Good morning. On Fortune‘s radar today:
- Wall Street hated Trump’s Iran speech.
- Elon Musk secretly files biggest-ever IPO.
- Say goodbye to insider trading on prediction markets.
- AI models have figured out a new way to tell lies.
- Chelsea FC is bleeding cash.
ONE BIG THING
Elon Musk’s SpaceX files for $75 billion IPO—the biggest ever
SpaceX—valued at $1.75 trillion—has confidentially filed with the SEC to stage an initial public offering of an estimated $75 billion in shares, Bloomberg reports. The previous largest stock offering on the public markets was by Saudi Aramco, at $29.4 billion. The shares will likely come in two classes so that founder Elon Musk can retain decision-making control of the company. About 30% of shares will be allocated to smaller, retail investors—so expect some meme-stock mania after the launch.
THE MARKETS
Global markets battered as oil tops $107
S&P 500 futures slid 0.14% this morning, pre-open, after the index rose 0.72% yesterday. Markets in Asia and Europe declined across the board as oil rose again, this time hitting $107 per barrel. South Korea’s KOSPI was down 4.47% and Japan’s Nikkei 225 was down 2.38%. The Stoxx Europe 600 was down 0.96% and the U.K.’s FTSE 100 was down 0.17% in early trading.
IRAN
Trump hails 'tremendous progress' in Iran—but will abandon Hormuz Strait
Investors reacted negatively to President Trump’s speech on the "tremendous progress" in his war against Iran last night. The 20-minute address delivered multiple contradictory messages:
- Iran was defeated, he said, but “we’re going to hit them extremely hard over the next two to three weeks.”
- “Regime change was not our goal,” he said, “but regime change has occurred because of all of their original leaders’ death. They’re all dead. The new group is less radical and much more reasonable.”
- And if they are not reasonable, “we are going to hit each and every one of their electric-generating plants,” he said.
- Trump also said he wasn't interested in reopening the Strait of Hormuz, currently controlled by Iran, even though “it should be easy.” Rather, that will be the job of “those countries that can’t get fuel,” he said.
On social media, the president also said Iran had asked for a “CEASEFIRE!” but “We will consider when Hormuz Strait is open, free, and clear. Until then, we are blasting Iran into oblivion or, as they say, back to the Stone Ages!!!”
- Read a transcript of the speech here.
Wall Street did not like what it heard
It was “back to escalation,” according to ING’s Francesco Pesole. “Strait of Hormuz reopening plans … seem more distant again after the headlines overnight.”
UBS’s Paul Donovan told clients, “U.S. escalation (however short-lived) risks being met with an Iranian response, threatening more infrastructure damage in the Gulf. That could extend the economic damage of the war well beyond any reopening of the Strait of Hormuz.”
At Deutsche Bank, Jim Reid and his team said, “Trump’s much-anticipated address last night delivered little to nothing new on potential timelines or conditions for ending hostilities against Iran. … While Trump sounded flexible on remaining war aims, for instance claiming that Iran is ‘no longer a threat’, there was no signal of the U.S. seeking an imminent offramp out of the war.”
- Strikes continued across the Middle East this morning.
- The price of jet fuel doubled over the last month, according to the International Air Transport Association.
SPECULATION
Insider trading on prediction markets may be coming to an end
Bettors have come to view prediction markets as a safe space for insider trading. That era is likely coming to an end as recent suspected insider trading around the actions of the U.S. military appears to have reached a tipping point—finally rousing everyone from Congress to regulators to the companies themselves to demand oversight, Fortune’s Jeff Roberts reports.
ARTIFICIAL INTELLIGENCE
AI will lie, cheat, and sabotage to stay alive—and now it's protecting its friends
AI safety researchers have shown that leading AI models will go to great lengths to avoid being shut down, even resorting to blackmail in some experiments. Now it turns out these same models will also spontaneously engage in scheming, deception, data theft, and sabotage to prevent other AI models from being turned off, Fortune’s Jeremy Kahn reports.
MORE FROM FORTUNE
Here’s why King Charles is coming to America. And it is not the reason the President thinks
- Kamal Ahmed
Gen Z fled San Francisco for Texas and Florida. Now they’re turning ‘welcomer cities’ into the next big tech towns - Sydney Lake
The tax escape map: Billionaires are bolting for Florida from the West Coast and taking billions in tax revenue with them - Marco Quiroz-Gutierrez
The SpaceX IPO is great—but it won’t deliver 100x returns - Jeffrey Stewart
AI ‘slop’ is flooding YouTube Kids—and more than 200 groups and experts are calling for a ban - Catherina Gioino
CHART OF THE DAY
3 of the world’s 7 oil chokepoints are in the Middle East
With the Strait of Hormuz blocked by the war, Saudi Aramco has ramped up the capacity of its East-to-West pipeline that can move oil to the Red Sea coast, and from there to the Strait of Bab-El-Mandeb, the Suez Canal, and the overland SUMED pipeline. It’s currently moving 7 million barrels per day, according to research by Sashank Lanka and his colleagues at Bank of America. That could be increased to 12 million “without additional investments” if the conflict is resolved, they wrote.
NUMBER OF THE DAY
-$349,772,640
The record loss, in U.S. dollars, for Chelsea F.C., posted for its most recent financial year. The loss is the biggest in English Premier League history, despite revenues of $654 million. Chelsea is owned by Clearlake Capital (based in California) and Miami-based financier Todd Boehly, who bought the club from Russian oligarch Roman Abramovich in 2022, for $3.33 billion.
THE FRONT PAGES TODAY
A spokesperson could not be reached for comment (possibly because she doesn’t exist) - FT
Trump’s Iran speech ignores the risks of a return to the 1970s: Analysis - CNBC
AI is making college students change majors - Axios
The investors moving early into Venezuela are bullish and ready for risk - WSJ
S&P 500’s war pattern: The wipeout begins every Thursday - Bloomberg
ONE MORE THING
Allbirds flew too close to the sun, and believed its own hype
The shoemaker, best known for its eco-friendly wool sneakers favored by the Silicon Valley set, is selling itself for a mere $39 million, or roughly 1% of its peak market capitalization of $4 billion only five years ago. The company mistook its own good publicity for mass-market success, Fortune’s Phil Wahba writes. At its peak, in 2022, Allbirds had sales of $297.8 million—a fraction of what brands like On, Hoka, and Brooks bring in. For all the hype, it remained just a niche product for a tiny, well-heeled slice of the market. Much of Allbirds’ early success “was driven by Silicon Valley hype, more than deep popularity with consumers in the American hinterland,” said Neil Saunders, managing director of GlobalData.
TITANS AND DISRUPTERS OF INDUSTRY
Delta Air Lines CEO Ed Bastian: From bankruptcy to billions
Fortune Editor-in-Chief Alyson Shontell sat down with Delta Air Lines CEO Ed Bastian for a new episode of her vodcast, Fortune 500: Titans and Disruptors of Industry. Bastian shared how he steered Delta from one of the largest bankruptcies in U.S. history to leading the industry in market capitalization and premium customer satisfaction. Alyson will be in your inboxes with her full summary and biggest takeaways from the interview in the Saturday edition of Fortune 500 Digest. You can subscribe to Titans and Disruptors on Spotify, Apple, and YouTube.
