

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Tech times

Google’s AI Dominance: Fresh off a massive AI integration that’s introduced a new search box for the first time in a quarter-century, Google $GOOGL ( ▲ 1.77% ) is taking a hardshot at OpenAI $OPENAI ( ▲ 14.54% ) and Anthropic $ANTHRP ( 0.0% ) to become the world leader in consumer-facing AI. A slew of new AI functions (waaaay too many to talk about here, but none were used to write this newsletter, obviously…) unveiled at its annual developer conference are positioning Google to stay profitable (its 2025 operating margin was 31.6%). It’s also joined forces with PE group Blackstone $BX ( ▲ 2.47% ) in a joint venture to provide cloud services to AI startups, using $5 billion of Blackstone’s cash to buy chips and other tech from Google.
The Power Hour: Big data requires big energy, and the latest energy consolidation play is a big one: Florida-based NextEra Energy $NEE ( ▼ 0.16% ) has agreed to buy Virginia-based Dominion Energy $D ( ▼ 1.06% ) , for $67 billion in an all-stock deal that would create an East Coast giant to help power the AI boom. Dominion delivers power to 450-plus data centers, more than any other firm in the world, but its share price is down 13% over the past five years. That’s partly because of aging deals that sold power at pre-boom prices, and massive upfront investments in new powerlines and infrastructure. The combined company will have an enterprise value of $420 billion, giving it a lot more capital, just as new Virginia rules will force data centers into long-term contracts. NextEra’s offer was 23% above Dominion’s share price.
Remember Iridium? Three decades on, the original satellite phone company is still there, with a fleet of low-earth orbit satellites $IRDM ( ▲ 0.57% ) . Now, it’s spending $368 million to buy the rest of a joint venture that tracks ships and airplanes. But the big play is a satellite data service that could compete with Elon Musk’s Starlink. And if it can’t, the company has some pretty valuable licenses to a sweet part of the radio spectrum that could be a cash cow. Shares in Iridium were up 154% this year.

(Iridium)

Meta Layoffs. Another 10% of Facebook parent Meta’s $META ( ▲ 0.57% ) workforce will soon be pounding the pavement, with 8,000 layoffs (and no plans to fill 6,000 empty roles), as the company increases spending on AI, now set to hit $145 billion this year. CFO Susan Li said on an earnings call that execs “don’t really know what the optimal size of the company will be in the future.” That uncertainty and the vast AI spend have hammered Meta’s share price, with shares falling as much as 29% from January to March, before rebounding, but still down 8.2% this year, while the tech-heavy Nasdaq 100 index is up 15% this year. Layoffs are hammering the tech world, with at least 114,000 tech workers laid off at 148 companies this year, according to the optimistically named site, Layoffs.fyi
A Quantum of Handouts? In an effort to spur U.S. tech development, the Trump Administration is handing out $2 billion to nine tech forms racing to develop quantum computing. IBM $IBM ( ▲ 3.96% ) gets $1 billion, and all of the firms will hand the government a slice of their equity in exchange for the cash. Awardees include Global Foundries $GFS ( ▲ 2.15% ) , and a host of smaller firms, including closely held PsiQuantum, whose investors include Donald Trump, Jr.’s 1789 Capital. Their shares all shot up Thursday morning on news of the awards:

(Google)

OpenAI-and-Shut Case: It took an Oakland, California, jury less than two hours to throw out Elon Musk’s claim that arch-rival Sam Altman had stolen OpenAI $OPENAI ( ▲ 14.54% ) when he transformed it from a charity to a for-profit company. The jury ruled Musk’s lawsuit was filed too late, and Judge Yvonne Gonzalez Rogers dismissed Musk’s claims. The three-week trial riveted Silicon Valley with revelations that Musk romantic partner Shivon Zilis was consulting with him while serving on the board of OpenAI, and that Musk had in fact supported OpenAI’s shift to a for-profit model as far back as 2017. One memo from co-founder Ilya Sutskever described Altman as a liar who pitted executives against one another. OpenAI lawyers also contended that Musk brought the suit to protect his own AI firm xAI, that is lagging in the race for AI dominance. Musk did not take it well on Twitter, in a since-deleted post on X, calling Judge Gonzalez Rogers “a terrible activist,” adding, "She just handed out a free license to loot charities if you can keep the looting quiet for a few years!" The verdict paves the way for OpenAi to proceed with filing for an IPO, which CNBC says is being prepared with Goldman Sachs $GS ( ▲ 0.92% ) and Morgan Stanley $MS ( ▲ 0.81% ) , and could come as soon as this weekend, competing with Musk’s own IPO for SpaceX $SPACEX ( ▲ 2.0% ) , which includes xAI.

Trumplandia

Home Economics: The bombing campaign against Iran, and the knock-on effects on the global economy are starting to hurt the president’s economic standing with voters at home. A new poll out this week shows rising disapproval of the president’s approach to handling the economy, even among Republicans. Although 1% of Democrats apparently still think he’s doing a good job, apparently:
(Google)
New Fed chair Kevin Warsh will find it hard to lower rates thai year, as inflation hit an annualized 3.8% last month, nearly double the target 2% rate. “Steady labor market conditions alongside rising inflation risks increase the odds of a rate hike as the next policy move,” EY-Parthenon chief economist Gregory Daco wrote in a note on Wednesday. Housing problems are also hitting home: Rising mortgage rates, now at 6.63% for a conforming 30-year loan, sent mortgage applications falling 2.3% last week, while existing home sales rose only 0.2% in April. Mortgage rates had fallen below 6% just before the war with iran. Even Home Depot $HD ( ▲ 1.0% ) felt the pinch, with first-quarter profit falling to $3.3 billion from $3.45 billion a year ago. Its shares are down 26% since a peak last September. “When we talk to our customers, they do tell us that they have concerns over uncertainty and housing affordability,” CFO Richard McPhail told the Wall Street Journal. As if to illustrate the uncertainty, the number of homes facing foreclosure jumped 26% in march from a year earlier. Meanwhile, Treasury ills, the debt the U.S. government issues to finance the programs it provides, is getting more expensive to service, as investors see it as growing riskier. With the government now promising interest of 4.6% on 10-year bonds and 5.12% on 30-year bonds Thursday, the highest they’ve been in nearly 18 months. Democrats are leaning heavily on a quote Trump gave to news media last week saying “I don’t think about Americans’ financial situation” when negotiating with Iran — although the second half of that quote is a bit more balanced because the president said he’s focused on the elimination of the country’s nuclear capabilities.

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'They're Getting Their Money Back': A Trade Lawyer on the Tariff Collapse

Cheddar's Big Business This Week — Thu, 14 May 2026 20:30:00 +0000

In February, the U.S. Supreme Court ruled that the administration’s emergency tariffs were illegal, and it ordered the government to return the $165 billion it had collected so far. Last week, the U.S. Court of International Trade ruled that a set of replacement tariffs installed after the first set were overturned were also invalid. Liz Levinson co-leads the international trade practice at law firm Fox Rothschild in Washington. She sued the federal government on behalf of 100 companies over the IEEPA tariffs. BBTW columnist Peter Green spoke with Levinson about refunds, court rulings, and what's actually left of the tariff slate.

The courts have now struck down the two main pillars of the tariff program. Let's start with the IEEPA duties — what's happening on the ground right now?

On the IEEPA duties, the Customs Service has started refunding the money. There are actual live people who have received money starting on May 11th. The process is that they've created a mechanism for gaining the refunds that's broken up into different phases. We're now in Phase 1, which covers all shipments that have not been liquidated or that were liquidated within the last 80 days. The burden is on the importer to upload a spreadsheet — a spreadsheet of all their entries that fit those criteria, i.e., they've either not been liquidated or they were liquidated within the last 80 days.

What does "liquidated" mean in this context? It's not a term most people know.

It’s an important term for your readers to understand because “liquidated”, a lot of people think they import something into the United States, Customs clears it, they maybe sell it downstream, it enters commerce. But from Customs' point of view, it is not final. They can still come back and ask for more duties, and they have 314 days to do that. And that process of finalization is called “liquidation.”

So even after the goods have changed hands multiple times — bought, sold, consumed — the importer is still technically on the hook?

Yep. The importer of record — Customs can come back and say you owe more duties because they maybe disagree with the classification you brought it in under, or some other reason. Maybe there's anti-dumping duties or other kinds of duties that you didn't pay. Nothing is final until the shipment is liquidated.

And if something was already liquidated before you can file a Phase 1 claim?

If it was liquidated, you will get something back, but you may be part of Phase 2. This is Phase 1 — liquidated within 80 days. So if something was liquidated 90 days ago, you can't put in now in Phase 1, but you will get your refund eventually when they come up with Phase 2. If something has been liquidated and it's beyond that 80 days, you have to make sure you don't hit 180 days, because if it's more than 80 days but less than 180 days, you have to file what's called a protest. But basically, you're either in Phase 1 or you're in Phase 2.

So the refund goes to the importer. What about the retailers, the small businesses, the consumers who absorbed those higher prices?

It's just the importer, not the retailer. There's been a number of lawsuits. People suing the importer. Costco $COST ( ▲ 0.27% ) has been sued. I think Walmart $WMT ( ▲ 1.34% ) has been sued. FedEx $FDX ( ▲ 0.06% ) and DHL have been sued. If you had the foresight to make a contract with your provider saying, “if you get this money back, you've got to refund me,” but otherwise [the importer] has no legal obligation [to pay you back].

Why did the courts strike down the IEEPA tariffs in the first place?

They found them unconstitutional. The Constitution, Clause 8 of Section 1 of the Constitution, gives Congress the authority to levy taxes, and that includes import duties. The Court found that the president doing it was illegal. Unconstitutional. They found that you could not levy taxes or import duties under any circumstances under IEEPA. IEEPA does not use the word taxes or customs duties anywhere in the provision. That's meant for other purposes.

And then the administration tried a different legal basis — Section 122 — to impose a blanket 10% tariff on imports. What happened there?

The Court of International Trade in New York ruled that that is illegal. Section 122 allows the president to levy taxes when it's necessary to correct a balance of payment problem with another country. And the administration did not find any of these balance of payment inequities with any other country. And that was a prerequisite. The administration just didn’t want to do the homework.

What's actually left standing, then? What tariffs are still in effect?

There's the normal tariffs, which we refer to as the most favored nation tariffs. Those are approved by Congress. Now the administration has brought some more, 76 more Section 301 cases that are being considered now by the Office of the U.S. Trade Representative. The administration is hoping to replace all these tariffs with new Section 301 tariffs. The IEEPA duties are not in effect.

And the 10% Section 122 tariff — is Customs still collecting it while this is being litigated?

The Court said, yes, we find them illegal, but we're going to allow Customs to continue to collect the 10% while this is being litigated. And ultimately, maybe it goes up to the Supreme Court, and they're going to have to have another refund system just like they did for IEEPA.

You filed suit on behalf of 100 companies. What are the stakes for your clients?

The largest is expecting $8 million back in refunds, the smallest $1,500.

Have any of your clients been casualties of this — gone out of business entirely?

Some of them did, because they couldn't afford to pay the tariffs at the time. A toy company who were bringing in all the toys from China and South Korea.

—Peter S. Green

(This interview has been edited and condensed for clarity and length)

Big Businesses mentioned this week

$GME ( ▲ 3.73% ) $EBAY ( ▲ 2.59% ) $SHAK ( ▲ 3.16% ) $JBLU ( ▲ 0.23% ) $UAL ( ▲ 3.13% ) $DEL ( 0.0% ) $AAL ( ▲ 1.25% ) $COST ( ▲ 0.27% ) $WMT ( ▲ 1.34% ) $FDX ( ▲ 0.06% ) $BF.A ( ▼ 1.26% ) $RGR ( ▲ 0.35% ) $NFLX ( ▲ 1.83% ) $CMCSA ( ▲ 0.12% ) $PSKY ( ▲ 2.12% ) $DIS ( ▲ 0.69% ) $SFTBY ( ▲ 2.07% ) $INST ( ▲ 0.09% ) $LMT ( ▼ 1.12% ) $TSLA ( ▲ 0.52% ) $NVDA ( ▼ 0.03% ) $AAPL ( ▲ 1.75% ) $AIFC ( ▼ 0.69% ) $DAL ( ▲ 2.13% ) $CBS ( 0.0% ) $POLYMARKET ( 0.0% )

This week, big business!

The usual suspects
The short stack
Trumplandia

The usual suspects

eBay to Gamestop: Sorry, I gotta wash my hair tonight. Calling GameStop $GME ( ▲ 3.73% ) CEO Ryan Cohen’s surprise $56 billion cash and stock offer “neither credible nor attractive,” Ebay‘s $EBAY ( ▲ 2.59% ) board said it had “thoroughly reviewed your proposal and has determined to reject it,” citing the unlikelihood of the deal getting financed (GameStop’s market cap is just $10.3 billion) and its lack of confidence in Cohen’s management ability. Cohen told eBay’s board he wanted to make the merged company into the pre-eminent e-commerce site for collectibles, gaming and enthusiast communities, and had a promise of a potential $20 billion in financing from TD Bank of Canada, if GameStop got an investment grade rating from two out of three top credit rating forms. Standard & Poor’s withdrew its credit ratings from GameStop in 2022 at the company’s request. Cohen told the FT last week that if eBay rejected his bid he’d make a hostile bid. “I’m not going to take no for an answer,” he said. “I’m a pain in the ass.” Gamestop shares fell more than 9% this week, while eBay shares have climbed nearly 6%.

IPOs Run on Dunkin ': Dunkin’, the chain formerly known as Dunkin’ Donuts, is going public in an IPO of parent Inspire Brands, which also owns Arby’s, Buffalo Wild Wings, Rusty Taco and Sonic Drive-In. With some 33,000 outlets driving $33 billion in revenue, an investor could be forgiven for thinking the IPO was to raise cash for expansion. But no, the $2 billion Inspire plans to raise will help pay back some of the money it owes its creator, PE fund Roark Capital, for buying Dunkin and the other brands in the first place. And while you, too, could own a Munchkin-sized stake in the company, as financial commentator Aalok Rathod noted in a post this week, “When this IPO prices, remember: you're not investing in the future of fast casual dining. You're refinancing someone else's acquisition spree, one Boston Kreme at a time.”
(Giphy)
Shaken Shack: Shares in bourgois McDonald’s upgrade Shake Shack $SHAK ( ▲ 3.16% ) plunged as much as 30% late last week, after the company said it lost money as foreign tourists avoid the U.S. over visa issues, winter storms cut into business, beef prices rose by about 17% and investments in new locations and products haven’t yet paid off. By Thursday, shares were down 55% from their peak last July.
Can Spirit resurrect JetBlue? All the focus on the demise of Spirit may have left you forgetting the trouble that for the past decade has beset JetBlue $JBLU ( ▲ 0.23% ) , and seen the airline lose 80% of its market value. With less than a 5% share of the U.S. market, it’s too small to compete with United $UAL ( ▲ 3.13% ) , Delta $DAL ( ▲ 2.13% ) and American $AAL ( ▲ 1.25% ) , and a merger with Spirit several years back was blocked by regulators who saw the merger would have removed the pressure for cheap flights that Spirit imposed on the market. JetBlue has lost money every year since 2019, accumulating about $8.5 billion in debt. Well, Spirit is gone, and JetBlue may just have found salvation, taking some of its slots and flight routes, in the week since Spirit folded its wings and stopped putting downward pressure on airfares. JetBlue now has its eye on Spirit’s Ft. Lauderdale home base, say reports.
Polymarket Insiders: Sometimes it pays to crunch the numbers: The New York Times did a deep dive into the numbers around Polymarket $POLYMARKET ( 0.0% ) wagers on global events and other happenings that have garnered outsized returns on not-very-sure bets. The upshot: More than 80 Polymarket users have placed bets with “suspicious characteristics,” the paper reported, including 38 “whose well-timed wagers” have gone largely unnoticed, among them a bet on Israel's strike on Iran last year and one on crypto regulation. The president’s son, Donald Trump, Jr., has a multi-million-dollar stake in Polymarket through his venture capital investment firm and the investment coincided with laxer regulation on the company.

The CEOs of NVIDIA, Tesla, & Microsoft Agree on One Secret

This year, the world’s biggest tech CEOs all said the same thing:

NVIDIA’s Jensen Huang called robotics a “once-in-a-lifetime opportunity.”

Microsoft’s Satya Nadella said 2026 is when AI will deliver real impact.

Tesla’s Elon Musk predicted, “AI and robots will make everyone wealthy.”

That opportunity’s arrived. Miso Robotics is leading the charge in bringing robotics solutions to the $1T fast-food industry.

Miso’s Flippy Fry Station AI robot has already logged 200K+ hours for fast-food brands like White Castle. Now, Miso has added iconic restaurant brands like Jersey Mike’s, Jamba, and Cinnabon as new customers.

With a new NVIDIA collaboration, strategic investment by industry leader Ecolab, and a growing manufacturing partnership, Miso can now scale to meet 100,000+ US fast-food restaurant locations, a $4B/year revenue opportunity.

Now, you can invest alongside Ecolab and become a Miso shareholder today. Even better, you can unlock free additional bonus stock for a limited time. Become a Miso investor today.

Become a Miso Investor Today

^{This is a paid advertisement for Miso Robotics’ Regulation A offering. Please read the offering circular at}^{invest.misorobotics.com}^.

END OF ADVERTISEMENT

The short stack

Jack Daniels goes Cold Turkey: Just a couple weeks after turning down a $15 billion stock and cash offer from French drinks maker Pernod-Ricard, Louisville’s Brown Forman $BF.A ( ▼ 1.26% ) the owners of Jack Daniels, see their future neat: They’ve turned down a $15 billion all-cash offer from privately held fellow bourbon-maker Sazerac. The sale would have created a colossus with about 30% of the U.S. whiskey market, giving it significant pricing power. The news is surprising, given that family-controlled—and run—Brown Forman has seen its share price slide by about two-thrids in five years, and observers largely fault the abilities of the family’s chosen executives to run the distiller. With both suitors now sent packing, the Browns appear ready to go it on their own. Brown Forman shares are down 5% since the news broke.
Buzzcut: Byron Allen says he’s buying control of the aging cat-meme news website Buzzfeed, just weeks before his “Comics Unleashed” is supposed to replace Stephen Colbert’s “Late Show” on CBS $CBS ( 0.0% ) . Allen will become BuzzFeed’s CEO and chairman, replacing founder Jonah Peretti, who said earlier this year that BuzzFeed is losing money, having piled up more than $50 million in debt. Allen said he plans to make the company succeed by beefing up BuzzFeed’s local U.S. news coverage and posting more videos made by BuzzFeed readers. Time to tee up your cat videos again?
Shotgun wedding; Well, not quite, but Italian gunmaker Beretta, the maker of James Bond’s original gun, before it was replaced by the Walther PPK in the opening scenes of the first movie, 1962’s “Dr. No”, has officially joined forces with U.S. gunmaker Ruger $RGR ( ▲ 0.35% ) . A testy takeover bid by the family-owned Italian gunsmith has ended with Beretta poised to take a 25% stake in U.S.-listed Ruger, gain two seats on Ruger’s nine-member board and a fast track into the world’s largest gun market, and have a chance to launch a tender offer for the whole company. Shares in Ruger have lost about half their value in the last five years, and the company posted a net loss in 2025 for the second consecutive year. Perhaps you’d be better off with a Walther, 007?

Streaming steals TV ads: In mid-May every year, New York’s theaters fill up with TV executives and advertisers for the so-called “upfronts,” where the networks and streaming platforms try to sell advertisers on their upcoming programming. Now, as “streamflation” hits the main platforms, including Netflix $NFLX ( ▲ 1.83% ) , Comcast’s $CMCSA ( ▲ 0.12% ) Peacock, Paramount‘s $PSKY ( ▲ 2.12% ) Paramount+, and Disney’s $DIS ( ▲ 0.69% ) Disney+, more viewers are opting for cheaper or free ad-supported streams. A Morning Consult survey showed 56% of adults, led, of course, by the ad-aware Boomers at 67%, prefer lower-cost ad-filled streaming plans. That’s got advertisers moving their dollars from the old linear TV networks to streamers, with the two expected to split the $40 billion U.S. ad pot in roughly equal parts by 2029, as the Wall Street Journal reports.
Money for nothing? As OpenAI raises money at ever-loftier valuations, but is still years away from a profit or an IPO that would set its fair market value, early investors are recording a paper killing. Take SoftBank $SFTBY ( ▲ 2.07% ) , whose 13% stake in OpenAI jumped in value by $44 billion, including a $25 billion jump in the first quarter. That’s helped push up Softbank’s share price by more than 200% in the past year. But much of SoftBank’s investment in OpenAI is borrowed, and if a planned OpenAI IPO this year falls short, SoftBank could see a wipeout like the one it took when it backed office company WeWork a decade ago.
Hackers look for a bigger Canvas: Millions of students across the U.S. got locked out of their main instructional platform, Canvas, in the hacking equivalent of stealing a schoolkid’s lunch money. Ransomware group ShinyHunters hacked into Canvas parent Instructure $INST ( ▲ 0.09% ) , stealing billions of messages and more than 275 million personal records. The hack was vast. 41% of U.S. colleges and universities use Canvas, and some 8,800 school districts and education platforms use it. Statewide tests in New York were postponed. Instructure says it reached an agreement with the hackers, but it has not revealed how much it paid to get the data back.

Trumplandia

The China Gambit: With president Trump in China, there’s a lot riding on his talks with Chinese leader Xi Jinping. At the heart of it is avoiding two wars: a hot war over Taiwan, the democratic island that China considers part of its territory, and which has long been a U.S. ally and a big buyer of U.S. arms (Taiwan has bought nearly 200 U.S.-made Lockheed Martin $LMT ( ▼ 1.12% ) F-16 fighter jets), and a trade war. Emboldened by the U.S. failure to bring Iran to heel, the hot war may still be on the burner, but both sides see the trade war as a bigger threat to their countries. Xi appeared to accede to Trump’s demands that China open its markets to more U.S. products, telling Trump China will “open wider” to U.S. companies. Trump was accompanied by Tesla $TSLA ( ▲ 0.52% ) boss Elon Musk, Nvidia $NVDA ( ▼ 0.03% ) CEO Jensen Huang, and outgoing Apple $AAPL ( ▲ 1.75% ) CEO Tim Cook. Boeing $BA ( ▲ 2.76% ) chief Kelly Ortberg is expected to sign some large orders for planes on the trip. Also on the trip with those CEO’s: Eric Trump, who the Financial Times reports is exploring a deal with a Chinese chipmaker linked to the ruling Communist Party. Eric Trump is an advisor to Alt5 Sigma (also known as AI Financial Corporation $AIFC ( ▼ 0.69% ) ), a Las Vegas-based fintech company whose board chair is Trump aide Steve Witkoff's son Zach. Alt5 and Hangzhou-based Nano Labs are in talks to build cloud computing centers in the U.S.
The war isn’t helping the U.S. economy: The Consumer Price Index rose 3.8% in April from a year earlier, with higher gas prices replacing tariffs as the key inflation driver, while wholesale prices, measured by the Producer Price Index, rose 1.4% in April alone, up 6% from last year. And it’s not just gas. Even tomatoes are getting pricer, up 40% in April from last year, with growers blaming intense rains, crop disease, a new 17% tariff, and surging gas costs for bringing tomatoes to the U.S. from Mexico. High gas prices also appear to be hammering beer sales, according to Nielsen data, with sales at convenience stores and gas stations down about 9% in early May. In California, where gas prices are the highest in the nation, beer sales dropped 16% in April. The price uncertainty is also hammering the real estate market, where most Americans make their biggest purchase ever: Existing home sales were flat in April, after dropping 3.6% in March, the National Association of Realtors reported. President Trump says he knows how to bring down gasoline prices, which are up more than 50% since the U.S. and Israel launched their bombardment of Iran. Trump says he’ll cut the 18.4 cents-a-gallon federal excise tax on gasoline. But that’s hardly going to make a dent in gas prices. It would cut costs by 4%, lowering the average price to $4.32 a gallon.

(Google)

The trials and travails of Kevin W. So after months of waiting, President Trump’s pick for Fed chair, Ronald Lauder's son-in-law Kevin Warsh won Senate confirmation (54-45) with Pennsylvania Sen. John Fetterman crossing party lines to support Warsh. Trump’s arch-Fed-enemy Jay Powell will stay on as a governor for another two years, and adding Warsh to the board means Trump’s temporary appointee, Stephen Miran, will have to step down, so there’s no guarantee of a consensus to lower interest rates, which could spur economic growth and/or a recession depending on which analyst or Fed board appointeee you’re talking to. “The economy is not in a “golden age” of high productivity growth and low inflation,” as Warsh told senators at his confirmation hearing, writes Fed watcher Ethan Harris. That is likely to leave Warsh, who’s only got one vote on the rate-setting Federal Open Market Committee, avoiding a rate cut in order to tame inflation.

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SpaceX's $2 trillion IPO: Should we be bullish or bearish?

Cheddar's Big Business This Week — Thu, 07 May 2026 20:30:00 +0000

Raising $50 billion, turning SpaceX into a public company is expected to be the largest initial public offering in history. A lot of people stand to get very rich, with the company’s overall value expected somewhere between $1.5 trillion and $2 trillion, an astronomical sum for a niche company that is quite literally shooting for the stars. Early investors in SpaceX’s capital stack could make as much as 20x their initial investment.

(Google)

Musk’s plan to offer as much as 30% of the shares to individual investors and his followers would seem like an opportunity for a lot of investors to cash in on a company that could grow to a $7 trillion market cap in the next decade. But is the SpaceX IPO a good deal for individual investors? Can the company live up to the hype?

We spoke with bulls and bears.

The bull case for the company is straightforward. SpaceX has turned what was a bespoke business, launching rocket ships, into an industrial operation, launching 165 Falcon 9 missions, about 52% of all global orbital launches, reducing the cost of a launch by about 65%, according to Pitchbook analyst Franco Granda. Starlink has been remarkably profitable, doubling the number of customers last year to nearly 10 million and generating $5.8 billion in EBITDA on $10.6 billion in revenue.

SpaceX’s vertical integration reduces costs, and Musk’s expertise in manufacturing with Tesla suggests a lean, AI-powered manufacturing model will bring costs down further, and open more markets for the company.

What about the bear case? The biggest distraction could be the way Musk has used SpaceX to wrap up some of his less successful ventures, including Twitter and xAI. SpaceX spent $250 billion, most of it in the form of shares to be cashed out at the IPO, to buy xAI and Twitter. But xAI threw off only about $500 million last year, and now SpaceX says it will pay as much as $60 billion for AI company Cursor.

“The con case is much easier to make nowadays,” Granda said in an interview. He said he first thought SpaceX’s success came from being “the dominant supplier of space launches, plus the leading provider of satellite based Internet.” But the xAI and Cursor tie-ups don’t add value, he said, even if SpaceX solves a host of technical issues to put solar-powered, space-cooled AI data centers into orbit. In fact, Granda said, the offer for Cursor, plus a deal announced this week to lease much of xAI’s Colossus data center to Anthropic, shows xAI has no clear horizon, and that should worry retail investors. “It's a red flag. Because it just says, you're kind of making it up as you go,” said Granda.

“There’s risk because of where XAI sits in the competitive landscape today. No matter how much you embed Grok into your company, if it is a lagging model, you just won't get all the juice out of it,” Granda added.

Musk’s promises of ever greater things to come, like colonizing Mars or the end of work, might keep the stock at a sky high valuation, he said. But Musk’s non-stop X-posting and his pronouncements on everything from politics to his current feud with OpenAI chief Sam Altman, also pose a risk, one that Granda crunched the numbers on when he looked at Tesla stock movements over several years: “Actual business-related events drove the stock up 12% on average. But when Elon was involved, it was largely negative, and it was down 5%.”

Still, many investors may not have a choice. If you’re in an exchange traded fund that tracks the Nasdaq, new rules will have SpaceX in the index within 15 days, pushing many investment funds to buy and forcing up the price.

Gabriel Shahin, whose Falcon Wealth Planning was an early investor in SpaceX through a Special Purpose Vehicle, says despite the key person risk that it’s all riding on Musk, buying into the SpaceX IPO is probably a good move for retail investors. “It’s priced to perfection,” said Shahin, of the estimated $600 IPO price. For Shahin, SpaceX is a massive growth story, and investors should see themselves buying a piece of what may well be an effective communications monopoly as Musk brings SpaceX mobile phones on the market.

“He could be our modern day Lex Luthor,” Shahin said in an interview. “He'll know all of our data, all of our information. He can move satellites as fast as he wants for imagery in space. He has X that is real time news and information. This has all the potential in the world to be the largest company ever.”

Not that anyone wants a Superman villain to run the world, but as Shahin said in an interview, “From an investor point of view, it's a good thing. I think we want to be on the side of somebody who's changing the world.”

So will SpaceX shares ever come back down to Earth? Granda doesn’t think so.

One other big worry is: How big is too big? Jay Ritter, director of the IPO Initiative at the University of Florida’s Warrington College of Business, notes that the sheer size of the IPO, at more than 100 times trailing revenue, limits the upside for investors: “For almost all of the companies that have gone public at such a high multiple, everything has not gone quite right, and so the average return has underperformed the market by quite a bit, and that’s where I have reservations about SpaceX’s valuation.”

If retail investors are going to buy SpaceX — and shares are thought to be coming online as early as June — they ought to be prepared to hold the stock for five years or more. Early investors won't be able to sell their shares for six months according to initial reports of the IPO terms, so once the lockup ends, many of the investors may seek to cash out those 20X gains. And the low float - just 2.5% of the company’s initial valuation, means small share sales could see the stock price fluctuate wildly for the first couple of years, until the business model is proven and cash flow stabilizes.

The question for most investors may be whether investing in an Elon Musk company is worth all the agita that the company’s founder brings with it. From a pure stock price perspective it seems the short-term answer is, most likely, that it is. (Although this certainly doesn’t constitute financial advice). But don’t expect a comfortable ride.

—Peter S. Green

Big Businesses mentioned this week

$BP ( ▲ 0.04% ) $SHEL ( ▲ 0.84% ) $GME ( ▲ 3.73% ) $EBAY ( ▲ 2.59% ) $AMZN ( ▲ 1.94% ) $WMT ( ▲ 1.34% ) $BRK.B ( ▲ 0.67% ) $HSBC ( ▲ 1.54% ) $APO ( ▲ 0.84% ) $BCS ( ▲ 1.87% ) $MS ( ▲ 0.81% ) $DIS ( ▲ 0.69% ) $HOG ( ▲ 3.38% ) $SAVEQ ( ▲ 0.43% ) $GS ( ▲ 0.92% ) $BX ( ▲ 2.47% ) $AAPL ( ▲ 1.75% ) $META ( ▲ 0.57% ) $FIS ( ▲ 0.16% ) $IAC ( ▼ 0.08% ) $PSKY ( ▲ 2.12% ) $WBD ( ▼ 0.57% )

This week, big business!

War Story
The usual suspects
Media Mirror

War Story

Strait Talk: As Winston Churchill said about peace negotiations, “Jaw, jaw is better than war, war,” (it even rhymes, if you imagine Gary Oldman saying it while wearing too much makeup). With Iran and the U.S. appearing to be engaged in some kind of talks near week’s end, oil prices have dropped about 15% from late April highs, as Brent crude fell to about $98 and West Texas intermediate dropped below $92 a barrel. The S&P was up about 2% since last Friday, while the Dow stayed flat. The U.S. even guided a U.S. flagged tanker through the Strait of Hormuz. British Petroleum $BP ( ▲ 0.04% ) quarterly profit doubled to $3.23 billion from a year ago, and Shell’s $SHEL ( ▲ 0.84% ) profits zoomed to $6.92 billion from $5.58bn. Congressional Democrats are talking about a windfall profits tax and U.S. refiners are not planning to plug the supply gap (as much as 20% of global oil supply is cut off because of the blockade in the Strait of Hormuz) because prices may well fall in the year or more it would take to get new wells online.

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The usual suspects

More than a meme Stock? GameStop $GME ( ▲ 3.73% ) , the brick and mortar video game retailer (market cap $11.3 billion) said it’s making an offer for Ebay $EBAY ( ▲ 2.59% ) (market cap $48.13 billion), the ailing e-commerce company that pioneered the online garage sale, only to lose its top spot to Amazon $AMZN ( ▲ 1.94% ) and wind up in third place behind Walmart $WMT ( ▲ 1.34% ) . As GameStop CEO Ryan Cohen tells it, the deal is a right-swipe on M&A tinder: GameStop’s 1600 retail outlets and Cohen’s management skills will revive eBay’s fortunes and let it go head-to-head with Amazon. But GameStop’s $9 billion cash-on-hand make swallowing eBay (market cap $46 billion) a bit like a python swallowing an alligator. And then there’s GameStop’s own checkered history: The company nearly went bust but was saved by fans who turned it into a meme stock, taking on short sellers, who finally abandoned their, er…game after losing $20 billion in 2021. The eBay bid came in for a reality check when Cohen was interviewed by CNBC’s Andrew Ross Sorkin, who asked Cohen where he would find the money. Cohen kept insisting he didn’t understand the question, while Sorkin kept adding up the numbers and the company’s stock took a dive:

Berkshire without Buffett: Warren Buffett is a tough act to follow. Just ask Greg Abel, the Berkshire Hathaway’s $BRK.B ( ▲ 0.67% ) CEO, who hosted his first annual meeting since the Sage of Omaha retired. Buffett was famous for his folksy meetings and long-winded annual letter to shareholders, and the annual meeting attracted thousands of small holders of the company’s Class B stock, earning the meeting its nickname as the Woodstock of finance. Abel’s dry runthrough of the company’s holdings had some attendees walking out partway through his presentation. Shareholders are hoping that Abel’s strong performance will help Berkshire’s shares recover some of the 13% they lost since Buffett announced his departure last May. Abel said he’ll stick to Buffett’s famed value investing principles, while adding to Berkshire's $380 billion cash pile, and waiting for the kind of undervalued strong businesses that kept the firm growing for decades. But that may take some time. Buffett told CNBC during the meeting that the markets are becoming a casino. “We’ve never had people in a more gambling mood than now,” he told Becky Quick.
Banking bummers: The private credit crisis just claimed a few billion dollars in damage: The collapse of British mortgage lender Market Financial Solutions has forced a slew of top banks to report massive losses on loans they are unlikely to recover. They include HSBC $HSBC ( ▲ 1.54% ) which has just had to write off $400 million of the $540 million it loaned to MFS through Leon Black’s Apollo Global Management $APO ( ▲ 0.84% ) and its Atlas SP subsidiary. Last week Barclays $BCS ( ▲ 1.87% ) wrote off $300 million that it had loaned to MFS. At the heart of the collapse is the lack of regulation and transparency in the private credit market, where outsized returns carry outsized, and often underreported, risk. In this case, there was an apparent fraud in which MFS pledged the same collateral to more than one lender, creating the illusion that it was more solvent than it really was.
Morgan Stanley’s Offshoring Oops: In an apparent effort to cut costs, Wall Street bank Morgan Stanley $MS ( ▲ 0.81% ) hired junior bankers from across Europe, moved them to low-cost offices in Budapest, and had them working on sensitive financial deals for U.S. clients, without the necessary licenses or supervision. The Wall Street Journal has the details on the junior bankers, who were promised transfers to New York or London but were paid as little as $1,755 a month, a fraction of what junior bankers get in New York, and were expected to work through the night to support colleagues in the big apple. Now, the U.S. Financial Industry Regulatory Agency is investigating.
The Great Mickey Makeover: Disney $DIS ( ▲ 0.69% ) CEO Josh D’Amaro said the storied entertainment firm is going to focus on streaming, making Disney+ “the primary relationship between Disney and its fans,” and promising not to sell off its linear TV networks, including ABC and ESPN. At the top of D’Amaro’s to-do list: Cutting the churn on Disney+ subscriptions. That means more short-form content and better recommendation tools to keep more eyeballs on Disney’s screen longer. Long-term, that’s all going even more interactive with games and theme park visit planning tools. D’Amaro said he’s also still looking at AI options. The market seems to approve, with shares up 7% on news that earnings rose 7% and EPS was up 8%. The stock is still down about half from its highs in 2021, though, so D’Amaro has a long way to go:

(Google)

There’s a Harley in your future: Harley-Davidson’s $HOG ( ▲ 3.38% ) new CEO wants to sell you a cheaper hog. Boosting sales by bringing in younger riders is the key to the company’s future, he says. But Artie Starrs’ plan also runs right up against Harley’s biggest historic selling point: Most of Its bikes have been made in the U.S.A. until now. So: A new $10,000 Sportster, with a more efficient engine, will be made in York, Pennsylvania. But the $6,000 Sprint, with a 440 cc engine, will be made in Thailand. Harley’s stock has lost half its value in the past five years, but it’s up 35% since mid-March on the plans.
Spirit gives up the ghost: It’s official. Spirit airlines $SAVEQ ( ▲ 0.43% ) ceased operations last weekend, amid a 78% rise in jet fuel prices due to the Iran War, and objections by some creditors to the Trump Administration’s planned $500 million bailout for the discount carrier. On its last day of service, April 30, Spirit flew 50,000 passengers. Its demise reduces pressure on rival airlines to provide low-cost fares on key routes, meaning all our air fares are likely to go up.

Tech talk

Now it’s OpenAI’s turn to release its AI supercybervillain: the lovingly named “GPT-5.5-Cyber,” which CEO Sam Altman said will be released shortly to “critical cyber defenders” before its general release, just as Anthropic last month held back its Claude Mythos Preview. The news eases some fears that AI firms lack the chips and data centers needed to power their models for enough clients to make back the prolific amounts they are spending on infrastructure. It also eases some fears that OpenAI is spending too heavily and moving too slowly in the battle for the first Super-powered Gen AI to hit the market. Meanwhile, all that spending is drying up the market for solid state hard drives, and raising prices for groups like Wikipedia parent Wikimedia and the Internet Archive. As 404media reports, a 2TB external Samsung SSD sold last fall for $159 and now costs $575:

(Google)

AI tools are changing so fast that even top tier investment companies like Blackstone and Goldman Sachs $GS ( ▲ 0.92% ) can’t keep up. So they’re creating their own help desk, a $1.5 billion joint venture with Anthropic to speed the adoption of Claude AI in their portfolio companies and their own operations. Blackstone $BX ( ▲ 2.47% ) and buyout shop Hellman & Friedman will each put up $300 million and Goldman’s investment funds will put up $150 million for the tech assistance. The new firm will place engineers inside client companies to help implement AI workflows.
Deep Cash? Remember DeepSeek, China’s budget AI that was really built and trained with ChatGPT? Well it’s baaack, baby, with a “few billion dollars,” from Chinese state-backed venture firms, the Wall Street Journal reports. The influx would value Deep Seek at $50 billion. For Beijing, it’s a way back to a commanding position in the AI-led future, where U.S. firms including OpenAI, Anthropic and xAI (a.k.a. Grok) dominate.
Meanwhile, AI is having its day(s) in court. Apple $AAPL ( ▲ 1.75% ) has agreed to pay $250 million to iPhone users who were told their iPhone 15s and 16s would run with Apple Intelligence. But Apple hit some speed bumps while rolling out its AI, and the features weren’t available on those phones. Indigenous actress Q’orianka Kilcher has sued Disney $DIS ( ▲ 0.69% ) and director James Cameron for using her likeness to create the face of the blue-skinned warrior-princess Neytiri (which happens to be phonetic Greek for “Yes, cheese”) in the 2009 film Avatar. “In the age of A.I., our likeness is no longer safe,” Kilcher, 36, told the New York Times “This case is about the future of identity.” Kilcher says Cameron told her she “inspired” Neytiri’s look. Meanwhile, a bunch of publishers and novelist Scott Turow have sued Meta $META ( ▲ 0.57% ) , saying the social media company illegally used their writings to train Meta’s AI. Meta argues that courts say using copyrighted material for training is “fair use.”
In case you planned to hide those Bitcoin profits, Anthropic and banking software provider Fidelity National Information Services $FIS ( ▲ 0.16% ) are launching a new AI software suite that monitors bank accounts for evidence of financial crime. The tool won’t just alert banks to potential midsdeeds, it will amass evidence that prosecutors can use in criminal cases. So, watch out!

Media Mirror

Is a new media mogul battle brewing? IAC $IAC ( ▼ 0.08% ) chief Barry Diller says he wants to buy CNN before Paramount $PSKY ( ▲ 2.12% ) chief David Ellison “ruins” it by merging the cable news giant with Paramount’s crumbling CBS News. Diller said he talked to CNN’s current owner Warner Bros. Discovery $WBD ( ▼ 0.57% ) before it agreed to sell itself to Paramount. “I would do it tonight,” Diller said of buying CNN, adding that CNN is ripe for innovation. He may get his chance: The Paramount deal is beginning to look shaky, as Middle East sovereign wealth funds that also pledged cash for the purchase redirect their money away from the U.S.
Murdoch Junior? Rupert Murdoch’s least-favorite son James (the leftish-leaning one who sued over dad’s decision to hand the media company to rightwing son Lachlan) is building his own media empire. Multiple news reports say he’s in discussions with Vox to buy part or all of the podcast and publishing firm that includes SB Nation and New York Magazine from current publisher Jim Bankoff. Murdoch Junior reportedly has over $1 billion in cash after settling up with Dad over ownership of News Corp, and evidently he’s eager to spend it.

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OPEC shakeup: Why the UAE's departure is a distraction from the real oil price crisis

Cheddar's Big Business This Week — Thu, 30 Apr 2026 20:30:00 +0000

How many oil crises can the world track at once? There’s the supply chain crisis, the price crisis, and now the OPEC membership crisis, as the United Arab Emirates says it will leave the energy cartel. To understand what it all means, BBTW columnist Peter Green spoke with Boston University oil expert Prof. Robert Kaufmann.

This interview was condensed and edited for clarity

Peter Green: When the UAE says it may pull out of OPEC. Is this a big deal for oil prices?

Robert Kaufmann: It’s an interesting story, but I don’t think it’s going to have much impact on price. If you look at UAE, it produces around three and a half million barrels per day. And it had about a little over a million barrels a day in what we call shut-in, or spare capacity. It shut in some supply to help keep oil prices high, but it’s not like the UAE was either a big member of OPEC or shouldering a big portion of the shut-in capacity. Remember, the world oil market has never really been a free market. The period that my parents remember as the golden age of petroleum, the 1950s and 60s, when oil prices were low and stable, that was actually a noncompetitive market in which the Texas Railroad Commission acted like a pre-OPEC. It decided how many days per month oil fields in Texas could pump oil. And its goal was to stabilize oil prices, to shut in production to balance supply and demand. When OPEC started, that was their original goal, to balance supply and demand. But they quickly realized, “we have the upper hand here,” and they were able to raise oil prices. Recently, OPEC is back in that role of the Texas Railroad Commission, balancing supply and demand, shutting in some capacity. So if OPEC really falls apart, which some people seem to be rooting for, consumers are going to lose because oil prices will go back to fluctuating wildly.

Who will that hurt?

The biggest losers will be U.S. frackers, because fracking requires a fairly high price for them to make a profit on. And if oil prices are going to fluctuate greatly, frackers are not going to invest huge sums of money drilling wells that may or may not be profitable. So the end of OPEC is not good for U.S. consumers or U.S. producers. But I do not think that UAE leaving spells the end of OPEC.

Other countries, including Indonesia, have left OPEC, and four of the world’s top five oil producers aren’t members: The U.S., Russia, Canada and Iraq. But why would the UAE leave OPEC?

OPEC’s goal is to stabilize oil prices and defend an official price. And the way they do that is they get together every three months, and say, oh, we think the world needs, you know, 30 million barrels per day of oil from OPEC to keep supply and demand in balance. But we as a group can produce 35 million barrels per day. So what they’re going to then do is ration production among the members. They’re going to tell them, you shut in half a million barrels per day, you shut in a million barrels per day. And so that’s why all these countries have, a level of production and spare capacity. By leaving OPEC, they will no longer have to abide by a quota, so they can produce more oil and in effect free ride on the fact that the Saudis are shutting in production.

Does OPEC still have enough weight to set the price of oil?

Let’s be very clear. It doesn’t set the price. It can influence a range of prices. The price of crude oil is set on very thickly traded markets like the New York Mercantile Exchange, where you buy and sell futures contracts for what’s known as West Texas Intermediate, or the International Petroleum Exchange, where you buy and sell futures for Brent crude. OPEC can influence what traders are willing to buy and sell at, but it’s not like the olden days where they set an official price. They don’t have that power.

Looking beyond OPEC, what happens if the current oil shock keeps going?

If the Strait of Hormuz remains shut for the next six months, crude oil could be $200 a barrel. And there will be shortages. You know, you will only be using crude oil for the most necessary uses because it’ll be $200 a barrel. So you won’t be flying anywhere on vacation,and you’ll be setting your home thermostat at 55.

Would the United States actually face shortages, or would the impact be worse elsewhere?

In the U.S., we probably won’t have shortages, per se, because we produce a lot of oil domestically. But I’m not sure I would fly to Europe this summer. Their airports are starting to run out of jet fuel. Unlike being in California or Florida, if you’re stuck in Denmark, there’s no other way to get home than flying.

If the crisis ended quickly, how fast would oil prices come down?

So, you’ll see a big jump down. My guess is if oil prices are now $105, it’ll probably come down into the $80s. Once oil starts flowing again, yes, people want it for their car and their jet, but refiners are going to want to rebuild their inventories. I teach my students about the relation between futures markets and inventory markets. Inventories prevent oil prices from going up very quickly, but they also prevent prices from dropping very quickly. My guess would be oil prices are not going back down to $55.

—Peter S. Green

Big Businesses mentioned this week

$GM ( ▼ 0.58% ) $ORCL ( ▼ 1.74% ) $PSKY ( ▲ 2.12% ) $WBD ( ▼ 0.57% ) $LULU ( ▲ 2.16% ) $NKE ( ▲ 0.49% ) $SBUX ( ▼ 0.48% ) $META ( ▲ 0.57% ) $UAL ( ▲ 3.13% ) $AAL ( ▲ 1.25% ) $DEL ( 0.0% ) $BF.B ( ▼ 1.39% )

This week, big business!

War Story
The usual suspects
Trumplandia
Elon’s World

War Story

It looks like the U.S. Navy is going to be parked by the Strait of Hormuz for a while longer, and that’s got some major implications for the global economy. President Trump told aides to prepare for an extended blockade, the Wall Street Journal reported, until Iran “says uncle,” and Sec of Defense Pete Hegseth said the war has cost about $25 billion so far, while asking for a record $1.5 trillion for defense next year, a nearly 50% increase. That would certainly boost defense stocks, but with the national debt now at $39 trillion, and $10.1 Trillion of that added by Trump in his two terms, it may be hard to find that cash. And with oil now trading at over $100 a barrel, and likely to rise and stay there, even China is beginning to feel the hurt. A massive net energy importer, China gets70–75% of its crude oil and 40–45% of its natural gas from abroad. But nine weeks into the war, China is showing the strain. Retail car sales are down 26% from a year earlier, retail sales are slowing, its giant energy reserves have given it some resilience, but production of everything from toys to cars is falling, with buyers spending their disposable income on energy. And even as the U.S. restores sanctions on Iranian oil exports, Russia is still free to sell whatever oil isn’t burning from Ukrainian drone attacks, and General Motors $GM ( ▼ 0.58% ) says its sales of gasoline-powered cars and pickups are holding up, and a $500 million tariff refund helped it beat analysts estimates, even as the war has raised its costs, and gas prices rise to a national average of $4.11 a gallon this week. Europe and Asia’s oil shortage sent West Texas Intermediate crude to $110 a barrel early Thursday, a blessing for US crude exports, which soared by 1.6 million barrels a day to a record 6.4 million a day last week.

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The usual suspects

(Google)

Ellison’s money blues? Oracle $ORCL ( ▼ 4.92% ) founder Larry Ellison (pictured above) is at the center of a whole lotta stuff these days: $40-billion dollar deals to build AI data centers, helping to fund a takeover of the U.S. operations of China’s TikTok, and bankrolling his son David’s successive media takeovers of Paramount $PSKY ( ▲ 2.12% ) and now Warner Bros Discovery $WBD ( ▼ 0.57% ) , all while remaining a trusted adviser of President Trump. But a deep dive by the Wall Street Journal suggests that Ellison’s $215 billion fortune (Bloomberg pegs him as the world’s sixth richest person) is becoming a house of cards, threatening the success of all of these ventures. Some 80% of Ellison’s fortune comes from Oracle shares, and about a third of those are pledged to back various loans and investments. But those investments are looking increasingly shaky, meaning the other 56% of Ellision’s fortune could collapse in value if any of these projects falter. A few Fawlty Towers candidates include the $40 billion Oracle has agreed to spend to buy Nvidia $NVDA ( ▼ 0.03% ) chips for the Stargate AI centers that OpenAi is building with SoftBank $SFTBY ( ▲ 2.07% ) . OpenAI is not generating the use or revenue it would need to rent the chips’ computing power from Oracle. Then there’s the WBD deal, which depends on $24 billion from Saudi, Qatari and Abu Dhabi sovereign wealth funds, which are now being redeployed to rebuild energy infrastructure destroyed in the Iran War. Ellison owns about 40% of Oracle, but the company’s share price has dropped by half since peaking last September.
Yoga ain’t toothpaste: That’s what Lululemon $LULU ( ▲ 2.16% ) founder and board rattler Chip Wilson said in his umpteenth letter to shareholders this week, urging them to pick his three nominees for the board of the foundering women’s athleisure wear brand. The company’s shares have plunged 73% since a December 2023 peak above $500. That’s despite revenue that hasn’t stopped growing since the company went public back in 2007. But the growth rate has slowed - up less than 1% last year, amid pressure from rivals including Alo Yoga and Vuori, falling demand and import tariffs. Wilson says the forthcoming appointment of ex-Nike $NKE ( ▲ 0.49% ) exec Heidi O’Neill shows the board just doesn’t understand the brand, and needs to hire a chief “who can deliver on the newest zeitgeist.” Wilson wrote: “Lululemon is not a toothpaste brand.” Blood in the water from the boardroom turmoil is attracting sharks: activist hedge fund Elliott Management has built a stake of more than $1 billion in the $16.45 billion company.
Starbucks turnaround? Has the Chipotle Kid done it? Starbucks $SBUX ( ▼ 0.48% ) CEO Brian Niccol, the former burrito chain boss, said sales are bouncing back and he raised the company’s growth forecast for 2026, amid signs that his turnaround for the storied coffee concern may be working. Starbucks has invested hundreds of millions of dollars in improving its stores, changing workflows and boosting barista pay. “Customers now believe their Starbucks purchase is worth it compared to a year ago,” Niccol said on a conference call. Shares are up 18 percent in the past month, and 25% for the year. Although if you’d invested in the S&P500 when Niccol took over, you’d have made a comparative killing:

(Google)

The used car market will soon be flooded with electric cars. While Detroit keeps pumping out gas guzzlers, Volkswagen is rolling out new, low-price EVs across its brands (VW, Skoda and Cupra), with a 25,000-euro VW Polo, aiming to compete with cheaper Chinese EV’s. BYD’s entry-level Dolphin Surf sells in Europe for 23,000 euros. And while China may be leading the world with electric car uptake, the three most profitable publicly traded Chinese carmakers Geely Automobile Holdings, Chery Automobile and BYD, all reported double-digit declines in net profit in the first quarter, reflecting a worsening domestic economy and the expiration of tax incentives for car buyers. Meanwhile back in the U.S., leases will be expiring later this year on hundreds of thousands of EVs, flooding the market with used vehicles that dealers expect will be cheaper than used gasoline-powered cars. By 2028, 800,000 off-lease EVs will be entering the market each year, Automotive News reports. That’s good news for drivers (and the environment) but may make a new $60,000 Tesla Model Y a tough sell.
The holy Spirit? President Trump’s announcement that the federal government may offer failing Spirit Airlines $SAVEQ ( ▲ 0.43% ) $500 million in cash to save it from bankruptcy, in exchange for warrants for 90% of the carrier, was already a bad idea, many in the industry have suggested. As United $UAL ( ▲ 3.13% ) CEO Scott Kirby said last week, “The Spirit business model is fundamentally flawed, and it’s going to fail.” But other budget airlines want some of that bailout cash. The Association of Value Airlines wants $2.5 billion in loans for its members to help offset the high price of jet fuel. That’s setting up a civil war in the airline industry. Majors like American $AAL ( ▲ 1.25% ) , Delta $DEL ( 0.0% ) and United don’t like the pressure discounters’ prices put on their own margins. And the discounters will need to get Congress to find the cash somewhere first.

KPMG gets marching orders: The U.S. Army hasn’t passed an audit in eight years of trying, so it’s making the logical move and firing its auditors. Big Four firm KPMG has lost its $60 million annual contract, and will move 450 staff to other projects. Defense Sec. Pete Hegseth said he’s consolidating audits and financial reporting across the military ahead of a 2028 deadline by Congress to account for America’s trillion-dollar defense budget.
Last call? Kentucky’s Brown family, who control Jack Daniel’s maker Brown-Forman $BF.B ( ▼ 1.39% ) have called off sale talks with Pernod-Ricard, rejecting the French distiller’s offer that reportedly tied up 80% of the offer in Pernod stock, which, like Brown-Forman, has lost about two-thirds of its value in the past five years. Blame changing tastes, poor marketing and Trump tariffs for the decline. Now, New Orleans-based Sazerac, another family-run (and family-owned) distiller, is back in the mix, with a $15 billion all-cash offer to match Pernod’s. Whiskey Bible author Noah Rothbaum says that deal’s much more likely, and could see the Brown family keep control of their original brand, Old Forester, as part of a sale to Sazerac. Brown-Forman shares dropped about 10% on Tuesday. Down the hatch!

Tech talk

Truly mag-nificent? The Mag-7 tech companies reported earnings this week, and business-wise things are looking good for almost everyone—except for investors: They appear to be getting nervous about the massive scale of planned tech spending this year —an unprecedented $650 to $700 billion—and whether there will be enough demand to pay for it all. Five of the seven stocks fell Thursday morning, despite rising revenue. Here’s what happened:

Company	Ticker symbol	Revenue change	Net income change	Share Price Change Thursday AM
Alphabet	$GOOGL ( ▲ 1.77% )	+22%	+81%	+5.62%
Amazon	$AMZN ( ▲ 1.94% )	+17%	+77%	-0.82%
Meta Platforms	$META ( ▲ 0.57% )	+33%	+61%	-9.87%
Microsoft	$MSFT ( ▲ 0.65% )	+18%	+23%	-5.39%
Apple	$AAPL ( ▲ 1.75% )	Not yet reported	Not yet reported	+0.34%
Tesla	$TSLA ( ▲ 0.52% )	+16%	+17%	-0.68%
Nvidia	$NVDA ( ▼ 0.03% )	Not yet reported	Not yet reported	-3.25%

China’s limits on foreign tech also hit hard this week: Goldman Sachs $GS ( ▲ 0.92% ) told its Hong Kong bankers to stop using Anthropic, for fear of violating both its agreement with Anthropic and Chinese tech laws, and Beijing said Monday it would force the Chinese founders of a Singapore-based AI company called Manus to unwind their four-month-old sale to Meta $META ( ▲ 0.57% ) , claiming the deal violated export rules on Chinese tech.

Trumplandia

The umpire strikes back: He may be on the down escalator, but outgoing Fed chair Jerome Powell still has some teeth. At this week’s meeting of the rate-setting Federal Open Markets Committee rates were held steady, though tea-leaf readers say the Fed’s post-meeting statement suggests growing support for further cuts, particularly if data show the war hurting the economy. Powell also announced he’ll be staying on as a governor even after the new chair, Kevin Warsh, is confirmed. That means Trump’s only placement on the board, Stephen Miran, will have to step down when Walsh takes office. And Warsh’s installment took a step forward when the Dept of Justice yielded to threats from Sen. Thiom Tillis, the North Carolina Republican, who vowed not to approve any Fed nominees until the DoJ dropped its investigation of Powell over the Fed’s headquarters reconstruction.

Blame Canada? They’re doing alright up north, despite the Trump tariffs and a simmering trade war with Washington. (“They suck,” U.S. Commerce Sec. Howard Lutnick said of Canada last week, musing that the current free trade pact with Canada should be renegotiated). Prime Minister Mark Carney told Parliament this week the economy will grow 2% this year, up from 1.7% last year, with rising oil prices boosting government revenues. He's also launching a Canadian sovereign wealth fund of 26 billion Canadian dollars ($19 billion USD).

Elon’s World

About that SpaceX IPO: It looks like Musk is about to pass into Don Quixote territory, dreaming the impossible dream. If SpaceX hits a market value of $7.5 trillion, and establishes a permanent human colony on Mars with at least 1 million people, Musk gets 200 million super-voting shares, according to an SEC filing obtained by Reuters. He gets another 60.4 million shares if SpaceX puts 100 terawatts of computing activity into space. For comparison, the U.S. currently can generate 1.3 terawatts of electricity. An IPO planned for June would value the company at about $1.75 trillion. As of December 31, Musk held 68.8 million Class B stock options with a strike price of about $42. The IPO would value those shares at around $600 or more, giving Musk a profit of over $550 per share, or $38.39 billion. That’s left SpaceX and Tesla $TSLA ( ▲ 0.52% ) dueling for Musk’s attention.