Morning Reads

Morning Reads

Open Interest Changes



The most valuable startup in America might be getting even more valuable. Fresh reports suggest that SpaceX (SPACE) is in talks that would value Elon Musk's space firm at $175B or more, following a tender offer that could range from $500M-$750M and price shares at about $95 apiece. That's up from the $150B valuation SpaceX received in the summer and would trounce the $137B valuation it received when raising $750M from investors in January.

Higher and higher: Momentum kicked into high gear after SpaceX's soaring revenue helped it turn a profit in the first quarter of this year following two straight annual losses. It's on track to book revenues of about $9B in 2023, with sales projected to climb to $15B in 2024. Besides its Falcon rocket launches, much of SpaceX’s value comes from Starlink, which provides high-speed internet access beamed from a growing constellation of satellites. A separate Starlink (STRLK) IPO could come next year as the division grows in its consumer and military importance on the world stage.

On that note, Starlink just completed nine months of U.S. military tests in the Arctic, clearing the way for potential contracts from the Space Force. The satellite service has also taken a role in the Ukraine-Russia war, has been pitched to help past protests in Iran, and potentially provide service in Gaza subject to Israeli approval. On the commercial side of things, Starlink has also been hailed by those living in rural or remote areas, and is now available on all seven continents, including Antarctica.

Battle for the sky: With 5,100 satellites so far delivered to low-Earth orbit, SpaceX has rapidly expanded its Starlink constellation. Its closest U.S. rival, Amazon's (AMZN) Project Kuiper, is far behind - with only two initial prototype satellites - and even recently inked a contract with SpaceX to get its satellites to orbit. Falcon rockets have sent out payloads for private-sector companies, as well as NASA and other government agencies. Topping the 61 launches set last year, SpaceX also just marked its 90th orbital mission of 2023, and company representatives have said they are shooting for 144 launches in 2024. Starship progresses further before being destroyed intentionally


McDonald's (MCD) will begin testing a new small store format called CosMc's this week, earlier than it previously expected, with plans to open 10 locations by the end of 2024. CosMc's will feature customizable specialty beverages that will rival popular chains like Starbucks (SBUX). CosMc's, named after a space alien character featured in ads in the 1980s, is not the first attempt by McDonald's to cash in on nostalgia following a highly successful Grimace Birthday Meal that went viral in June. The fast-food chain has also set ambitious new growth targets, including plans to expand at a record pace to 50,000 restaurants by the end of 2027.

Neuroscience expansion

Cerevel Therapeutics (CERE) soared 15.5% in AH trading on Wednesday as AbbVie (ABBV) agreed to an $8.7B acquisition of the drugmaker developing therapies for neurological conditions such as Parkinson's and schizophrenia. AbbVie will pay $45 a share in cash for the acquisition, representing a 22% premium over Cerevel's last close. The development marks AbbVie's acquisition spree after last week's $10B deal to buy cancer drugmaker ImmunoGen (IMGN), which SA analyst Bradley Guichard called "excellently" timed. Inside job? Before the latest deal announcement, Cerevel shares climbed 42% this week on no apparent news. (9 comments)

Osprey grounding

The U.S. military has grounded its entire V-22 Osprey aircraft fleet. A fatal crash during a routine training mission occurred last week off Yakushima Island in Japan, which killed eight Air Force Special Operations Command personnel. "Preliminary investigation information indicates a potential materiel failure caused the mishap, but the underlying cause is unknown at this time," the AFSOC said, adding that a thorough investigation will be done on the helicopters made by Boeing (BA) and Textron's (TXT) aerospace manufacturing unit Bell Textron. The crash has renewed concerns over the safety of Ospreys, which have been involved in multiple fatal accidents since the aircraft became operational in 2007. (1 comment)

Today's Markets

In Asia, Japan -1.8%. Hong Kong -0.7%. China -0.1%. India -0.2%.
In Europe, at midday, London -0.1%. Paris -0.1%. Frankfurt -0.2%.
Futures at 7:00, Dow -0.2%. S&P flat. Nasdaq +0.2%. Crude +0.6% to $69.81. Gold +0.1% to $2,050. Bitcoin -2% to $43,090.
Ten-year Treasury Yield +3 bps to 4.15%.

Today's Economic Calendar

7:30 Challenger Job-Cut Report
8:30 Initial Jobless Claims
10:00 Wholesale Inventories (Preliminary)
10:30 EIA Natural Gas Inventory
3:00 PM Consumer Credit
4:30 PM Fed Balance Sheet

Companies reporting earnings today »

What else is happening...

Tobacco jolt: BAT (BTI) writes down $32B from value of U.S. brands.

Exxon CEO: Guyana dispute resolution likely a couple years away.

AMD (AMD) sinks as it unveils Nvidia rival, updates AI forecast.

Top bank CEOs indicate they can meet proposed capital requirements.

Google (GOOGGOOGL) shows off new Gemini AI model, new chips.

Chevron (CVX) plans $16B capex in 2024, up 14% from current year.

Blackstone Mortgage Trust (BXMT) falls as Carson Block shorts stock.

Meta (META) rolls out default end-to-end encryption on Messenger.

Chewy (CHWY) slips as holiday quarter guidance disappoints.

This just in: GameStop (GME) can invest in other stocks.

Known to most as Uranium Pinto Beans, Jason has more than 15 years under his belt of trading stocks, options and currencies. His expertise primarily lies in chart analysis, and he has a strong eye for undervalued stock. Because he’s got the ability to identify great risk/reward trades he usually enjoys taking the path less traveled and reaping the benefits from the adventure.

He is a co-founder of Option Millionaires, and he is best known for his weekly webinars with Scott, as well as his high level training webinars and charts found in the forums.

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