SpaceX Stock Giveaway & J.B. Hunt's Diesel Woes

John Crotteau (0:04)

We are eastbound and down, loaded up and truckin with earnings out of JB.

Emily Milliron (0:07)

Hunt. And what might a Tesla Roadster with SpaceX thrusters imply about the coming together of the two companies? We have the latest.

John Crotteau (0:14)

From Monday, October 19th, it's Brew Markets Daily. I'm John Crotteau.

Emily Milliron (0:17)

And I'm Emily Milliron. Let's get movin and groovin.

John Crotteau (0:28)

Hi, Emily.

Emily Milliron (0:29)

Hi, John.

John Crotteau (0:30)

It's great to have you in studio again on a Monday. And there is so much chatter out of the world of Elon Musk.

Emily Milliron (0:36)

There always is.

John Crotteau (0:37)

Everything X-related, everything with an X in it.

We recently learned that SpaceX is going to hold their second earnings call tomorrow. This morning, Musk announced his intent to give every kid in America a stake in SpaceX. And Wall Street is abuzz with speculation that SpaceX may gobble up Tesla before the year is through. More on that in a moment, including, of course, the reveal of Tesla's flying roadster last week.

Emily Milliron (1:05)

Yep. Let's start with a word about shares or a share of SpaceX being doled out to America's kids. At 7.52 this morning, Musk posted on X, of course, since he controls the social media platform through SpaceX. He said, Next year, I will give one of my SpaceX shares to every kid in America. This will be the first of many.

The post seems to be in response to a statement over the weekend that Anthropic plans to commit 5% of their shares, which is about $48 billion, no small fee, to a new public benefit fund. And then Musk replied that the company should be giving the shares directly to the public.

John Crotteau (1:42)

Right. And that's a big difference between those two, let's call them pledges. Anthropic is committing company equity to a fund, while Musk is apparently, from what we can ascertain, giving from his own holdings, should be no dilution to SpaceX investors. Anthropic's announcement comes in advance of the company's IPO, when these types of moves have to be disclosed. And it gives the company a little bit of good PR, perhaps. The money in that public benefit fund could go towards studying the effects of AI on our society, or programs addressing AI's impact on workers. But according to Musk's post, he wrote, I'm going to give my SpaceX shares. As a reminder, Musk's shares are in lockup until June of next year. His tweet does specifically say next year, so we've got at least eight months to see where this might go.

Emily Milliron (2:33)

Right. And there are a lot of unknowns about Elon's proposed gift. There is one possible model here, though. Over the summer, Gwynne Shotwell, the president and COO of SpaceX, pledged one share each to more than two million kids. Trump accounts worth over $320 million then. That was a personal gift, and perhaps it's the model that Musk would be following. As far as the reporting that we have seen, though, Shotwell shares haven't been delivered yet, and the Treasury Department finalized the stock gift rules recently.

John Crotteau (3:03)

Right. And the other headline, Trump account donations we've seen so far, have all been cash. The Dell family pledged a $6 billion gift. Micron committed $250 million for some of its employees. So, we shall see. It's a vague pledge. But SpaceX is at $150 a share today.

There's about 75 million kids in the United States. So, let's call that an $11 billion pledge from Elon, which would represent a little more than 1% of his $6 billion SpaceX shares that he currently controls.

Emily Milliron (3:35)

But John, that's where SpaceX shares sit today. What if the company combines with Tesla? There's so much speculation that this tie up is imminent. Barclays Dan Levy wrote that a deal could be announced before Tesla's annual meeting on December 3rd, which is actually six weeks away. And if you think about it in holiday time, it's basically tomorrow.

John Crotteau (3:53)

Right, exactly. If you don't have your flights booked, you're already in trouble.

So, the likeliest scenario right now is that SpaceX would buy Tesla in an all-stock deal. Over the weekend, an RBC analyst pegged the shareholder acceptable Tesla price at about $480 a share, a 36% premium over Friday's training. So, I do own some Tesla. I accidentally bought in early, and I've been watching the share price fall so far this year, down to about 18%.

Shares dropped after the EV credit expired last year. The recent CyberCab event was underwhelming. Local legal approvals for full self-driving seems to hit snag after snag. I mean, they're going municipality to municipality trying to get these vehicles on the road. So, a potential buyout could be a lifeline for Tesla, bringing together the entire AI chain that Musk controls, chips, software, and then the hardware, including robots and rockets. The two companies are already building or planning to build the TerraFab chip plant together.