SpaceX Eyes Mobile Phone Partnership, Rocket Lab Acquires Iridium for $8B

**Zaid Admani** (0:00)
Public.com presents The Rundown, your daily market update in 10 minutes. My name is Zaid Admani, and today is Monday, June 29th. In today's episode, we'll break down last week's tech selloff and why investors are suddenly worried about the AI trade. We'll also tell you why Comcast is breaking itself apart and why SpaceX wants to become your next phone carrier. Then stick around to the end of the show to find out why Michael Burry is betting on Microsoft. We got a great show for you today.
Let's go.
Markets are coming off a tough week. The S&P 500 and NASDAQ fell every single day last week, with the S&P closing down 2%, while the NASDAQ fell 4.6% on the week. Tech and chip stocks took the worst of it. The semiconductor index fell nearly 8%.
It's worse week in more than a year. There seems to be growing concern now about the negative impacts of the AI boom, especially to consumers. There was a shock to the market last week when Apple and Microsoft both announced pretty significant price hikes to their products because of higher memory prices caused by the AI boom. We actually did a whole deep dive on this topic over the weekend, so go check that out if you missed it. We'll put a link in the description. Now, the other concerning thing to keep an eye on is the amount of leverage in the market right now. Market debt hit a record $1.4 trillion in May, which means that people are borrowing more and more money than ever to invest in the stock market. Here's a crazy stat, leverage ETFs have nearly doubled to $220 billion. So you've got people out there stacking leverage on top of leverage, and while that might be helping the markets move higher, it can unwind pretty fast and things can get pretty ugly. Now, you see this happen all the time in the crypto markets where there's historically been a lot of leverage and crypto prices can drop in an instant. By the way, speaking of crypto and prices dropping, Bitcoin has now fallen below $60,000 for the first time since October of 2024 But look, zooming out though, despite the sell-off in tech, the rest of the market is actually holding up fine. Now, long time listeners know I'm not a big fan of the Dow, but it did gain 0.6% last week. And looking at the equal weight S&P 500, it was up 0.4% and outperformed the regular S&P by the widest margin since 2020 So there seems to be a clear rotation happening out of tech and AI and into everything else. Now we'll have to see if that rotation continues this week or will investors buy the tech dip? By the way, this week is a short week. The market will be closed on Friday for the 4th of July, but the June jobs report drops on Thursday. So that should tell us more about how the overall economy is holding up. We'll cover all of that and everything else happening in the market. So definitely get subscribed to the podcast if you're new here and tune in every day to stay in the loop.
Let's run through some headlines. Starting with Comcast. Comcast is breaking itself up again and the market absolutely loves it. So right now, Comcast is a major conglomerate. They own a ton of stuff like broadband internet, cable TV, wireless phone service, the universal theme parks. They also own a movie studio, NBC, the Peacock streaming service and a bunch of other networks. Well, the plan for Comcast is now to split itself up into two separate companies. On one side, you'll have the new NBC Universal Company, which will include the theme parks, the movie studio, the TV studio, the NBC channel, Telemundo, Peacock, Bravo, and Sky. And then on the other side, you'll have the remaining Comcast, which will be the broadband internet, wireless and cable TV business. So essentially Comcast is separating the broadband and cable TV business from the media business. And the market loved this news with Comcast shares surging more than 20% at the time of this recording. You know, investors have been begging Comcast to do this for a while now. Comcast stock has been a disaster recently, down 30% over the past 12 months. The problem for the company is that the cable TV business is dying as more and more people cut the cord and move to streaming. And that dying side of the business has been dragging down the entire stock, including the parts of the business that are actually growing, like their theme parks. So by separating them, each company can now focus on what they do best and investors can choose which side they want to own. Current Comcast shareholders will get shares in both companies once the spinoff is complete. This deal is expected to take about a year and still needs board and regulatory approval. By the way, this is the second spinoff that Comcast has done recently. Remember earlier this year, they spun off their cable networks like CNBC into a separate company called Versant Media. And honestly, my take is that this probably should have happened years ago. The conglomerate model just doesn't work anymore, especially when one side of your business is growing and the other side is shrinking. The shrinking struggling side just weighs the entire company down. So by splitting it up, it unlocks value to use some Wall Street jargon there. Let's shift gears and talk about SpaceX. According to the Financial Times, SpaceX is reportedly in talks with Charter Communications about a potential mobile phone partnership in the US. This is part of SpaceX's plan to turn Starlink from a satellite internet company into a full-on phone carrier and take on the big wireless carriers like AT&T, Verizon, and T-Mobile. Now, the problem for SpaceX is that satellites alone aren't enough to run a nationwide phone network. You still need things like Spectrum and billing and customer support and a lot of ground-based infrastructure. So that's where a partnership with Charter could come in. Charter is a company behind Spectrum. It's one of the largest home internet providers in the US. And they also have a mobile business called Spectrum Mobile. So in a potential SpaceX Charter partnership, SpaceX could bring the satellite connectivity and the Starlink brand, while Charter could bring the ground internet infrastructure along with the customer relationship. And that could be enough to compete with the big three phone carriers. Now, to be clear, no deal between the two companies has been announced yet. They're still just talking. And even if SpaceX doesn't fully become the fourth major wireless carrier, this is still a warning shot to the telecom industry. The market seems to be taking this potential partnership seriously. Shares of Charter are up 15% this morning at the time of this recording, and SpaceX is up around 1%. It's possible that SpaceX is just using this as leverage to potentially get a partnership with one of the big three phone carriers. So definitely something to keep an eye on. I mean, SpaceX has told investors that they see the mobile space to be a much bigger opportunity than just the home internet space. Let's talk about some stocks making moves today.