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Rich Habits Podcast
SpaceX's 2026 IPO, Disney's $1B Investment in OpenAI, & Warby Parker's AI Glasses
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- [00:01]
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- [01:04]
Austin Hankowitz
The Rich Habits Radar, a new Friday episode of the Rich Habits Podcast, where every Friday we're coming at you with the biggest headlines impacting you and your money. My name is Austin Hankowitz. I'm joined by my co host Robert Kroke, and the three things sitting at the top of our Rich Habits radar this week include the Federal Reserve cutting interest rates on Wednesday, Disney's $1 billion investment to OpenAI, and Elon Musk confirming a SpaceX IPO is right around the corner, and be sure to stick around to the end to learn more about Dolly Parton and how she's disrupting the gas station industry. That'll be a fun one, Robert. So let's jump into our first story.
- [01:43]
Robert Kroke
Yes, the Federal Reserve cut interest rates by 25 basis points. Federal Reserve officials cut interest rates for a third straight meeting on Wednesday, but signaled they might be done for now as there has been an unusual division for what to do next. The Fed voted 9 to 3 for the rate cut, which is the first time in six years that three officials casted dissents. Two officials thought the reduction wasn't warranted, while another favored a larger half point rate cut.
- [02:10]
Austin Hankowitz
It's pretty obvious that progress on inflation has stalled, which means the only reason the Fed is cutting interest rates right now and will continue to cut interest rates in the future is because of the labor market. The decision to reduce the federal funds rate by that 25 basis points is aimed at helping an anticipated slowdown in hiring, and we're definitely seeing that Right now. Now, despite these disagreements, Jerome Powell defended the decision to cut interest rates rather than waiting until the next Fed meeting, which will take place in late January. An interesting observation is that the Fed no longer described the unemployment rate as low in their prepared remarks. At the moment, the unemployment rate is around 4.4%.
- [02:53]
Robert Kroke
Jerome Powell talked about the cuts that began in September as insurance against a weakening labor market, something we're starting to experience. He first discussed this in his address at Jackson Hole in August. But as we all know, rate cuts don't equal economic impact overnight. And it can take time for those rate reductions to influence economic conditions. So what does this mean for you and your money?
- [03:15]
Austin Hankowitz
I'll go first here, Robert. As we discussed in August, Jerome Powell and the Fed are more so concerned about the weakening labor market than they are with inflation. Right now, inflation is decisively above their 2% target. But it is obvious that Jerome Powell instead cares more about ensuring that unemployment rate does not breach the 5% headline. Because remember, every 1% that unemployment rate climbs, 1.6 million Americans lose their job and it's already climbed by 1% over the last two years. Additionally, every 1% that the unemployment rate climbs, American GDP theoretically is supposed to fall by 2%, which is equivalent to $560 billion of GDP.
- [04:02]
Robert Kroke
We've been saying this for months now. As long as the Fed continues to cut interest rates and the US economy avoids a recession, history tells us the stock market will rise. 16 of the last 16 times the Fed cut interest rates within 1% of stock market all time highs. The markets were in the green over the next 12 months with an average return of 15%.
- [04:24]
Austin Hankowitz
Yeah, so we're seeing the Fed cut interest rates. They're kind of saying maybe not going forward we might see. So in my opinion, Robert, I could be wrong here, but I think we're going to see a little bit more volatility than we might have expected. Everyone was hoping for more rate cuts in the new year. Now they're just modeling for one rate cut in 2026, one rate cut in 2027. So make sure that your portfolio isn't just a bunch of high beta unprofitable technology stocks, because those are the ones that normally get hit pretty badly when the Fed decides to pause their interest rate cuts. Now let's jump to our story, which is Disney investing $1 billion in OpenAI. So Disney is making a billion dollar investment in OpenAI that will allow the company to use its characters and intellectual properties to generate short user prompted social videos on their Sora app. Now Disney has a three year licensing deal with OpenAI and it will let users generate videos using Sora for more than 200 Disney, Marvel, Star wars and Pixar characters. The companies announced this deal a day after literally one day after Disney sent a cease and desist letter to Google accusing the company of infringing Disney's copyrights on a massive scale. The Disney letter to Google included dozens of images and screenshots of videos created with Google's Gemini, Nano, Banana and VEO apps, and those videos in screenshots featured Disney owned characters like Darth Vader, Homer Simpson and Spider Man.
- [05:50]
Robert Kroke
OpenAI will pay Disney to use characters in Sora. The companies didn't disclose financial terms of the arrangement, but in addition to the $1 billion investment, Disney is getting warrants to buy more stock in OpenAI at a whopping $500 billion valuation. The partnership is a result of nearly two years of talks and negotiations between the two companies, which accelerated this summer after OpenAI showed Disney Sora 2 and its accompanying short form video app before they launched it publicly in September. So what does this mean for your money? Let's dig into that right now. It's obvious that IP and brand equity of these companies is really important as we all navigate user prompted AI content for the future. And it seems like Disney is trying to get ahead of this with this OpenAI partnership. According to the Wall Street Journal article, Disney is specifically excited about this not because they're getting paid for their ip, but instead because they believe this is a way to get younger AI fluent audiences subscribing to their high profit Disney plus streaming service.
- [06:55]
Austin Hankowitz
Yeah, their CEO expects Sora generated content to even be spotlighted on Disney plus. I'm a Disney plus subscriber, I'm in a Marvel Movie marathon right now, so maybe I'll see Thor do something weird with his hammer here soon, who knows? But the deal will allow Disney to deploy Chat GPT to employees and use other OpenAI tools to create new products and services for their customers. The partnership is exclusive for one year, which after Disney can make similar arrangements with other AI companies and I imagine they will. I don't know if it's going to be Google as obviously they just sent them a cease and desist letter, but maybe other AI companies that help with, you know, prompting generations, stuff like that can train on some of these characters and we'll see more Disney everywhere. Who knows?
- [07:38]
Robert Kroke
I think it's a really smart move because there is a world that's happening right before our eyes Right now where we're going to see whole entire movies made through AI and without even real actors. So it's a pretty crazy time moving forward for not only the streaming industry, but the movie industry in general. So it'll be exciting to see what happens. Our final headline today is Elon Musk confirming a SpaceX IPO could be right around the corner. Elon Musk has finally broken the silence and it's official. SpaceX is heading for an IPO sometime in 2026 or 2027. The Wall Street Journal and the Information first reported about a possible IPO last Friday, and Bloomberg followed that up on Tuesday evening with reports suggesting the company would target a $1.5 trillion valuation, that is with a T, which is crazy. This would allow SpaceX to raise in excess of $30 billion leading into that IPO. So raising tens of billions of dollars over the next 18 months would allow Elon Musk to have significant capital to deploy at Space X as he influences and partakes in the rise of AI.
- [08:44]
Austin Hankowitz
Yeah, that's nuts. One and a half trillion. My goodness. So, in the near term, the company plans to develop version of the Starlink satellite to serve as a foundation for building data centers in space. Let me say that again. They're making satellites to put data centers in space. That's crazy. But Elon is actually quoted saying SpaceX will be doing this on his social media platform X, but for using a next generation Starlink satellite manufactured on Earth. That's just the beginning of his vision. The quote is the level beyond that is constructing satellite factories on the moon and using a driver like an electromagnetic railgun to accelerate AI satellites to lunar escape velocity without the need for rockets. What in the world? This is not even in the world. This is out of our world. What? What in the heck is going on?
- [09:37]
Robert Kroke
Robert, we are in a crazy place for all of this. I am so glad to be taking part of it with you in our investing strategies and in the Rich Habits podcast Rich Habits Network. But it is crazy time. And based on some of the projected analyses and SpaceX is expected to have in the neighborhood of 22 to 24 billion dollars in revenue next year. With a large infusion of cash, SpaceX will be able to go much faster and use this cash to design and build the satellites and launch the rockets to deploy data centers in space. That's hard for me to even say because it's so crazy that this is our reality, thinking that data centers in space could actually happen and could function properly and help the power shortages that we have right here in the United States. But the plan is not without risks. Of course, if AI is something of a bubble, 10 years from now, SpaceX may be sitting on hundreds of billions of dollars worth of satellites in space for which there is limited use.
- [10:36]
Austin Hankowitz
Well, Robert, that brings us to our favorite question, which is what does a SpaceX IPO mean for you and your money? The people listening right now whose jaws are also on the floor as to the idea of data centers in space?
- [10:49]
Robert Kroke
I'm going to take a shot at this. If you invested alongside us in SpaceX at their 210 billion dollar valuation last year and they actually do IPO at this 1.5 trillion dollar mark, congrats on a 7x in 2 years. Or if you invested in the multi asset SPV that we had in the Rich Habits network that had SpaceX in it at a $440 billion valuation, congrats on that potential 4x as well. So these are great examples as to why you should be in the Rich Habits Network. And the link is in the show notes below. Because we have all these incredible opportunities and yes, these companies that are building the future, not only of AI, but everything related to technology for the future of the United States and the world.
- [11:34]
Austin Hankowitz
Yeah, if you're in the Rich Habits Network and you invested into SpaceX the first time we offered it back in September of 2024, or if you invested into the multiasset SPV we talked about here on the podcast for about a month or so, both of them at SpaceX, you probably are up 4, 5, 6, 7x, something like that, if they do IPO to one and a half trillion dollar valuation, but like actually talking about the company. So there's now this IDEA, right, that SpaceX will do 25 billion, 24 billion, something like that in annual revenue, in my opinion, I don't think a company doing 25 billion should be trading at 1.5 trillion. Right? That's a crazy valuation multiple. But as we think about Tesla stock and how it's been trading at crazy valuation multiples in the past, this isn't, I guess, that surprising. On the surface, this idea seems incomprehensible because one, I'm not a rocket scientist, but also two, we just talked about unemployment at four and a half percent and GDP coming down. And I'm sure, you know, rising inflation and all these people who, you know, holiday travel and having to pay their rent and working on Christmas to try and make ends meet, like real world problems. But we're putting data centers in space. That doesn't make any sense. But fundamentally speaking, if we somehow can create these, I would imagine there would be tons of demand for them, especially if they're more efficient because of cool, because of vacuums and zero gravity and all the efficiency that come with them being in space. I'm sure. Which means, yeah, SpaceX might have, you know, tens of billions of dollars more in revenue than anticipated because of this new business segment.
- [13:06]
Robert Kroke
And keep in mind, we're not sharing these crazy headlines with you because of a dystopian future we're afraid of. We share them with you so you can prepare. We are always here to provide as much value as possible and insight into all of the things that are happening in the next two, three, four, five years so you can get ahead of it not only in your career, but in your investing strategies.
- [13:27]
Austin Hankowitz
All right, Robert, let's now jump over to the biggest movers in shakers on ETF Central.com As a reminder, ETF Central.com is a website we like to browse to find new thematic ETFs and lots of ton of data and resources as it relates to ETF investing in general over on their website. So we got ETF Central.com's biggest movers and shakers of the last five trading days. I'll go through the top top three best performers. Robert will announce the top three worst performers and we kind of come back with a takeaway. So in third place as a top three performer this week is Life Sciences. ETF's second place is Space and Deep Sea. I'd imagine that Space has a lot to do with SpaceX's rumored IPO here. And the best performing thematic ETF this week is cryptocurrency, up 9.8%.
- [14:14]
Robert Kroke
So with our three worst performers, US utilities come in at number three, down three and a half percent, niche commodity coming in down four and a half percent. And cannabis and psychedelics down four and a half percent as well.
- [14:28]
Austin Hankowitz
So my big takeaway is pretty obvious, right? We're seeing Space and Deep Sea up as a category 7.7% on the week. Year to date is up 49 and a half percent. I would imagine a SpaceX IPO would be very good news for a AST space mobile or a Rocket Lab or one of these. You know, if you've got anything related to space in your portfolio right now, it's probably in the green to that point. Robert, Rocket Lab stock right now is up 9.8% as we filmed this today on Thursday, December 11th. And AST Space Mobile, which competes with Starlink, is up over 7% today. So that's no surprise. But it's pretty interesting to see and observe how space as a investment theme is more and more practical now as we see these companies actually delivering revenue and potential profits in the future.
- [15:16]
Robert Kroke
Well, we've been talking about these space stocks for a while now, and it's crazy because we're always telling people, you have to look forward, you got to get ahead of things. But there's going to be volatility. And there has been no shortage of volatility in a lot of these emerging secular growth trends. But we did call out a couple really good ones like asts Space Mobile. That's been doing really well.
- [15:35]
Austin Hankowitz
All right, Robert, time for us to wrap up the episode with our radar points. Every episode, Robert and I come with three of our favorite headlines that we found from throughout the week. Kind of like a little show and tell action. I come with some ideas, Robert comes with some ideas, and then we talk about them. So I'll kick off the radar points for me, Robert. My three points are one, Paramount now being the front runner to buy Warner brothers, not Netflix. Two, Dolly Parton's new convenience stores to compete with Buc EE's, and three, Warby Parker's partnership with Google and their AI glasses. So kicking this off with Paramount. According to Polymarket, Paramount now has higher odds of acquiring Warner Brothers than Netflix. This comes after David Ellison, who's the son of Larry Ellison, the CEO of Oracle, launched a hostile bid worth $108 billion to buy Warner Brothers. David Ellison sent a lengthy letter to Warner's shareholders trying to convince them that his $108 billion offer was better than Netflix's. We will see what happens with that. But whatever happens, I don't think it's going to happen by the end of the year. Now Dolly Parton is coming out with some new convenience stores, so you better watch out. Buc EE's in Berkshire Hathaway's pilot flying J. Dolly Parton, everyone's favorite musician is coming for your quick trip. Convenience stores. Announced Tuesday. Dolly Parton is partnering with the Tennessee and Travel Shop to launch rebranded entertainment Forward Travel center concepts across the state of Tennessee and eventually throughout the entire South. Described as a home away from home for truckers, families and road trippers rather than your basic fuel stop. Personally, I go to Dollywood every single fall to celebrate my anniversary with Ireland. I love all things Dolly Parton and though she's been kind of sick lately. So Dolly, we're praying for you. We love you and I will absolutely buy gas and other things at your convenience stores. And finally we have Warby Parker's partnership with Google. So Google announced on Monday at the Android show that the first lightweight AI glasses developed through their partnership with Warby Parker is expected to launch in 2026. Now these AI glasses are designed for screen free assistance which includes built in speakers, microphones and cameras to let their users chat naturally with Gemini, take photos and get help if they need it. They have display AI glasses which add an in lens display that privately shows users helpful information like turn by turn navigation or translation captions. I saw that demo. It is absolutely insane. Now Warby Parker's partnership with Google is a multi year deal to design and commercialize these AI powered smart glasses, making Warby Parker both a development partner and a strategic investor. Kind of like how Meta has their partnership with Ray Bans in Oakley. Google is partnered with Warby Parker and Warby Parker stock skyrocketed this week because of the unveiling. And it's, it's going to be interesting. You know, when we were talking with Gary Vee in New York City recently, he talked about how he believes, you know, these AI glasses are really going to be the future. So maybe, maybe I should buy some Warby Parker stock. Who knows?
- [18:41]
Robert Kroke
Well, we've talked about it for a long time, but I feel like your call outs today were just so fire and right in line with this episode. We're talking about VR glasses and dystopian futures. But then you threw in Dolly Parton, which I love. I'm a big Buc EE's fan when I'm doing the the road trips. So maybe it'll be fun to get some memorabilia from Dolly Land or Dolly World or whatever she's going to call it. So I'm going to go right into my three rapid fires today. Number one, Jamie Dimon just surrendered on live tv After a decade of calling bitcoin a fraud. Jamie Dimon, the CEO of JPMorgan Chase, went on live TV and he stated, we move trillions of dollars a day on blockchain. It's real, it's faster, it's cheaper. These were his exact words on Fox Business the other day. And this is the same man who wanted crypto shut down and is now at the center of building its backbone. So just a few facts about JP Morgan. They just launched a stablecoin on Base Network. They're tokenizing real world assets at scale. They're running on chain rails that settle trillions instantly and they're exploring Bitcoin and Ethereum as collateral, which is so crazy because on top of that, seven of the US's largest banks just announced they're going to be offering loan products against Bitcoin pretty soon here, allowing people to use their Bitcoin as collateral for loans. So this is huge news for the crypto space moving forward. My second point today is what does a Fed cut rate actually mean for real estate? I think a lot of people think that it's tied together and it really isn't. That while the Fed rate cut won't send mortgages crashing down, it's still welcoming news for the housing market because the central bank's decision will have more of a positive impact on the supply side since loans and lines of credit for developers more closely follow the federal funds rate. And cheaper money always means more activity. So lower short term rates are helpful for real estate investors, primarily helping short term financial needs like construction loans. Cheaper borrowing costs for developers can always encourage more home building. More housing inventory can help stabilize both rents and home prices, which is important for keeping housing inflation in check. And my third point today is all about Quantum, IonQ, Rigetti Computing and D Wave Quantum received an outperform rating from Mizuho Securities. Ionq, Rigetti and D Wave were in the spotlight on Thursday as investment firm Mizuho securities joined the party in the quantum computing industry. Ionq, Rigetti and D Wave were all given outperform ratings moving forward along with positive price targets. Those are my three points today. All very important. Not as fun as Austin's, but important for some of the sectors that are near and dear to where I think we can make a lot of money in the future.
- [21:35]
Austin Hankowitz
With that being said, back to that SpaceX IPO inside the rich Habits Network, we're working on another way to invest in SpaceX before their IPO somewhere around their current 800 billion dollar valuation. So if that's something you want to participate in, be sure to join the Rich Habits Network and invest alongside Robert and myself into what other cool companies we decide to put some money inside of. With that being said everybody, thanks so much for joining us on this week's episode of the Rich Habits Radar. Thank you. Be sure to check out all the links and resources in the show notes below and we'll see you next time.
- [22:31]
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- [22:53]
Robert Kroke
More.
- [22:54]
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