Brew Markets — Episode Summary

Episode: Leverage: Musk’s Trillion Dollar Deal & American Eagle Beyond The Ads
Date: September 5, 2025
Host: Ann Berry (A), with producer John Curto (C)

Brief Overview

On today’s episode of Brew Markets, Ann Berry dives into two headline stock stories: Tesla’s proposed record-breaking $1 trillion pay package for CEO Elon Musk and American Eagle’s soaring stock price that isn’t quite backed up by its earnings reality. The episode also answers a listener question on how to invest in foreign companies via ADRs and wraps up with market trends, including Goldman Sachs’ major investment in T. Rowe Price and the evolving landscape of retirement funds.

Key Discussion Points

1. Tesla’s $1 Trillion CEO Pay Deal & Keyman Leverage

[00:01 – 03:59]

• Announcement: Tesla’s board has proposed a compensation package for Elon Musk worth up to $1 trillion if he achieves ambitious growth milestones over the next 10 years (Tesla must grow 8x to an $8.5 trillion valuation).
• Implications: While the scale is “eye-popping,” Ann Berry emphasizes the broader precedent this sets for public company CEOs and founder leverage.
• Voting Control: Musk currently owns about 20% of Tesla and is seeking more voting power; unlike Zuckerberg (Meta) or Google’s founders, he does not have majority control.
• Musk’s Stance:
  • “Sufficient voting control such that I cannot be ousted by activist investors is what matters to me.” — Elon Musk, [01:16]
  • “It's not a money thing, it's a reasonable control thing over the future of the company.” — Elon Musk, [01:33]
• Succession and Focus: The package also includes Tesla taking a stake in Musk’s X AI startup, and expects Musk to reduce his political involvement and focus on Tesla’s AI and robotics.
• Market Comparison: Ann poses provocative questions about what this precedent means for other star CEOs like Zuckerberg, Palantir’s Alex Karp, or Nvidia’s Jensen Huang, especially as these “mega cap” companies grow even more dominant in US equities.
• Stock Reaction: Tesla stock rose over 4% on the news.
• Memorable quote:
  • “Tesla has just changed the game when it comes to showing how far to go to keep these key people.” — Ann Berry, [03:48]

2. American Eagle — Stock Jump Versus Business Reality

[04:31 – 07:55]

• Stock Spike: American Eagle shares soared 38% in one day after earnings, spawning memes and social media buzz with celebrities like Sydney Sweeney and Travis Kelce.
• Actual Earnings:
  • Net revenue: $1.28B (down 1% YoY)
  • Comparable sales: down 1%
  • Guidance: Low single-digit growth in upcoming quarters; profit and revenue flat or down for full year 2025
  • “Down and flat are not the two numbers I expect to hear when I see a 38% share price increase.” — Ann Berry, [05:56]
• Marketing Impact Myth Bust:
  • Sydney Sweeney campaign: Only one week included in quarter’s results.
  • Travis Kelce campaign: Launched after the quarter ended.
  • Ann notes that the much-hyped celebrity marketing has not yet translated to significant financial impact.
  • “Awareness isn’t necessarily money yet...An uptick in engagement, which is fine, but that isn’t necessarily money yet.” — Ann Berry, [07:13]
• Conclusion: Ann expresses skepticism about the sustainability of the rally, calling out optimism but warning about a disconnect between hype and fundamentals.

3. How to Invest in Foreign Companies — ADR Explainer

[07:55 – 11:38]

• Listener Question [from Giles in Schenectady]: What is an ADR (American Depository Receipt) and how does it relate to buying foreign stocks like Nestle?
• ADRs Explained:
  • ADRs let US investors buy foreign company shares on US exchanges in dollars.
  • US banks buy the stock overseas and issue ADRs; investors buy the receipt, not the stock itself.
  • Advantages: Convenience, dividends paid in dollars, sidestep currency and timezone hassles.
  • “Think of ADRs as a great bridge into global investing. But it’s more like streaming a concert than actually being in the arena… You get a lot of the experience. But you don’t get to cheer in the crowd, you don’t get to vote on the encore.” — Ann Berry, [10:55]
• Nuances:
  • Not all ADRs have the same reporting/disclosure standards.
  • Voting rights are limited; direct ownership and certain stockholder benefits do not transfer to ADR holders.

4. Market Recap & Headlines

[11:57 – 15:19]

• Market Movement: S&P 500 hit a new all-time high, but volatility increased as concerns about the economy overshadowed initial optimism about a potential Fed rate cut.
• Lululemon: Shares dropped nearly 20% after cutting full-year guidance.
• Broadcom: Shares surged 15% after revealing a mystery client (widely believed to be OpenAI) committed $10 billion in orders.
• Chip Market: Ongoing dominance and news from AMD, Nvidia, and Broadcom, but not Intel — “We’ve got to start seeing some news coming out of that one,” Ann remarks.

5. Goldman Sachs & T. Rowe Price – A Billion Dollar Team-Up in Retirement Funds

[13:55 – 15:19]

• Big Move: Goldman Sachs is buying a $1B stake (3.5%) in asset manager T. Rowe Price.
• Why: To jointly offer retirement and wealth funds that invest in alternative assets (private equity, venture capital, private credit).
• Context: Follows a recent executive order pushing to allow more alternative assets in retirement plans (citing August 7th order by President Trump).
• Quote:
  • “For all of you working hard, saving hard, putting money away for retirement, this new asset class is going to matter to you. We’re going to bust the jargon, we’re going to shine the light on it and we’re going to keep watching all that’s unfolding in this space.” — Ann Berry, [15:15]

Notable Quotes & Memorable Moments

• Elon Musk, on control over Tesla:

  • “Sufficient voting control such that I cannot be ousted by activist investors is what matters to me.” ([01:16])
  • “It's not a money thing, it's a reasonable control thing over the future of the company.” ([01:33])

• Ann Berry, on Musk’s pay and power:

  • “Tesla has just changed the game when it comes to showing how far to go to keep these key people.” ([03:48])

• Ann Berry, on American Eagle’s stock jump:

  • “Down and flat are not the two numbers I expect to hear when I see a 38% share price increase.” ([05:56])

• Ann Berry, on ADRs:

  • “Think of ADRs as a great bridge into global investing. But it’s more like streaming a concert than actually being in the arena… you don’t get to vote on the encore.” ([10:55])

• Ann Berry, on the Goldman Sachs/T. Rowe Price partnership:

  • “For all of you working hard, saving hard, putting money away for retirement, this new asset class is going to matter to you.” ([15:15])

Timestamps for Key Segments

• [00:01] — Opening and Tesla’s $1T compensation package
• [01:16] — Elon Musk on voting control and compensation
• [04:31] — American Eagle earnings and stock analysis
• [07:55] — Explanation of ADRs and global investing
• [11:57] — Market wrap-up: S&P 500, Lululemon, Broadcom, OpenAI
• [13:55] — Goldman Sachs and T. Rowe Price’s team-up in retirement funds

Overall Tone & Style

Ann Berry’s delivery is sharp, skeptical where warranted, and sprinkled with humor and real-talk explanations. The tone is brisk, jargon-busting, and focused on practical implications for everyday investors.

Additional Notes

• The show avoids hype, especially with American Eagle, instead delivering sober analysis on what numbers actually support.
• Listeners are encouraged to send questions (with the “FTSE Friday” running joke).
• Ann previews upcoming deep-dives into alternative investments and promises further demystification for listeners preparing for retirement.

This episode is a packed, insightful breakdown of headline market moves and what they really mean for investors navigating both familiar and global opportunities.