Andrew here. The upcoming U.F.C. bout on the White House lawn isn’t the only combat spectacle in Washington. At a Senate committee hearing on Wednesday, Treasury Secretary Scott Bessent was asked about reports that he had threatened Bill Pulte, the federal housing chief who was just named acting director of national intelligence, and who has drawn backlash for helping instigate criminal prosecutions of Trump political targets like the Fed governor Lisa Cook.
“Did you actually tell Pulte you were going to punch him in the face?” Senator Thom Tillis, Republican of North Carolina, asked. “No sir,” Bessent replied. “I actually said I was going to kick his ass.” (Tillis said he shared “the emotion” and vowed to block Pulte’s intelligence appointment.) Presented without comment.
Take it or leave it
It’s official: Elon Musk wants to set an astronomical record with SpaceX’s I.P.O.
A revised prospectus from SpaceX shows that Musk is exceptionally confident about demand for its market debut, slated for next week. But the company is increasingly staking its future not on its moneymaking rockets and satellite internet businesses, but on its artificial intelligence division that isn’t an industry leader.
How confident is SpaceX? Most companies propose a price range for their offerings, then home in on a specific price after talking with investors.
Not SpaceX. It just set its offer price at $135 a share.
Here’s what that means:
-
SpaceX would raise at least $74.4 billion in net proceeds, a record. That amount could rise to $85.7 billion if underwriters exercise what’s known as a greenshoe option if there’s greater-than-expanded demand.
-
The company would have a market value of $1.77 trillion, making it one of the 10 largest U.S. publicly traded companies.
There are reasons to think SpaceX’s I.P.O. will shoot the lights out.
-
Investors have waited for it for a long time, and they’ll probably have to pay up to buy shares, since SpaceX will have a small float of publicly traded stock.
-
Its team of underwriters is primed to promote the stock. (Jamie Dimon of JPMorgan Chase will personally help pitch it to ultrawealthy clients, according to Bloomberg.)
-
SpaceX is set for fast-track inclusion in many broad-based indexes, meaning that giant stock funds will be obligated to buy its shares.
But there’s reason for some skepticism. In its prospectus, SpaceX talked up a $28.5 trillion potential addressable market, a vast majority of which is in A.I. Yet the company’s xAI division is considered far behind Anthropic and OpenAI, and Musk’s goals like building data centers in space are expensive and potentially constrained by physics.
Yet SpaceX will suck up a lot of investor attention and dollars. That has widespread consequences, including further depressing the price of Bitcoin and raising the stakes for Anthropic and OpenAI, the next A.I. giants set to go public.
HERE’S WHAT’S HAPPENING
Oil prices dip after a cease-fire in Lebanon is announced. Brent crude, the international benchmark for oil, fell near $96 a barrel on Thursday on the agreement, which requires the cooperation of Hezbollah, the Iran-backed armed group. War in the Middle East has sapped U.S. crude stockpiles, prompting new inflation worries and growing political backlash, with the House passing a rebuke of President Trump’s handling of the fighting.
Private equity concerns batter investment giants. Shares in Blackstone, Blue Owl, Carlyle and other private equity giants sold off sharply on Wednesday after Partners Group moved to limit withdrawals from one of its flagship funds. Investors have been growing worried about valuations of private market holdings.
New York State opens an antitrust inquiry into Compass, the real estate giant. The office of Letitia James, the attorney general, is investigating the brokerage after it acquired Anywhere Real Estate, which owns Century 21 and Coldwell Banker. The Justice Department declined to pursue an extended examination of the deal this year despite concerns among some enforcement officials.
Jeffrey Kessler’s Paramount debut
Wall Street is still buzzing over the decision by Jeffrey Kessler, one of the country’s top litigators, to help Paramount as it races to seal its acquisition of Warner Bros. Discovery, and as potential legal challenges mount.
Kessler, an executive chairman of Winston Taylor, is fresh off helping 33 states and Washington, D.C., in their antitrust lawsuit that found that the ticketing giant Live Nation had acted as a monopoly. One of those states, California, is threatening to sue to block the Warner Bros. Discovery deal.
Now Kessler is revealing some of the game plan if the states were to sue, in Paramount’s response to a lawsuit by current and prospective Paramount+ subscribers seeking to block the acquisition, Lauren Hirsch reports.
The deal is good for the industry, Paramount argues in new legal filings. In one of them, Kessler calls the latest suit an attempt to “politicize antitrust law.” And, he argues, the deal would bolster competition against streaming giants like Netflix, Amazon and Disney.
The filings include two sworn declarations from Paramount executives, the first time that Paramount executives have promoted the deal’s potential benefits under oath.
-
Dana Goldberg, a chair of Paramount Pictures, reiterated Paramount’s promise of bringing at least 30 films per year to theaters, and says there are no plans to reduce the number of television series the combined company would produce.
-
Andy Gordon, Paramount’s C.O.O. and chief strategy officer, said that while Paramount expected to enjoy cost savings from the deal, it plans to get most of them “from nonlabor sources.”
Why did Kessler join the case? “I have a lot of respect for the states, but my whole career as an antitrust lawyer is taking on the biggest, most interesting cases that I believe in — and this is one where Paramount came to me,” Kessler told DealBook.
He added: “I took a look at it, and I looked at what the facts were, and I said, ‘Yeah, this is not an antitrust violation.’”
He doesn’t see a conflict of interest. “When I took on the Live Nation representation, the states knew” that Winston Taylor defended “a lot of clients, including in state investigations,” Kessler said.
In some of those cases, he said, “we are adverse to some of the states.”
What’s riding on the California election runoffs
With many of the votes from California’s primary elections counted, it appears the state is headed toward a handful of high-profile runoffs in November.
The governor’s race features ideological opposites. Steve Hilton, a Republican and former Fox News host, is leading in the primary, followed by Xavier Becerra, a Democratic former representative and a health secretary under President Joe Biden. The billionaire climate activist Tom Steyer is in third place.
It’s unclear whether Hilton will maintain that lead or make the runoff, as California counts mail-in ballots — which are likely to lean Democratic — over the coming weeks. Becerra leads in bets on prediction markets.
Mayor Matt Mahan of San Jose conceded after a dismal showing, in what was a bad day for tech-friendly candidates.
What’s at stake? The next governor of the state, which has a $4.25 trillion economy, will shepherd policy on issues with significant national implications:
Artificial intelligence. Last year, California became the first state to pass a law regulating the frontier A.I. labs, requiring them to disclose safety test results. Members of the State Legislature have proposed an array of bills targeting the sector.
The California billionaire tax will probably be on the ballot in November, too. In a new poll, a majority of likely voters said they approved of the proposed tax, which would place a one-time 5 percent levy on Californians with a net worth north of $1 billion. The initiative has ignited an outcry from the state’s wealthiest individuals and caused some to leave California. If it’s approved, the next governor will oversee its enforcement.
-
Becerra, like Gov. Gavin Newsom, opposes the measure, and instead calls for extending existing taxes on high-income earners.
-
Hilton strongly opposes the billionaire tax. He has proposed eliminating income taxes on the first $100,000 that Californians earn and wants a flat tax.
-
Steyer supports the billionaire tax, though added that he doesn’t want the wealthy to flee the state.
In the Los Angeles mayoral race, the incumbent, Karen Bass, will face a runoff against either Nithya Raman, a progressive City Council member, or Spencer Pratt, a Republican and a veteran of reality TV who received a surge of donations from prominent business executives.
While Pratt is currently running in second place, it’s unclear whether he’ll make the runoff once all mail-in ballots are counted.
Number of the day: 210% debt to G.D.P.
That ratio would be roughly when the U.S. federal debt load becomes unsustainable — a kind of fiscal breaking point — according to a new study by the Penn Wharton Budget Model shared exclusively with DealBook. At the end of March, U.S. debt held by the public surpassed 100 percent of gross domestic product.
The dreaded 210 percent limit has a 25 percent probability of occurring in the next 14 years, according to the model. At that point, America would be unable to finance the interest payments on its debt, and no amount of future taxes could prevent a default.
$100 million to promote capitalism
The U.S. Chamber of Commerce just landed a windfall that will help fund its pro-business agenda: One individual is giving $100 million, the largest single donation in the organization’s 114-year history, DealBook is first to report.
The donation arrives as the organization, which has been critical of President Trump’s tariffs, is rallying to challenge what it views as growing skepticism about free market capitalism on both sides of the political spectrum.
The chamber landed the pledge after just “one conversation,” Suzanne Clark, its president and C.E.O., told DealBook. She said that the donor, a “longtime member” of the chamber who wishes to remain anonymous, included a condition that the gift should not be used for “election-related activity.”
Where will the money go? The chamber, a top K Street spender, had already been fund-raising with a goal of $100 million for its “New Fight for Free Enterprise” initiative as it works to counter what it calls “anti-business” policies, especially “regulatory overreach and anti-growth” measures.
Last year, the chamber entered the tariff fight. It filed legal briefs in support of lawsuits challenging some of Trump’s most bruising levies, which the Supreme Court struck down in February.
-
On Tuesday, the Trump administration proposed new tariffs on trading partners. Clark said that the chamber’s legal position on those hadn’t been determined. “The team is studying it,” she said.
The chamber’s campaign seeks to promote a positive narrative around capitalism. The recent election of democratic socialists as mayors in New York and Seattle, as well as a billionaire tax initiative in California, are signs that some voters are in an anti-business mood.
Clark said the group’s members are worried about politicians on the extremes of both parties making business the bad guy. “In our belief system, business generates the good and solves problems,” Clark said.
THE SPEED READ
Deals
-
Benchmark, the prominent venture capital firm, is said to have raised $2 billion for its latest funds, including its first vehicle for older start-ups. (WSJ)
-
Bill Ackman’s Pershing Square has sold off its stake in Universal Music Group after the giant music label rejected its takeover offer. (Bloomberg)
Politics, policy and regulation
Best of the rest
We’d like your feedback! Please email thoughts and suggestions to [email protected].
