• Stocks: The tech selloff took a breather today, helping the Nasdaq break a five-day losing streak. The Dow closed above 52,000 for the first time ever.
• Commodities: US oil climbed back above $70 per barrel again after the US and Iran exchanged attacks over the weekend. But gains were muted thanks to reports that negotiations over a peace agreement will resume tomorrow.
• Crypto: Strategy revamped its…strategy of holding bitcoin ad infinitum, and now reserves the right to sell up to $1.25 billion of the cryptocurrency to boost its cash reserves.

Spin-offs

Adobe Stock

Like many breakups, Comcast’s split came down to a bad fit.

Today, Comcast announced it’s spinning off its media business to create two distinct public companies. On the one hand there’s NBCUniversal, a media conglomerate that will include Universal Studios, NBC, Telemundo, Peacock, Bravo, Universal’s theme parks, and the company’s European media business, Sky. On the other hand, the newly separate Comcast will focus exclusively on broadband and wireless services, as well as its original cable business.

Comcast soared after the announcement, hitting its highest point since 2008 this morning, before giving back some gains and ending the day up 4.53%. It’s a welcome relief for Comcast shareholders, who have watched the stock sag 30% over the past year as it struggled with the unprofitability of Peacock and losses in its broadband business.

This isn’t the first time Comcast has put itself on the chopping block: Only a few months ago, the company spun out its cable TV networks MS NOW (formerly MSNBC) and CNBC into an independent company called Versant Media Group.

The end of an era

Once upon a time (about 15 years ago), it seemed like a good idea to merge connectivity providers and entertainment services. After all, in an age of limitless convenience, having a one-stop shop for internet services and entertainment makes intuitive sense. That was the logic that drove Comcast to buy NBCUniversal from General Electric in 2011, while other companies like Time Warner tried to do something similar.

But that strategy has proven flawed. It turns out that media is a tough business, and investors have pointed out that the instability of modern streaming is dragging down Comcast’s valuation as a standalone company.

“So where previously we believed that the scale and diversification benefits warranted operating these businesses as one company, we now have simply changed our mind about that,” co-CEO Mike Cavanagh told investors, according to the Wall Street Journal.

Just when we think we’ve seen all the ways that media companies can merge, unmerge, and reorganize, they keep coming up with new configurations. Perhaps it’s an exercise in keeping audiences entertained.—LB

      

From The Crew

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Whether you’re scaling, fundraising, or just figuring out what comes next, this is the newsletter for you. Subscribe today.

Stocks

🟢 What’s up

• Alphabet climbed 4.96% on its first day of trading on the Dow.
• AppLovin jumped 4.54% after Raymond James initiated coverage of the advertising platform with a Buy rating.
• Charter Communications rose 9.38% following a Bloomberg report late last week that the company was in talks with SpaceX to create a consumer phone product.
• Applied Materials soared 10.82% after two banks—Cantor Fitzgerald and KeyBanc Capital Markets—raisied their price targets.
• Ouster popped 28.68% thanks to a deal to provide lidar to AIM Intelligent Machines.

🔴 What’s down

• Super Micro lost 8.1% after its Taiwan office was raided by government agents investigating its alleged semiconductor smuggling operation.
• Building materials company TopBuild sank 15.45% as investors anticipate its acquisition by QXO.
• Verizon Communications fell 5.24% after the company said it expects second quarter losses between $700 million and $800 million following a deal with the UK’s BT Group to create a joint international business.
• Martin Marietta Materials dropped 5.65% after the natural resource materials company announced it was merging with Lhoist North America.

Warning of the day

Tech troubles

Adobe Stock

Last week, Apple announced it was raising the price of MacBooks and iPads while Microsoft revealed it’s increasing the price of Xbox consoles. The reason for both moves was the same: The soaring cost of memory chips was taking too much of a toll on each company’s bottom line. Tech stocks sold off across the market as investors worried that a memory shortage could no longer be contained.

Let’s be clear: Apple and Microsoft will be just fine. They have millions of customers, and while not all of them will be able to absorb higher costs, enough people can stomach them that these companies will maintain their positions at the top of the tech heap. It’s the little guys and middlemen you should be worried about.

Companies like GoPro and Sonos have openly stated that the rising price of memory chips is gouging their bottom lines—so much so that GoPro may soon go bankrupt. Electronics retailers like Best Buy will now have to convince American shoppers to shell out more for their next laptop at the exact moment that consumer sentiment is hovering near all-time lows.

The memory chip shortage has helped companies like Micron boom, but it may end up making a few smaller tech companies go bust.—MR

Tech

Morning Brew Inc.

You know the old saying: If you can’t beat ’em, build a miniature version of ’em.

That seems to be the idea behind Rocket Lab’s acquisition of satellite services company Iridium Communications. Iridium’s satellite network provides Rocket Lab with a larger low-Earth orbit network of satellites that will allow the newly combined company to offer a broader range of communication services—and make it more competitive with SpaceX.

“By marrying Iridium’s deep heritage, trusted infrastructure, and highly sought-after spectrum with Rocket Lab’s extensive and proven launch and manufacturing capabilities, we have the capability to unlock entirely new markets,” Rocket Lab founder and CEO Sir Peter Beck said in a press release.

Rocket Lab leapt 15.86% today, while Iridium soared 25.44%.

It’s not rocket science

Rocket Lab already has the rockets it needs to launch its own satellites into space, while Iridium will expand the company’s satellite constellation and provide some much-needed wireless spectrum assets. The latter is a finite resource that spacefaring companies are in a battle to control as the market for direct-to-device communications (connecting satellites directly to smartphones and other equipment) continues to grow.

After this deal, Rocket Lab’s business model will more closely resemble SpaceX’s: a vertically integrated company that can build you a satellite and hurl it into space, too. The difference is that SpaceX is a $2 trillion elephant in the room, while Rocket Lab’s market cap remains a measly $60 billion. And SpaceX has a mighty headstart: Its Starlink business arm has about 10,000 satellites in space, while Rocket Lab has launched over 250, and Iridium will provide it with another 66 after this deal.

Still, Rocket Lab’s appeal to investors may be that it’s a smaller, cheaper bet on the space race than its overvalued competitor. The problem is, SpaceX’s public debut means the bigger company is snagging investors’ attention—and soon, it could automatically enter their portfolios.

Speaking of SpaceX

SpaceX began trading on the Russell 1000 and the MSCI’s US indexes today, and Nasdaq announced on Friday that the stock will be fast-tracked for inclusion in the Nasdaq 100 early next month. That means any broad-market funds connected to the Russell, MSCI, or Nasdaq 100—like an index fund or ETF—will automatically buy shares of the stock, pushing billions of dollars in SpaceX’s direction and potentially fueling future gains.

Rocket Lab is making all the right moves to compete with SpaceX, but Elon Musk’s company is dominating headlines and vacuuming up investors’ money—leaving competitors like Rocket Lab scrambling to catch up.—MR

      

News

• The Supreme Court ruled that President Trump cannot fire Fed Governor Lisa Cook.
• Goldman Sachs is still bullish on gold, arguing that it could reach $4,900.
• AI can’t do everything: Ford has rehired engineers it replaced with AI.
• SK Hynix and Samsung Electronics are investing over $500 billion in new chip plants in South Korea.
• This is sure to end well: Private credit is making big bets on buy now pay later companies.
• Here’s how Silicon Valley is milking an IRS loophole by investing in small businesses.

Calendar

Earnings announcements: Nike and Constellation Brands continue a quiet week of earnings. Nike in particular will be under the microscope after shares fell to their lowest level in over 11 years this week.

Economic reports: A week of labor market data kicks off with the May JOLTS report. We’ll also get some real estate info from the April FHFA House Price Index, as well as the April S&P Case-Shiller Home Price Index.

recs

💰 Trump accounts arrive on July 4. Here’s a hack that can help you maximize your child’s savings.

📞 A conman ripped off his investors to the tune of $50 million, and recorded the conversations. Listen to them here.

🌐 European stocks are set to outperform their US competition this year, according to JPMorgan. Here’s how the bank’s head of global and European strategy says you should play it.

📊 This extremely handy report breaks down the entire US economy in 30 charts.

🛢️ Here’s a terrifying stat: We’ve got about 58 more years before the world runs out of oil. Check out the timeline for other key commodities, and prepare your portfolio accordingly.