C (2:17)

The laughs are bigger, the stakes are higher, and the hot sauce is real. You can actually buy it on Amazon.

B (2:23)

Jury Duty presents Company Retreat is streaming now on Prime Video. Clock in and grab your popcorn. It's time to root for the underdog.

C (2:30)

The big one is here. Space X Confidentially filed for an IPO yesterday, setting up what is expected to be the largest public debut of all time. Sometime this summer SpaceX started as a rocket company but has since grown into a conglomerate of Elon Musk side projects. The rocket company combined with his AI company X in February, which had previously combined with his social media platform X to create an Elon Stein's monster worth trillions. And this group project of companies with X in their name, it looks like Space X will be doing much of the heavy lifting. It's the leader in the rocket launch business, receiving billions of dollars in government contracts the to be the workhorse of the US space program. It also has Starlink, the satellite based Internet company that is now the company's main cash flow generator. Xai is sort of the personality hire of the group, burning a lot more money than it makes. As Elon tries to keep up in the AI race, it all adds up to a valuation that is projected to be somewhere in the $1.75 trillion range, which would raise about $75 billion, by far the largest IPO of all time, leaving Saudi Aramco in the dust. It's, it is a gaudy number, but as Tesla has shown, people are very comfortable betting on Elon's vision for the future. Neal as we get closer to the ipo, investors will get a peek at the company's financial performance to see what's under the hood. But by all accounts, this is a generational debut in the making.

B (3:54)

I'm excited. Are you excited? This is exciting to be so fun. I mean mega IPOs, we haven't had many of them in the past few years and it's really exciting that SpaceX is going to public because I mean just Wall street has never seen anything like this. Like this particular scale, Space X potentially could raise up to $75 billion. In second place, the current record holder for IPOs is Saudi Aramco with just 29 billion. So the scale is truly unimaginable. It's truly galactic. Like SpaceX's ambitions. According to Dan Pramac, he put it more in perspective. This would raise more than all US listings did in 2024 and 2025 combined. The entire US IPO market has only raised more money in two of the past 10 years. And SpaceX will also become the first company will attempt to become the first company to ever go public at a valuation of $1 trillion or more. If it goes public, when it goes public, it'll be immediately worth more than Walmart, Exxon Mobil or Meta. So this is truly gigantic in its size.

C (4:58)

It was very funny too. The amount of banks involved is just a who's who of Wall street. There are 21 banks lined help with this giant IPO. The project has a code name. How many IPOs get a code name? It's codenamed Apex. And I saw a lot of jokes online that was, if your bank that you work at, was it included in this ipo, then you're not going to make it, unfortunately. And as I said, this is a confidential IPO filing. So we don't actually know what the financial performance of this company is yet. There have been some hints over the past few years. In June, Elon Musk posted on social media that he expected Space X's revenue to reach $15.5 billion in 2025. Only 1.1 billion of that is coming from NASA. That is up from $7.4 billion in 2023. Starlink alone, which is the Internet satellite company, generated $8 billion in sales in 2024. Now the ugly stepchild in the room is X, which is burning a lot of money. Xi allegedly is burning $1 billion per month. So, three, that kind of brought a little bit of uncertainty into this debut because SpaceX is a business very fun. You know, it's dominating rocket launches. X AI, on the other hand, not so fun. What if you just wanted exposure to the space company? Now you have to have exposure to Elon's entire portfolio of companies that had some people kind of scratching their head saying, was this the right move to merge these companies?

B (6:24)

Definitely put a little bit of a cloud over the ipo, because people were excited just to invest in Space X, and it's currently dominating the space industry anywhere around the world. But Elon Musk, of course, has this vision that goes beyond our feeble minds, and that is to combine X AI, which he wants to be an AI competitor, with the likes of ChatGPT or OpenAI and Anthropic and Microsoft and Google. He wants them to be as big as that and combine that with Space X and you get what is building the infrastructure for orbital data centers. He wants to put a million data centers into space by combining Space X and X. So he looks at this from a vertical integration perspective and says, okay, this makes a lot of sense to have Grok Xi, Starlink, SpaceX, Starship, all combined into one conglomerate that is controlled by him. Because that is the ultimate vision. And it's also one of the reasons, probably the main reason, why he needs to IPO this thing very fast, because X is losing a lot of money putting $1 million, putting a million data centers into space. I don't know the actual price tag of that, but it's going to cost a ton of money, and going public gets you that funding that you need.

C (7:31)

Meanwhile, as we're on the topic of space, the Artemis 2 mission did successfully launch yesterday. There was a few delays while it was on the launch pad. Eventually launched about 11 minutes late, but it went up into the sky. It was beautiful, you know, framed against this awesome sunset. And it just made everyone very pumped for space travel. Again, there was an issue once they went to orbit, and it was a potty problem on their Artemis 2 moonship. It's not their number one priority. That's a little pee joke because the glitch in the space toilet made it so that they could, you know, poop in the toilet, but they could not pee in the toilet. So this was like the big, you know, troubleshooting that was happening on the mission. I guess if you're going on a mission to deep space and the only thing that is broken is the toilet, you'll take that. But it was very funny that that was kind of like the, the big bug in the original mission was the toilet was broken.

B (8:23)

God, I love rocket launches. It was so fun to watch. I mean, we were all at this place ready to sit down for dinner for Seder, and then, you know, the lady was like, we need, we all need to sit down. Rang the bell, and then like 20 people gathered around the TV and we were just watching the rocket launch and we're like, no, five more minutes until it goes up. And there was just. You could not hear a sound. Everyone was so glued to the TV to see, to see this rocket launch. So looks like they're on their way to the moon to go around the moon. And they probably will reach it if all things go well, by Monday, April 6th. Moving on. Nike is finding out that reviving its business is a little more challenging than saying, just do it. Shares plunged 15% yesterday after the sportswear giant dropped a shockingly bad earnings report on Tuesday showing that the much hyped turnaround strategy is not just failing to kickstart sales. It might be sending Nike into reverse. And investors are losing patience. A huge problem area is China, a key market where revenue is projected to fall by up to 20% in the current quarter. Another glaring weak spot, Converse, which your fashion friends already know is decidedly out. Sales have cratered 35% from a year earlier to a 15 year low. It all means CEO Elliot Hill is not having any fun. The Nike veteran was brought in 18 months ago to make Nike's business trajectory resemble its logo but it's been more of a slog than anticipated. Bloomberg reported that at an all hands meeting on Tuesday, Hill told staff. I'm so tired and I know you are too of talking about fixing this business. I want to move to inspiring and driving growth and having fun. But Toby, there's a long way to go before the smiles come back to Beaverton.

C (9:58)

Yeah, China is a real issue right now and part of the reason why Nike's not doing so well is local competition has finally started to heat up and is sort of eating Nike's lunch a little bit. Anta Sports is a upstart brand on the domestic side of things. They saw sales jump start 13% in 2025. They basically undercut Nike in price too. So Nike is seen as a premium offering. But these other shoes are getting up to the same quality as Nike but are sold for a lot less money. If you look on our running shoe geeks, 1 out of 18 posts mentioned a major Chinese running shoe brand that is up from 1 out of every 40 posts the previous quarter. So clearly Chinese running shoes are infiltrating the US market as well. Leaning is a big name to keep an eye on. But yes, China is a big growth driver for Nike and if they can't figure out that market, while you know, also facing some headwinds in the domestic market when it comes to their fashion brands, Nike's not off to a good start.

B (10:59)

No, I mean this turnaround is taking way longer than anticipated. What Elliot Hill was brought in as CEO a year and a half ago is trying to do is move Nike away from those more fashion forward sneakers to more performance sneakers that were a hit with the running community. Right. That's what Nike made. That's what made Nike Nike in the early years and they got a little bit away from that and let on and Hoka and Brooks and these other brands kind of steal the spotlight from those from the runners from the top tier athletes that Nike really cut its teeth on. So he's trying to move away to that and that seems to be working. But you know in fits and starts the so called performance products like shoes for runners sales climbed more than 20% and, and it's sort of gorp core offerings. It has this line called all conditions gear brand where you can wear it outside and hiking and stuff like that that is going well as well. But as we're seeing with Lululemon and other brands in the athleisure space, they're getting absolutely wrecked right now. People are just dressing up a little bit more. They're looking a little more presentable and they're moving away from athleisure that dominated, you know, from 2020-2025. And Nike's really caught up with that because they have a ton of inventory in that space they're just trying to get rid of.

C (12:08)

They do have an ace in the hole, though, and that is, you know, their backyard this summer. Adidas actually tends to outperform Nike when it comes to soccer. But again, this World cup is literally on Nike's home turf. It is in North America. So that is an advantage for the brand. Hopefully this is a moment that they can capitalize on and show, like, hey, we are still Nike. We're still the big dogs when it comes to sports. Check out this awesome mega event that we're going to have a lot of athletes wearing our jerseys, a lot of athletes weighing our cleats. Maybe that judges up its financial performance in the coming quarters. Moving on. Anthropic needs some flex seal because it's springing leaks left and right. Last Thursday, Fortune reported that the AI company had accidentally made thousands of internal files publicly available, including an announcement of a powerful new model that is waiting in the wings. And then earlier this week, the big one. Nearly 512,000 lines of source code were accidentally posted on laying out the blueprint for cloud code, its most valuable product. It wasn't the actual AI model itself that was posted, but it did paint a picture of how Anthropic coaxes it to behave and perform tasks autonomously for millions of users. According to the Wall Street Journal, the leak was a gold mine for competitors who want to know what Anthropic Secret sauce is. One of the leaked features involves the model revisiting past tasks to remember what it's learned, a process Anthropic refers to as dreaming. There's also a piece that tells Claud Code to hide the fact that it's an AI in certain situations, like when it's pushing code to GitHub. Someone found a reference to a Tamagotchi style virtual pet called Buddy that people can interact with. If Claude is Oz. This link gave everyone a pretty good look behind the curtain. Neil this is a double whammy for Anthropic. There's the hit to its reputation as the quote unquote safe AI company, and then there's the hit to its actual business, since competitors now know some of its inner workings and it is a cloud astrophe for developers.

B (14:05)

This is like a Kid going to Disney World for the first time, you have the world's, maybe the world's foremost AI company who employs the smartest AI nerds on planet Earth, Basically just handing you their closely guarded trade secrets. It's like a free world class engineering education. No surprise that this spread like absolute wildfire in developer communities. So if you're just a hobbyist developer or someone who's in this industry, I mean it's just an amazing education to be able to look at how the smartest people in the industry are putting together something as complex as cloud code. And then if you're a competitor, I mean this is like finding $1,100 thousand dollar bill in your pocket you didn't know was there because you know these, these AI companies are fighting tooth and nail for every piece of market share in this business. And coding is a huge part of that. Cloud code is a huge part of Anthropic's business. It's their cash cow. The product reached more than $2.5 billion in annualized revenue recently. So this is Anthropic's big business and it basically just gave the secrets away.

C (15:03)

Where you find in thousand dollar bills lying around, I got to find one of those in my pocket. But you're right, I think there was sort of this giddiness around peeking through this code because it turned out to be a lot more art than science. I mean that dreaming function is kind of a imprecise science of hey, remember everything you learn and kind of compress it into a packet that you can remember going forward. But then there is also some just very funny lists that were released. There's a list of spinner verbs that include scurrying, recombobulating and topsy turvy. These are official phrases that Anthropic is using to coax its model to do what you want. Then there's cursing analytics that were also dropped. Claude will log swear words. As you know, the code is is dash negative. And basically Anthropic wants to track how often are you raging at your AI chatbot. So there's all. Even though you think that it's this magic black box, Anthropic is kind of just pushing it and pulling it in different directions and hoping that it can do what you want it to do. So that was the big takeaway is that is not an exact science by any means. Anthropocus is literally coaching their AI chatbots to do what they want. Just like you and I are. All right, we're going to take a quick break and come back with Neil's numbers right after this. Neil, you can start calling me Mr. Worldwide because I know how to manage a global team.

B (16:28)

So that name is definitely taken.

C (16:30)

But also how because I know about Deal. They help you hire, manage, pay and equip anyone anywhere.

B (16:37)

They keep HR payroll and it aligned in one platform so growth doesn't turn into tool sprawl.

C (16:43)

It can even make the hard parts of global work disappear so scaling Worldwide feels easier than it should.

B (16:49)

Head to d e l.com Morning Brew to book a demo. That's deal.com Morning Brew K Pop Demon

D (16:57)

Hunters, Haja Boy's Breakfast Meal and Hunt Tricks Meal have just dropped at McDonald's. They're calling this a battle for the fans. What do you say to that Rumi?

C (17:05)

It's not a battle.

B (17:07)

So glad the Saja Boys could take breakfast and give our meal the rest of the day. It is an honor to share.

C (17:12)

No, it's our honor.

B (17:14)

It is our larger honor.

D (17:16)

No really, stop. You can really feel the respect in this battle. Pick a meal to pick a side

B (17:24)

and participate in McDonald's while supplies last.

C (17:28)

Neil, it's dangerous to do your taxes alone.

B (17:31)

You're exactly right. Well, except the danger part. But that's why there's national admin night from TaxAct. There's social gatherings for getting through your to do list.

C (17:39)

Get ready for a night of fun finding deductions and filing your taxes with tax act. And right now you can file your federal and state return for just $49 through April 8th. Let's get together and get them over with.

B (17:53)

Visit taxact.comadmin-knight for details. That's taxact.com admin-knight welcome to Neil's Numbers, the segment where I share three stats in the week's news that won't help you do your taxes, but it will make you a more well rounded person. For my first number, hey, actually this might help you do your taxes. Early data show that the new overtime deduction is a smash hit. According to POLITICO, almost 20 million taxpayers have claimed the overtime break so far this tax season, showing up on about 23% of all returns and far outpacing most existing popular tax breaks like the mortgage interest deduction. The overtime deduction dates back to last July when President Trump signed the One Big Beautiful Bill act into law. Among other changes to the tax code, the overtime break allows couples to deduct up to $25,000 for certain types of work in specific circumstances. Apparently that has become an extremely popular thing to do. But many questions are still unanswered. Politico notes. First of all, we don't have information about why people are filing for the deduction, for instance, whether they're working more to claim it or they're just logging their normal long hours and are finally able to snag a break. Others are even more skeptical, saying that the numbers could be inflated. And as I mentioned, the tax law came into effect halfway through last year, and companies said it would be too complicated to calculate the amount available to each worker for the entirety of 2025. So without employer cooperation, it could be the case that many people are claiming the overtime deduction who aren't eligible for it either way. Toby, a surprise winner of tax season overtime.

C (19:25)

Yeah, when you look at other deductions that have been claimed that were introduced this year, it is lapping the other one, senior deductions, which you can get up to 6,000 per person. That was claimed by 17% of taxpayers. 10 tipped income deductions. Remember, this was a big talking point going into this tax bill, which allows you to claim deductions of up to $25,000 on tips only, 5% of filings. And then a car loan interest deduction was only claimed by 1.1%. So you have, over time, you know, being the lion's share by far the most popular new addition to the tax code this year. And just to remember, it is temporary. It is set to expire at the end of 2028. But as a lot of lawmakers have kind of said, once you introduce a temporary deduction, they have a habit of becoming permanent because, of course, no one wants to give up, you know, this awesome deduction that they've relied on for the last four years.

B (20:16)

My next number is for anyone considering grad school. In some areas, it's absolutely worth the cost, but in many others, including some of the most popular programs, it has a negligible impact on your future career earnings. A new report released by American University's Postsecondary Education and Economics Research found that you get the most bang for your buck in grad degrees relating to medicine, law and pharmacy. A medical doctorate, for instance, can expect their lifetime earnings to nearly triple, while a pharmacy doctorate's earnings are expected to jump by two thirds. But as the Washington Post reports, the advantage of going to grad school evaporates in other disciplines. When accounting for the time and cost of going to school, grad degrees in architecture and some types of engineering only saw a small increase in their lifetime earnings. While there were no gains and sometimes even negative ones for degrees in psychology, social work and curriculum and instruction. Toby, of course a lot of people go to grad school not to secure a more lucrative career. There's other reasons and many others get financial aid that reduce expenses. Still, the study should serve as a warning to do your research before taking the grad school plunge.

C (21:16)

Yeah, I thought it was interesting too that when looking into who is actually benefiting from this, there were women, there were full time students, there were people who had lower paying undergraduate degrees. But then also if you went to a school that had a higher US News and World Report ranking, you tended to have better outcomes. I mean, it seems really obvious on the surface, but not all grad degrees across industries are equal, but also not all graduate schools are equal. You should probably try to go to the best grad school possible within your respected field.

B (21:47)

For my final number do you find yourself a little more distracted as a driver? When there's new music you're itching to listen to, there's new evidence you absolutely are a worst driver. A new study has drawn a link between increased music streaming and driving deaths. In a working paper, researchers affiliated with Harvard Medical School found a link between the release days of the most streamed albums and an increase in US Traffic fatalities. To study distracted driving, the researchers looked at the release dates of the 10 most streamed albums between 2017 and 2022, which includes records from Taylor Swift, Drake, Bad Bunny and Kendrick Lamar. They found that on those album release days, music streaming on Spotify jumps by almost 40% and US traffic fatalities jump by almost 15%. Those numbers are in comparison to the 10 day window before and after the release dates to control for seasonal variables. It's a fascinating study. What's even more interesting perhaps is how they designed it in the first place. The researchers noted that the real world effects of smartphones on driving are very difficult to study because you can't ethically devise a randomized controlled trial where some people are injured or worse. So they search for a so called exogenous event that could reveal the impact of increased smartphone use on driving and they landed on popular album release dates. Very clever.

C (23:03)

This study was interesting in so many different ways. I do love that they found that this was the variable that they could use to study smartphone use in drivers. But also they found that accidents were more common in cars equipped equipped with Apple CarPlay. Which sounds counterintuitive because Apple CarPlay is supposed to replace looking at your phone. But researchers suspect that the fact that it mirrors your phone makes people a lot more willing to fiddle with their playlists while they are driving. So maybe the fact that you're like, oh, I'm not looking at my phone, I'm looking at Apple CarPlay here, that makes you more susceptible to taking your eyes off the road. And then the other thing that they noted too was there was an increase in fatal accidents and in a single occupant vehicle. So when you don't have, you know, the passenger, Princess D.J. if you will, taking over controls of the Ox, then you are, it's left to you. And that's why you take your eyes off the road. So just a very fascinating study from top to bottom. Make sure you keep your eyes on the road. Even though Bad Bunny has a fire. New album out.

B (24:04)

Let's sprint to the finish with some final headlines. Stocks are tumbling this morning and oil spiked over 6% after President Trump's primetime address offered mixed messages about the direction of the war. In speaking to the American people for 19 minutes, Trump vowed to hit Iran extremely hard over the next two to three weeks, but also said the war was, quote, nearing completion, though he didn't mention any specific timeline. As for the closure of the Strait of Hormuz, which has sparked an unfolding global economic emergency, Trump repeated his claim that it wasn't the US Problem to reopen it, telling the countries that rely on Middle Eastern oil to figure out a solution themselves. So investors didn't love what they heard from Trump, especially because he didn't really say anything. Knew the war grinds on.

C (24:45)

Yeah, people were annotating charts of futures plunging with each sentence he was saying and how it was affecting the market. It was just a big switch up of what many people thought were going to happen. Remember, oil dipped below $100 a barrel for the first time in weeks on Tuesday after Trump said that he expected US Military to wind down operations against Iran in two to three weeks. So the expectation that this was this speech was just going to further that sort of line of thinking that instead he said almost the exact opposite to past the verge in the woods. And Trump took the one of further escalation and prolonged uncertainty. Oil jumped 7%. Futures are down bigly. Wasn't what people wanted to hear. Moving on. If you think a Reese's cup isn't hitting like it used to, you are not alone. Brad Reese, the grandson of Reese's founder HB Reese, went full LinkedIn warrior back in February, publishing an open letter calling out Hershey for quietly swapping real milk chocolate for for cheaper ingredients across A bunch of Reese's products. He took to a podcast and delivered a beautifully dramatic quote. If Reese's can no longer be Reese's, then what else in our society is no longer sacred? The pressure got to Hershey's, and yesterday the company announced it's going back to classic recipes for all Reese's products starting next year. Which means real milk chocolate and real dark chocolate. Hershey's didn't actually mention Brad Reese or the public firestorm he started, but many are making the connection. Neil, does complaining really loudly on LinkedIn actually work?

B (26:13)

Yes, it seems like it does. Bullying companies online absolutely works. You got to punch up, can't punch down. But if you punch up to these companies, they will listen to their customers. Obviously happened with Cracker Barrel. We got back to the old logo with them Max at one point, which is Max. And we got them to go back to HBO Max through a prolonged campaign of bullying. So I think you have to say, well, we're three for three right now with Reese's going back to the original recipe. Finally, let's close out the show with some drama from the slopes of Mount Everest. Dozens of individuals have been charged in a poisoning scam that defrauded insurers of $20 million. Here's how it all went down. Allegedly, while on a climb, guides put baking soda in tourist food to induce an illness similar to altitude sickness. They then pressured the visitors to evacuate via emergency helicopters, who were also in on the scam. And then they build travel insurers for the exorbitant cost using forged medical in flight documents. Once the money was in their possession, the loot was split between all the perps involved. The hospitals that took in the patients, the helicopter companies, the trucking companies, and the guides themselves. All told, according to authorities, the scammers scored $19.7 million in fraudulent insurance payments.

C (27:22)

The first line of the New York Post piece about this was him a liars, which was just absolutely incredible. It feels like a really good scam to me because one, I wouldn't think twice about throwing up on Everest. Like, of course, I'm very high up in the world right now. I'm going to have altitude sickness. So that's the first thing. And then two, if I was throwing up on Everest, you're absolutely right. I would say call the helicopter. Call everyone. I need to get rescued because I don't want to have to navigate from the mountain. So in terms of all the scams you could pull on unsuspecting climbers on Everest, they had a good one going, even though they might have done it a little too much. If you're racking up $20 million in scam winnings, you probably should have stopped around the $10 million mark.

B (28:06)

Well, the whole, all the conditions that you mentioned make this Everest industry very ripe for scams. And this has been going on for, for many years. And Nepal authorities are trying to, to stamp it out once and for all because it's becoming a big issue for, for the climbing community. Okay. That is all the time we have. Thanks for starting your morning with us and have a wonderful Thursday. If you'd like to reach us, send an email to Morning Brew daily at Morning Broadcom or DM us on Instagram at the Daily Show. Let's roll the credits. Emily Milian is our supervising producer. Raymond Lu is our senior producer. Our producer is Olivia Graham, and our associate producer is Olivia Lake. Hair Makeup is thinking Twice about grad school. Devin Emery is our president and our show is a production of Morning Brew.

C (28:48)

Great show today, Neil. Let's run it back tomorrow.