The Rundown - Musk's xAI Buys X in $33B Deal, BlackRock's Purchase of Panama Canal Ports Delayed

Episode Date: March 31, 2025

Stock market update for March 31, 2025.

Public.com presents the rundown. Your daily market update in five minutes. My name is Zaid Admani, and today is Monday, March 31st. In today's episode, we get you ready for a big week. More tariffs are on the way, and a big jobs report is due on Friday. Then we tell you why Elon Musk is combining two of his companies and the details behind that deal. Then stick around to the end of the show to find out why CoreWeave stock keeps dropping and why the founder of Nikola Motors, Trevor Milton, is avoiding prison time.

We got a great show for you today. Let's go. The stock market ended last week on a sour note. The S&P 500 was down 2% on Friday. The NASDAQ lost 2.7%. And this sell-off capped off another losing week. There's starting to be some concerns about stackflation. You're going to start hearing that word being thrown around a lot.

Stackflation is when inflation is high. economic growth is flat with rising unemployment. It's not a great economic environment, very tricky to navigate, and we got some data on Friday showing that inflation was hotter than expected, and consumer spending is starting to slow down. We talked about those numbers on Friday's episode, so go check that out if you missed it. So stackflation fears are starting to drag down the markets, and overall, it's not been a great few weeks.

The S&P 500 has been in the red for five of the last seven weeks. Seems like the only people having a good time right now are gold investors, because gold continues to crush it, hitting a record high of $3,100 an ounce this morning. Gold has already up 18% this year, and it's on track to have the best quarter since 1986. So shout out to all my gold stands out there, including my mom. She's always telling me to buy gold, and I should have listened to her. Now, we got a big week coming up, especially when it comes to tariffs. On Wednesday, April 2nd, President Trump has promised for weeks now to slap reciprocal tariffs across the board.

He's calling that day Liberation Day. Now, we still don't know the details around these tariffs or what country's going to get slapped with what percentage. Or if this is just another negotiation tactic, but we should find out more information by Wednesday. The other big news this week is the jobs report. On Friday morning, the March jobs report will come out and we'll see how many jobs were added to the U.S. economy. That's going to be an important report to keep an eye on because it'll be a gauge of the overall health of the labor market. If the data starts showing the labor market is cooling off, that's really going to rammed. up the fears of stackflation. So those numbers will be pretty crucial. Right now, economists are

expecting 140,000 jobs to be added to the U.S. economy in the month of March. So we got a lot to stay on top of this week. I got a feeling the stock market's going to get pretty choppy, but we will be on top of everything. So make sure you guys are subscribed to the podcast and tuning in every day to stay in the loop. Let's run through some headlines. Elon Musk just bought Twitter. Again, On Friday, Elon Musk announced that his AI company, XAI, is buying X, formerly known as Twitter. This deal values the social media platform at $33 billion. Elon Musk said that XAI actually paid $45 billion for X because of the $12 billion in debt carried by the social media platform.

Now, that $45 billion purchase price is $1 billion more than the $44 billion that he paid to buy Twitter back in late 2022. So I guess the people that invested in Twitter with Elon back then came out in the green. Now, these two companies had already been closely working with each other. In fact, X took a $6 billion stake in XAI back in January, and XAI has been training their GROC AI model on X's user data, and X serves as a distribution platform for GROC. You know, it's actually built into the app at this point. These two companies will be jointly held by XAI holdings and it carries a valuation of more than $100 billion.

So I guess that's one less email address for Elon Musk to manage. I think there is something interesting here, though, besides the fact that Elon bailed himself and X investors out. You know, X's revenues had plummeted over the last couple of years as advertisers pulled out. But this deal shows that the actual value of X might be the actual data produced on the platform every day, because this data can be very useful to train AI models. And this could potentially boost the value of social media platforms moving forward. Just thinking out loud here, but I wonder what this.

means for a company like Reddit. They have a lot of user data as well and maybe they're going to start billing themselves as an AI company. I mean, Reddit already has a deal with Google and OpenAI to allow those companies to train their AI models using Reddit's data. But maybe Reddit eventually becomes a takeover target by one of these AI giants like a meta or OpenAI or maybe even Anthropic. So definitely something to keep an eye on me, especially since Reddit stock is down almost 50% from its all-time highs earlier this year. Let's shift gears and talk about Black Rock. Their deal to acquire the two Panama Canal ports earlier this year is in jeopardy now. The seller of those two ports, C.K. Hutchinson is facing intense pressures from the Chinese

government to back out of the deal. That's why the head of C.K. Hutchinson, the 96-year-old Hong Kong billionaire Li Kha Xing is considering delaying this deal, which Bloomberg says could increase the risk of an overall deal failure. Remember, back in February, BlackRock and a consortium of investors agreed to pay $19 billion to buy 43 ports around the world from C.K. Hutchinson. And two of those ports were located at the Panama Canal, which has gotten a lot of geopolitical attention these days. So it looks like the Chinese government doesn't want to see these ports in the hands of an American company. And they're doing whatever they can to stop this deal from happening. That includes launching antitrust investigations by authorities into C.K.

Hutchinson. Now, it's possible all of this could just be a 4D chess move. Maybe the Chinese government uses this deal along with the pending TikTok acquisition as a way to negotiate lower tariffs with the U.S. But it looks like trade tensions continue to heat up. Let's talk about some stocks making moves today. Hutt 8 shares are up this morning after the Bitcoin mining company agreed to a deal with the Trump family. Hutt 8 and Eric Trump are launching a company called American Bitcoin, which they say aims to

become the world's largest, most efficient pure play Bitcoin miner. while also building a robust strategic Bitcoin Reserve. American Data Centers, which is a company launched back in February by Eric Trump and Donald Trump, Jr, will merge with American Bitcoin and take a 20% stake, leaving Hutt 8 with a controlling 80% stake. As part of this agreement, Hut 8 will shift nearly 61,000 of its specialized Bitcoin mine miners to American Bitcoin. As a result, Hutt 8 shares are up around 5% this morning in reaction to this news. Now, on the flip side, shares of CoreWeave are down this morning on the company's

first full day of trading. Corweave had their IPO on Friday, and it didn't go so great. They actually opened below their IPO price of $40 and recovered a bit to close flat for the day. But there doesn't seem to be much investor enthusiasm for this AI infrastructure company. There's been some concerns about the fact that 77% of Corweave's revenue is from just two customers. And it's not a great time to go public either, given how volatile the markets have been, especially for a high-growth tech stock like Corweave. We actually talked more about Corweave and some of the concerns around their business on Friday's episode, so go check that out if you missed it. CoreWeave stock is down around 6% this morning.

Let's wrap the show with a fun fact. President Trump pardoned Trevor Milton, the founder of Nikola Motors, who was sentenced to four years of prison for defrauding investors and exaggerating the capabilities of the company's electric vehicles. Nikola Motors was one of the hottest stocks in the world a few years ago. They actually briefly passed Ford's market cap when they went public back in. 2020, but the company's rapid decline started to take shape when the short seller Hindenberg research called out NICLA for fraud. Trevor Milton, who was the CEO at the time, was ultimately

convicted for securities and wire fraud charges, and NICLA officially filed for bankruptcy back in February of this year. But it looks like Trevor Milton got a pardon. Well, all right, guys, that's the rundown for today. We got a pretty big week coming up with the reciprocal tariffs and the jobs report. So make sure you guys are tuning into the podcast every day. And if you guys enjoy the podcast and have like nine extra seconds. Consider giving us a five-star rating on Apple or Spotify. Leave us a comment on Spotify. All of that engagement really does help us out and it helps other people find the show. Thank you guys so much for listening. Shout out to Mike and Connor for all the help behind the scenes and we'll see you guys back here tomorrow.

This is the rundown. Your real-time resource for news events and trends in the markets. All views presented in the show reflect the opinions of the guests. You should not take any mention of a publicly traded security as a recommendation to buy, sell or hold that security. Run-down guests are not financial advisors and are not affiliated with public holdings or its subsidiaries. You should make your own financial and investment decisions or consult. Respected professionals. Learn more at public.com disclosures. In partnership with Zaidamani, brokerage services for U.S. listed, registered securities are offered by Open to the Public Investing Incorporated, member FINRA and SIPC.