Closing Bell - Closing Bell Overtime: Trump's Meeting with CEO's, Adobe Earnings & Tesla Shareholder Meeting 6/13/24

Episode Date: June 14, 2024

From the open to the close, “Closing Bell” and “Closing Bell: Overtime” have you covered. From what’s driving market moves to how investors are reacting, Scott Wapner, Jon Fortt, Morgan Brennan and Michael Santoli guide listeners through each trading session and bring to you some of the biggest names in business.

A seesaw session, but ultimately record closes again for the S&P 500 and the Nasdaq Composite. We got more promising inflation data, a dip in yields following a strong bond auction. That's the scorecard on Wall Street, but the action is just getting started. Welcome to Closing Bell Overtime. I'm Morgan Brennan with John Ford. Coming up this hour, the much-hyped Tesla shareholding meeting officially gets underway with results from the vote on Elon Musk's multibillion-dollar pay package. Perhaps imminent. We'll bring you details throughout the hour. Plus, Adobe is the next major software firm to report earnings after big swings on earnings from names like Salesforce and Oracle.

We've got those numbers due in just a few moments. And we're going to go talk to the CEO of AI Darling, Supermicro, which is up around 3x so far this year, jumping today after stalling for the last few months. But first, we begin with the market. Another day of records. Let's bring in our market panel, Barbara Duran of BD8 Capital Partners and Brooke May Evans of Evans May Wealth, I should say. Brooke, I'll kick it off with you here. The fact that we are at record highs again for the S&P, for the Nasdaq, we're really grinding higher at these levels. What does that tell us about the valuation of the market? And what should we see as the next meaningful catalyst? Right now, the market's not cheap,

but the market can trade for a prolonged period of time at high multiples, and it doesn't necessarily indicate that a correction is coming. But we are near our 52-week year-end price target, and so we're looking for other areas to add performance to our portfolios. And we're shifting now to small cap. We've been underweight small cap for the last two years. And while we don't think lower earnings will bleed through to small cap, while we don't think lower interest rates will bleed through to small cap earnings the second half of the year, in anticipation of lower rates in 2025, we think we can see a rally there. Small cap's only up 2% year to date, whereas the broad market's done significantly better. Yeah. And a mixed day for the major

averages. The Russell 2000 finishing today down nine tenths of one percent. Barb, I want to get your thoughts here because we did see the dot plot. We saw the Fed adjust to just one rate cut forecast with a meeting yesterday. And yet PPI fell today. Jobless claims jumped today. What does that tell us about the soft landing narrative? And what does that mean in terms of where you should be invested in the market? Well, I think the soft landing scenario is still intact. I think there's starting to be and could build the jitters about is the Fed going to stay restrictive for too long? I think the jobless claims, if we see more of those, those are volatile week to week. We did have the strong payroll numbers, but we're seeing

other indications, whether it's the jolts numbers, fewer openings. It's now back to sort of one-to-one job openings for job seekers where it was pre-pandemic. So there's lots of information coming in about that jobs are softening, but we are still fine. But that could change over the next quarter or two. So I think the Fed, I think it's a little surprising that they just said one rate cut, but I think that's part of their preserving their inflation-fighting credibility. And I think that we will start to hear different things if we have another good inflation print in July and then in August, leading up to that September meeting. So I think, and you saw today all around the street, economists, strategists are increasing their targets in terms of number

of rate cuts, you know, now two, sometimes three. So I think what it means, the bull market is intact. You know, as Brooks said, the market on the surface is expensive at 21 times earnings. But as we know, that's a handful of stocks who really, if you take that out of the S&P, it's a lot cheaper. And the question now is breadth. And I think it's probably a little too early for the breadth because it's been back and forth. This rotation's into cyclicals into this and that because we were waiting for the rate cut. And so now I think that a lot of investors will wait until we're much closer in terms of visibility on a rate cut. So I think, you know, we're in the tech and

growth stocks. And yeah, given all that, Brooke, I wonder if we're in jump scare territory for the market overall right now. The VIX is under 12. There's been this kind of risk on bias, it seems like to me. What sorts of events might cause you to rethink your still relatively bullish position. It seems like you think the S&P could go up high single digits or at least mid single digits by the end of the year. What would you say are the canaries in the coal mine? Unemployment. You know, if the Fed sees unemployment tick above 4 percent%, they have to act. If the labor market turns, the economy can turn very quickly and the U.S. can't afford another massive stimulus package. They have to get this right. And right now, you know, they have the advantage of looking at Canada and Europe. And

while lower rates there won't necessarily bleed through to economic data in the next couple of months, it'll be a start to be able to kind of foreshadow what we could expect here in the U.S. if they were to start to cut rates. Okay. Adobe is out. The stock is quite a bit higher in its initial move, up about 10%.

We're going through that, and we'll bring you the numbers as soon as we've got them nailed down. Barb, in the meantime, arguably it hasn't been a stock picker's market, even though a lot of people were saying after the strong moves that we'd seen in the S&P major indices over the last several quarters, it would be. Unless you're picking mega caps, which a lot of people wouldn't have been because the whole idea of moving away from the major

indices is they had become so weighed down by the mega cap. So is it really a stock pickers market now? Yeah, I still think it is. I mean, if you look outside the mega cap tech, you know, the really obvious ones, you can look at some of the retail names. And you saw this in this last earnings season, the reports, it was really bifurcated. There were big winners and big losers. And of course, the ones, you know, that we always point to Costco and Walmart, you know, are long term winners. But you had a lot of names that really were hitting it out of the ballpark. And if you look even in restaurants, you have the Chipotles, the Cavas, whereas others, you know, McDonald's not doing so well. Starbucks, you know, has to revamp and figure out, you know, what's going wrong there.

So I do think, you know, you can't just pick like the retail sector. You can't just, you know, pick this sector over that. I think it's within that there are real opportunities. So I do still think it's a stock picker's market. And I think that's what we've seen so far this year in terms of where alpha has truly been generated. All right. Stock picker's market, perhaps then. People who picked Adobe are certainly interested right now. We're going to get to that soon. Barb, Brooke, thanks to you both. Now we turn to Senior Markets Commentator Mike Santoli for a look at the broader market as we set new records. Mike?

Yeah, John, at the index level, very positive trend. In fact, if anything, the S&P 500 is arguably getting slightly stretched relative to its short to intermediate term trend. That's a 50-day moving average right here. You see a pretty decent percentage above it right there, similar to where we were, you know, back in previous times when we were getting a little bit of a short term, you know, top or at least a pause in the market. This goes back to October when we did come off those. So at the index level, very strong trend occasionally kind of goes a little far in the short term. However, look internally at the percentage of S&P 500 individual stocks that are above their respective 50 day averages. And it's actually dipped down to below half recently. So this goes back a year. Normally, it was super broad rally. There you go. In the fourth

quarter coming out of that low in October, that usually buys the overall market some time. That, in fact, has come out to be true. Three to six months later, you have pretty good gains in the overall market. But this is kind of telling you that there's a lot of churn under the surface. It's been a very uneven market, rewarding only a handful of companies. Some people are negative on that. Maybe you have to get a little oversold internally before you get a really good push to the upside. But markets can stay like this for quite some time. And you can see, you know, we bounce off these low levels without having a lot of damage to the index back in the spring. Now, take a look at the race within the S&P in that

top cluster of mega cap stocks, the race for eighth place. That's what's going on right here. So we have Broadcom again, obviously had a huge lunge to the upside, getting toward that $800 billion market cap. Lilly pretty much already there. We've crossed above Tesla and J.P. Morgan along the way. This obviously goes back 10 years. And so this, as I said, eighth place. The big ones that you know, plus Berkshire Hathaway, are what's ahead of these stocks in the index, John. Mike, you're saying things can stay like this for quite some time.

It feels like they've been like this for quite some time because we were talking a couple years ago about how the Magnificent Seven, or maybe it was fewer than that at the time, were, what do we call them? I forget. Fang. We call them Fang. Jim came up with Fang. Fang is like 10 years old. Sure.

Yeah, yeah. So now Lily has joined NVIDIA's near the top. You showed some other names. How long is a long time that it can typically stay like this? Well, here I would revise the history just slightly because while we've been fixated on that one elite group for a while, not every step along the way has represented dominance of that theme. So, you know, as I say, you did have this really broad rally, let's say in 2017. You know, that's when you were talking about tax cuts and value stocks working.

And then even, you know, coming off the lows in 2020, it was everything going up. So it is much more about, I'd say, the last year and a half in particular since the Silicon Valley bank failure. That was where you got a real clustering toward the quality name. So, you know, it can be indefinite, I guess, a trend like this. But what you'd like is along the way, if you get some relief on rates, maybe the Fed cuts, something like that, then you start to see some catch up internally so that the average stock doesn't get left too far behind. As I pointed out, the equal weighted S&P is still in a decent trend. It's just much less exciting and with much less upside in the last couple of years. All right. Mike Santoli, thank you. Now, we mentioned Adobe earnings are out. Pippa

Stevens has those numbers. Pippa. Hey, John. Well, the stock is surging after a top and bottom line beat during Q2 for Adobe. EPS coming in at 448 adjusted. That was ahead of the 439 that analysts were looking for. Revenue a record 5..31 billion, also ahead of the $5.29 billion that analysts were expecting. Now, digital experience revenue was up 9% year over year. And in terms of guidance, the company's Q3 EPS stands at $450 to $455 ahead of the $448 that analysts were looking for. Revenue a little bit below expectations for Q3. But then for the full year, revenue guidance did come in ahead of estimates. And they see full year EPS between $18 and $18.20 versus the $18.03 that analysts were looking for. That stock again up

13.5%. John? Yeah, it looks like a lot better than fear. The full year guide just about in line, but the stock's still moving quite a bit higher. I think Shantanu Narayan had told us that they're going to start monetizing AI in the back half of the year. So maybe so. Don't miss Jim Cramer's exclusive interview with Adobe CEO Shantanu Narayan coming up 6 p.m. on Mad Money. Up next, we'll break down Adobe's quarter and the big jump for the stock with Jeffries analyst Brent Thill. And Supermicro was the top name in the S&P 500 today, resuming an AI-powered rally that's pushed the stock higher by 3x just this year. Supermicro's CEO is going

to weigh in on the big opportunity in liquid cooling. And we are awaiting the start of Tesla's shareholder meeting where Elon Musk's $56 billion pay package, what was $56 billion at one point, is up for vote. We will keep you updated as that news breaks. Overtime is back in two. Welcome back. We have breaking news out of Washington on former President Trump. Eamon Javers has the story. Eamon. Hey there, Morgan. We're learning a little bit more about what former President Donald Trump told American CEOs at a closed door meeting of the business roundtable earlier today here in Washington. According to sources in the room and who were briefed on the meeting, Trump told the executives he'd like to make all of the Trump tax cuts

from his first term permanent. And he said he'd like to get the corporate tax rate down to 20 percent. It's currently at 21 percent. He also talked extensively about his idea for a tax exemption for tips in the service industry. Now, that tip tax exemption is an interesting idea politically, Morgan. There's millions of tipped workers in the United States, and in battleground states, the appeal of that idea could be a powerful lure for service industry workers, particularly female service industry workers, who might not be entirely comfortable with Trump, but who might see the appeal of that idea to them.

We're also told that Trump said the wars in Ukraine and Gaza would not have happened if he was in office, and that he would, quote, fix them once back in power. Back over to you. All right. Eamon Jabbers, thank you. You bet. Now, I mentioned earlier Supermicro, the high-end data center hardware maker, soared today along with Broadcom.

I spoke exclusively with CEO Charles Liang about how he's expanding campuses in Silicon Valley, Taiwan, and Malaysia to try to capture this demand for the company's direct-to-chip liquid cooling system that he says can be deployed 10 times faster than other methods. So today, we are able to design, manufacture, and ship up to 1,000 rack, 1,000 REC, 1,000 REC like this per month. And we aim to make liquid cooling market share grow from less than 1% even last month to hopefully more than 15%, 1.5% for the whole industry deployment in the next 12 months. Now, these details are important because investors increasingly want to see signs of sustainable long-term demand to justify these multiples that AI hardware companies are getting. Liang told me he has large order backlogs and some of the math he laid out, a thousand racks a month contain about 100,000 GPUs total. That's 1.2 million GPUs per year. And the GPUs themselves are between $20,000 and $35,000 each.

One of our very important partners. They are a very big company, very smart company. And we talk to them just a few times. And then right away they say, hey, are you sure you can deliver in volume? And then we commit the volume that's scheduled to them. They order, huge order right away. And we say, can you now order such a high volume right away? They said, no, no, no, no, this is so good.

We want to go for liquid cooling right away. So now, indeed, our pack order has been going crazy with liquid cooling. And many customers like that. All that said, from my conversations with industry players, there's potential for these results from some companies to be lumpy quarter to quarter. The deals are large, and there's always the question of how many chips they can get from NVIDIA to fill them. All the people like to go for AI because AI make business more efficient,

make people's lifestyle much more convenient. So this trend will continue for many years. That's why even in Computex Taipei, I asked Jensen, can I have more allocation? What did he say? He said, Charles, don't give me too much pressure. He said he's doing his best. So with the stock moves today, I don't know, is that more pressure or is it less?

I think it's probably more. I mean, you took the question right out of my mouth, which is, can NVIDIA, for example, when you lay out the math around the GPUs, can NVIDIA keep pace with Supermicro? I think it's also worth kind of taking a step back, especially after we had the CEO, Vertiv, on yesterday and sort of examining. And I'll ask you right now what this competitive landscape for what is a relatively new technology around these GPUs is shaking out to be. The liquid cooling piece is interesting. I really had to dig into this. Each successive generation of these NVIDIA chips, other chips, running so hot.

So how do you cool it down? Because then you've got to pay a lot of money not just to run the load, but to cool the building so the loads can continue to run. Well, there are three different major methods of liquid cooling. One where you pipe in liquid directly to cool the chip. Another where you immerse the equipment in liquid. And then another with a backplate. Anyway, direct-to-chip is seen to be the most effective right now, but you have

to design, usually, a whole data center room, essentially, just to be liquid-cooled. That takes a long time. What Charles Liang and Supermicro are arguing is they have a method that's a lot faster to deploy. You don't have to design a whole a method that's a lot faster to deploy. You don't have to design a whole building or section of a building specifically to house liquid cooling. So if you consider the total cost of rolling that out and running it, it's going to be lower with him. So we'll see if at a thousand racks a month and he's trying to amp up the number he can deliver, you know, he can gain more share in this market away from the likes of Dell, HPE, etc. Well, Adobe out with Q2 numbers just moments ago and the stock is surging.

Joining us now is Brent Thill, equity analyst at Jefferies, who has a buy $700 price target on Adobe. It looks like it's getting a little closer to there now, Brent. If I recall, the question was, is the second half going to be as much better as Adobe promised it would based on them starting to really monetize AI more? What do these numbers tell you about that? John, it's not liquid cooling, but Adobe was the most hated name going into this print. And this was not a standard plus 15 percent rise in the stock. This just goes back to how negative investors are on software. And they're in the AI infrastructure trade and Supermicro, NVIDIA, all their names. And I've been left on the side of the highway with a flat tire with software. And software has been massively underperforming. Adobe's been attacked as the

name that doesn't have any AI, which we believe they do. And Shantanu deserves this because the street's been picking on them for not having AI. But when you talk to Main Street, all the Main Street users are like, they have AI, they have Firefly. They're generating value and no one wants to leave the Adobe ecosystem. So there's been a lot of concern about Canva coming upstream. There's been a lot of concern about Canva coming upstream. There's been a lot of concern about AI. And we think, again, some of these concerns are put on the back burner. But, you know, software has been a tough spot. And I think ultimately good to see that they

didn't have a bad print. The rest of software has had a pretty tough earnings period. So bright, bright star. To your point, if the stock trades right where it is here in overtime tomorrow, it will have recovered maybe just about half of the drop from last quarter. It won't have gotten back to the level where it was trading before last quarter's results. So what does that tell you about what's not priced in here? I think what's not priced in is right now, everyone is having a hard time underwriting 25, 26 numbers on what AI can do to the company, what Canada's doing at the low end of the market and effectively eroding the potential growth opportunity down low. So those are the two big topics. Those issues aren't going away. We've had those concerns from our investors for the last few years. We'll continue to hear those concerns over the next year. But if they can execute again to the AI playbook and show that their customers aren't leaving them for any of these other AI tools, which we have not seen yet, there's still that fear. We have to knock out that fire over the next year. And then secondarily, they've got to focus on what's going on in the

mass market with Canva coming upstream. Those are the two big topics. Again, I think it's going to be tough to stop Canva at the low end. AI, I think they can resolve that as they have demonstrated through the users that are using their AI products today. So if customers aren't leaving Adobe to use AI products elsewhere, it raises the question, how much are those AI products as they roll out within Adobe going to actually cannibalize the more traditional business for Adobe, if at all? And I ask that and wonder whether that means remaining performance obligations, which are $17.9 billion, up more than 17% year on year. Whether a metric like that is now going to matter more. It matters. Backlog always matters. But I go back to right now, I think none of the customers are leaving them from our work

because these other AI products are not of the quality. And Adobe internally is cheering AI. They loved it when OpenAI Sora came out in the video of the woolly mammoths running in the quality. And Adobe internally is cheering AI. They loved it when OpenAI Sora came out in the video of the woolly mammoths running in the snow. They love that because it's more content to go into their editing engine. And as we've said, there is no AI editing engine. You effectively have to have colors, graphics, photography, all these things to make up a creative process. And Adobe dominates that category in the editing. So their view is that this is good.

With all these tools, it makes their platform even richer to edit. The question is, are we going to get an editing AI platform at some point? We don't see it yet. It could happen. But again, I think the AI worry seems to be a little overcooked in the near term.

Okay, and perhaps that's why we're seeing this big jump. More than 14% now in reaction to these results here in overtime. Brent Thill, thanks for joining us. Thanks. We're just minutes away from the start of Tesla's shareholder meeting, where we will get the results of a vote on Elon Musk's massive pay package. We will talk to an early shareholder about why he says he's, quote, begrudgingly voting to approve that payday. Stay with us. Welcome back to Overtime. Let's get to a CNBC News update with Bertha Coombs. Bertha.

John, Supreme Court Justice Clarence Thomas took three undisclosed trips aboard a private jet provided by Republican donor Harlan Crow, according to new documents released today by the Senate Judiciary Committee, which came from records that Crow himself turned over. The Democratic-controlled committee also noted that Justice Thomas did not include those additional trips on his financial disclosures received released last week. Ford Motors is ending its controversial EV dealership program. The program, which began in 2022, required store owners to invest upwards of a million dollars in order to sell the electric vehicles. Instead, Ford will open EV sales to all of its dealers in an effort to grow sales of the vehicles. And Tyson Foods' chief financial officer and the son of the company's chairman suspended today after he was arrested on drunk driving charges.

It comes about 18 months after John Tyson was arrested for criminal trespass and public intoxication after police found him asleep in someone else's home. Tyson Foods has named an interim CFO in his place. Morgan, back over to you. Bertha, thank you. And of course, he had joined us on the show with earnings the beginning of last month. Well, now breaking news on Tesla. Company shareholder meeting featuring the closely watched vote on Elon Musk's pay package.

It's about to start. Let's get to Phil LeBeau. He has the latest. Phil. Morgan, the question is, when do we get the results? Look, most of the votes have been cast. The people who are at the annual meeting, they can still cast their votes. But if you saw Elon Musk's post on X last night, it's pretty clear it's going to take a lot more than just the people at that meeting to change the way the vote was trending last night. Elon Musk put out a couple of charts, one for the pay package vote, the other one for the move from Delaware to Texas for reincorporation. And he said, look, both resolutions, in his opinion, they appear to be passing by wide margins. What's wide margins? We'll find out when the final totals come in. And again, this is not only for the $56 billion pay package, but also the move from Delaware to Texas.

Within the last hour, we've also heard from Kimball Musk, Elon's brother, also a Tesla board member. He posted a post on X saying, thank you, Tesla shareholders. We can now focus on building a great business and accelerating the world toward alternative energy. The distractions from Delaware violating shareholder rights and canceling arms length contracts are over. Goodbye, Delaware. You will not be missed. What will we be hearing about aside from this vote at the annual meeting? Well, there's going to certainly be some questions for Elon Musk about the state of the business, and that means what's happening with deliveries. Now, I doubt that they're going to give any kind of a guidance or anything that we can hang our hat on, but we will get their second quarter deliveries basically July 2nd, July 3rd, somewhere in that time range.

And that will let us know where they are relative to last year when they delivered 1.81 million vehicles, as you take a look at shares of Tesla in the last month, stocks moved higher in the last couple of weeks, largely on the belief that ultimately this pay package would be approved, guys. Again, the meeting starts in a couple of minutes, and then we expect somewhere within this meeting or shortly after the meeting, we will get the announced results from them on these two issues. Guys, back to you. So I just want to I just want to make sure I want to go through this with you quickly, Phil. And that is Tesla's headquarters, a move there. You have a vote in favor of it.

They can do that immediately. The pay package, however, is a legal dispute. Got it. So this is correct. One is one is just the reincorporation. And remember, even though the headquarters are in Texas, a lot of companies are incorporated in Delaware for a variety of reasons. Yeah, they are one of them. They would be reincorporated to Texas. So that can happen regardless of what happens with the pay package vote. And with regard to that, Morgan, as you mentioned, it's a legal dispute. Even if the shareholders say, give him the money, he deserves it, whatever your feelings are, the shareholders want him to have it,

ultimately, this still needs to be decided in Delaware courts. So this could influence what the judge says about the pay package, but ultimately, many believe this ultimately will go to the Delaware Supreme Court. All right. And that meeting now beginning as you were talking, Phil, and continue to watch it, I'm sure. For more on Tesla, meanwhile, let's bring in an early investor to discuss this vote. Joining us now is Ibrahim Al-Husseini, Full Cycle founder and managing partner. Ibrahim, good to see you. Tesla board members saying here the distractions are over declaring victory, but board critics might say Elon Musk has been the one distracted by other companies. First, the Twitter purchase, and now we've got XAI. What do you say? Gosh, is he distracted? Of course he's distracted distracted but somehow he's also superhuman and

and can manage to run all these companies relatively well all at the same time you know barring maybe x i think that's debatable whether it's being run well or not but um yeah it seems like you know even myself who's uh somebody mentioned earlier that I'm begrudgingly voting. Yes. Yes. I'm unenthusiastically voted. Yes. And that is primarily because the performance of the company has not been what we're used to. You know, there's 50,000 Teslas sitting in, you can, I think somebody said, you can see them from space parked somewhere because the supply is now exceeding demand. So, you know, those days are over when you waited, you know, you signed up, you waited six months to get your car. Now, you know, the use prices of Teslas is, you know, through the floor.

So it's a different kind of company. And those are the things that irk me as a shareholder. But the pay package was approved by shareholders. We wrote it to a trillion dollars. Obviously, things have, you know, have come nowhere near that lately. But, you know, the shareholders approved it. The board approved it. He earned it. He met the milestones. So we need to honor our agreements. And so I wonder what's next, because, yeah, the stock peaked above 400 bucks a share. Now it's under 200, bumping around a level where it was in late 2020, I believe. And is is the Musk premium less for the multiple than it used to be?

What has to happen, you think, here as a shareholder for it to be, you know, worth what it was? And I think you said that you would buy in a major stake again in the 140s. So I still think we are benefiting from a Musk premium because it's basically investing in Elon Musk companies is a bet on the future. If you look at Tesla as a stock today, the earnings, deliveries, this is not based on profitability or deliveries or any of these fundamentals. It's based on a bet for the future. That's why the stock is held, what is it, 42% by retail investors. These are the institutional investors would not give it this kind of premium, but a lot of institutions would get into the stock when you

have 42% retail investors. The man owns Twitter. He gets to get everybody excited by dangling carrots and innuendo on Twitter and people get frothy and excited and the stock goes up. It's not the kind of business that I think is becoming of the brilliance of the man and the brilliance of the technology that he gets behind. But, you know, it allowed him to meet all these milestones and thus he deserves his pay package. I mean, it's worth putting some context around the pay package. And you touched on it before, but it was it was first approved in 2018. At the time, Tesla was bleeding cash and there were a lot of shorts. There were a lot of skeptics. And that pay package looked fiercely ambitious at the time. It does seem like we're at this new juncture, to your point, where EV demand has softened. Perhaps you're seeing supply capacity outpace demand,

but we're also on the eve, potentially, where there's a lot of skepticism, again, around autonomous driving and robo-taxis. So how much now hinges on that vision being carried out? Do you expect we're going to hear anything about it today? I don't know what's about to be announced today. And, you know, I'm sure whatever it's going to be, it's going to be painted beautifully. It's going to be very rosy and very exciting. I hope he doesn't dance. You know, that was painful.

But other than that, I'm sure we're going to hear a very ambitious vision of the future. And I'm sure the numbers will be as usual, the front loaded, and we will see X by this very short window date. And of course, we eventually will see it. It's just never within the window that it's projected and pronounced to be. Now, you're still a stockholder, but you've sold quite a bit of your, I think, earlier stake ahead of this fall, if I'm not mistaken. What would it take for you to buy back in in a bigger way? Like I said, I'd buy back in at around 140. I think that's a fair value for the stock.

And, you know, and it's a long-term hold for me. I don't, even at 140, I'm not going to be trading it up and down as it goes through whatever roller coaster it's about to go through. Ibrahim, it seems like we moved into different territory with Tesla with the price cuts, right? We saw that happening. It sort of signaled the need, I guess, to move vehicles. A lot of these vehicles still haven't moved. And we got this issue of Chinese EVs out there that appear quality wise to be OK to the point where Europe and considerations in the U.S. are slapping tariffs on these things with the with the thought that if they're allowed into global markets, they'll flood out everything else.

How much of a concern should that be for Tesla shareholders and for Elon Musk? I'm in Europe right now. You know, they're everywhere. So, you know, if the strategy for Tesla is to hope the U.S. never lets them in, you know, the U.S. is a good portion of the car market in the world, but that's not a strategy. You know, in Europe, you see these cars, brands I've never seen before. They look great. I'm sure they perform fine. So unfortunately, this is the future and the prices of these cars is not going to be commanding a premium. It's kind of a race to the bottom on the prices of these things and the quality keeps getting better and better. It is interesting to watch these tariff dynamics, though, between the China and U.S. and now Europe implementing tariffs on some Chinese EVs as well. A lot going on.

Ibrahim Al-Husseini, thank you for joining us as we do monitor this Tesla shareholder meeting. Well, don't go anywhere. We will have much more on it and the results of Elon Musk's pay package vote as we continue to keep an eye on this shareholder meeting. Welcome back to Overtime. Tesla's shareholder meeting is underway. Let's bring in Mike Santoli. Mike, shares of Tesla ended the day up almost 3%. We're actually higher on the month, higher on the quarter. We're still down more than 26%, though, on the year.

I mean, we always talk about the mag seven, but we've also had the debate about whether it's still seven because of the fall Tesla has had from Greece. I guess just to speak to what goes into this moment with this company valued as such. Well, it was interesting to me to see the price action today. Presumably the market was trading on the assumption that Elon Musk's own post about the fact that he thought that there were enough votes to give him that pay package or endorse that pay package potentially was something that was a test of market sentiment as to what would have been the counterfactual. Let's say if it was defeated, he doesn't get it. Would the stock have gone down? Maybe that's what the tests today show. But of course, it was coming from a relatively depressed level, right?

In the 170s area that had been just, you know, just over 180. So, in other words, I don't know that the hurdle was very high. I do find it interesting, you know, people have basically said we've kind of, if you've been a long-term shareholder, you either kind of endorsed it tacitly or explicitly that he was going to get this money. But the gross dollar value has grown so much. I think that's why it's become so contentious in the grand scheme of things. I mean, most CEO compensation packages are kind of skewed toward making sure they get the money. So I don't know that that's much of an exception in itself here.

Mike, the part of this that I find most fascinating is I think at the level where the stock is now, right, if this had been where the stock topped out, he wouldn't have gotten the full package, right? I think I should refresh my memory on the strike prices, but I think that might be right. The most aggressive upside target may not have been that. Yeah, so you probably would have gotten a bunch of money, or stock, I should say, but maybe not the whole thing.

And yet the framing of this whole argument is, boy, we really need to give him this amount of stock as promised to incentivize him to continue to do this. It also seems to me possible to argue that, boy, well, he was bullish on the stock when it was at 400-plus. Here, it sure is priced nicely. So wouldn't that be incentive in and of itself? Right. I mean, there has been this bit of dissonance in there. The idea that him owning

13 percent of the company, which I think is his current stake, is not enough somehow on an ongoing basis to be enough incentive to participate in any further upside, given he owns so much of the company. Obviously, it's a little more about if he doesn't get this, is he going to disengage from Tesla and is there downside risk to the company there? It's really complicated, though, because if I look at companies, you know, the routine mode of founder-driven big tech companies, I know Elon's not technically the founder of Tesla, but it is control shares where they have voting control forever, like at Google. And, you know, so that's not

necessarily equitable on a long term basis. The same thing with Meta. So it's you know, the rules are written a lot of times for the benefit of those people on top. He's managing to do things here that a lot of founders can't do both operationally and shareholder influence wise. Though, Mike Santoli, thank you. As we await the results of that vote on Musk's pay package up next, we're going to speak with an investor in another one of Musk's companies, SpaceX. Be right back. Tesla shareholder meeting is underway. We're still waiting for the official results of Musk's pay package. Meantime, for investors looking to get exposure to Elon Musk's other companies, SpaceX, the Destiny Tech 100 fund, ticker DXYZ, offers a way to play private tech companies like SpaceX,

but also Epic Games, OpenAI, closed-end fund. It's listed on the NYSE, began trading in March. Joining us here on set, Destiny founder and CEO Sohail Prasad. Sohail, it's good to have you on. And I am going to start right there because as an investor in the biggest company started and run by Elon Musk that isn't Tesla. How much do you factor in when investing in a name like SpaceX? The fact that he does have so many different projects. Thanks for having me on. We keep we're really excited about SpaceX as a company. We think it's an important part of the American space ecosystem.

And so the fact that Elon has had so much success, runs multiple successful companies is important, but doesn't change our excitement about the company. Okay. In terms of what you are excited about, what is it? And I guess just as importantly, on a day where you have reports about a lawsuit by former employees of SpaceX alleging unfair firings and tied to sexual harassment. I mean, when you see that happen with a publicly traded company, there tends to be a lot of fanfare attached to it. Not so much necessarily with a private company. So do things like that give you pause? No. You know, as you

said, there ends up being a lot of fanfare for publicly traded companies. Part of a company's growth in the privilege of being private is the ability to grow while having these matters handled with less fanfare. And so for Destiny, what we've been trying to do is give people the benefit of being able to access these companies that they know and love, but allowing the companies to still stay private and have the benefits that confers. Trying to look at this from the perspective of an investor, it's hard to understand, I would imagine, the weighting of various startups within this whole bundle that you've created. And then there's a premium to net asset value where this is trading. So not only is it hard to know how much any individual startup is weighted,

but then you're paying more for it than a private investor is going to pay. So how do you answer somebody who says, how do I know if I'm getting a good deal on any individual company here when they're bundled together and it's hard to know what they're worth? Yeah, I'm glad you asked, John. When you actually think about what we set out to do with Destiny, we set out to create a fund that could bridge the public and private markets. And our target over time is to have 100 of the top venture-backed private technology companies. So when we listed, we had 23 companies. And right now, we're still on this journey while building publicly or building out that

portfolio. So it's really important to understand that our portfolio composition is still going to change. Right now is just a point in time. And so the relative weightings of individual companies, of sectors will continue to evolve as we add more names to the portfolio. So it's really an investment in your judgment, in a sense. I almost see it as there are two phases of this journey. One is right now while we're building the fund in public. We're going to go from 23 companies, grow and evolve that portfolio, get to 100. And so there's

a class of investor for whom that's interesting. But over time, long term, we're thinking about what's the best way to bridge the public and private capital markets. And then, you know, some people might want to wait to see what that portfolio shapes out to look like. So, I mean, right now, and I know you said you're building this in real time here, but right now you're top three holding SpaceX, Axiom Space, Boom Supersonic. There's a lot of aerospace happening here. What types of companies, what areas of the startup ecosystem are you not invested in, but you're excited about and trying to invest in? So we built out the portfolio heavily between 2022, 2023. We are vertical agnostic. And so we're investing across verticals. There's a lot

of opportunity, obviously, with AI to keep adding companies at every layer of the value chain. So from the infrastructure and the silicon level, all the way up to the applications that can benefit from that, from a consumer enterprise level. So there are a number of companies and founders and VCs that we're talking to right now. Okay. Sahil, thanks for joining us here. Thanks for having me. Good to see you.

Up next, all the overtime movers that you need to know about as we count down to the earnings calls from Adobe and RH at the top of the hour. Be right back. The Adobe are spiking in overtime, the company topping earnings and revenue estimates and giving strong EPS guidance for the third quarter. Full year earnings guidance was strong as well. Shares are up 14 percent and RH earnings are out as well. Stevens has those for us. Hey, Morgan, RH is down 10 percent after a disappointing quarter. The company reporting an adjusted loss of 40 cents per share. That was much wider than the 12 cent loss analysts were looking for. Revenue at 727 million

was slightly ahead of estimates. Now, the company did say that they are operating in the most challenging housing market in three decades. Once again, RH down 10%. John? Pippa, thanks. Tesla's meeting going on right now, currently running through shareholder proposals. We'll continue monitoring the meeting as we await the vote on results for Elon Musk's pay package. Welcome back. We are still awaiting official results of the Tesla vote on Elon Musk's pay package and Adobe is holding on to gains after hours up 14 percent. Yeah, strong move for Adobe. Tesla finished the day up. The S&P and the Nasdaq both finished

at record highs. That does it for us at Overtime. Fast money starts now.