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This is an incredibly important week. There's so much going on this week , and Elon just set the bar high. I'm just shocked by what Elon said on Sunday. Let's break it down, how it completely changed the rules of the game, and what the Meta is doing based on it. This week we have a Fed meeting. The reinvest 1.com coupon expires this week.
We have Hood. We have SK Hynix and Face G Renew. We have Google. We have ServiceNow. We have Microsoft and the Fed meeting, and that's not all, because there are also elections in Israel, and next week, our elections. Oh my god, the next eight days are going to be crazy. So let's break it all down, and I recommend saving this video or the timestamps in it so you can follow this madness.
There will be a lot of content this week. Let's get started and try to put everything together. First, Elon Musk changed the rules of the game a bit, saying, "Hey guys, everyone else's debt might be bad, but don't worry, our debt is different." Our debts smell better. So you should invest in companies like SpaceX.
And maybe even Meta, because Meta just filed for a "shelf offering." Yes, we'll talk about what filing such an application actually means, but listen to this. Elon Musk, in response to good old Chamathi Palihapitiya, as a man with a portfolio of energy land assets, says this. Neo-clouds are disorganized and have weak capital.
Some of them are definitely better than others. Well, that's true. I mean, we've seen that Nebius, for example, has much better balance than CoreWeave, whose balance is just terrible. I don't have a stake in any of them, so I'm not trying to promote one neo-cloud over another. I don't care. Then Chamata says, "Hey, the organization between hyperscalers is much clearer, which makes it much easier to buy and sell chips to and from them." And there are delays in supply chains that hyperscalers can certainly accommodate, but some of those delays for neo-clouds can be much more random.
OK. To this, Elon Musk says: " Almost so." "Over the past few weeks, the debt markets have almost completely closed off access to any company that doesn't have significant revenues independent of AI data centers ." So this is essentially Elon Musk rethinking what's going on with the credit default swaps that have flooded X.
I don't really think Elon is opening up a Bloomberg terminal or some other terminal trying to figure out what's going on with bonds. I think he sees a bunch of trending topics about how terrible Coreweave's debt is and what's happening with those CDSs, and he's like, "It looks like the debt market has closed off access for any of these companies that don't have another source of revenue." "But he's probably right, because a company like Coreweave, which is $8 billion short, is completely dependent on further fundraising." The problem is not the money they raised, and we talked about that in my video about the doom loop.
In fact, I created Substack. I made my first ever post on Substack on Saturday morning. And it was literally called "The AI Doomsday Loop, " and I was talking about Coreweave's debt, how they're paying 7.5 to 10% on their debt, but it's not the 7.5-10% that's important , it's the fact that they don't have the money to pay their bills unless they raise even more money.
And the new money they have to raise has to compete with 15%, because if someone wanted to lend Coreweave money, they could literally just buy an old bond on the secondary market that had fallen in price by 20- plus percent and get a 15% yield. Why buy new debt if it's not somehow more attractive? So, that's why Elon says this, okay?
And then Elon justifies it with the phrase "unless, of course, they have significant revenues from something else," you know, we have this cool thing called Starlink, and we make a lot of money sending things into space, you know, flying to the moon. And honestly, I mean, it's a good pitch. He's right, and that's what Amazon, Microsoft, Google are actually doing.
I mean, Google in particular has brought in Greg Able and Berkshire Hathaway, you know, Barron's thinks Meta is about to bring in Berkshire Hathaway through convertible bonds. But all of them are in a much better position than the new neo-cloud service, which is trying to develop on its own, well, that is, to be financed.
In other words, it's like, "Hey, let's create a startup." Okay, we'll develop it until we need funding, which is essentially day two of our operation. Where are we going to get all this money? And that's why funding has somehow become very easy for neo- cloud services at the start. Some of this looks like a vicious cycle with guaranteed rent from large hyperscalers or even directly from Nvidia, allowing them to take on some of this debt.
I'm not sure it's really over yet. It seems to me that what we are seeing in the CDS market, that is, credit default swaps, is what I call a " death loop." You know, stocks are falling , bonds are falling, so yields look higher, then people buy more credit default swaps, and it makes it seem like they're in a death spiral where prices are constantly rising.
So, more traders appear to buy CDS, which forces them to rise even higher , which means stocks have to go lower and bonds have to go even lower. This crazy death loop of sorts. Although Elon, he is not wrong when he says this. Everyone knows that Neo Cloud is, in essence, just a data center and nothing more.
There's no advertising revenue, no co-pilot subscription, no Amazon AWS or consumer business keeping the company afloat. Only chips. Therefore, Elon claims that this means that over 200 Neo Cloud companies are facing collapse and consolidation at the level of small players. Some will survive , but not many.
Now I'm a little hesitant about this being almost a duality, or rather a triplet, of what Elon is saying, because some of it seems a little self-serving. First of all, it is self-serving for Elon Musk. Does Elon think they're going to go bankrupt because he studied finance, or because, first of all, if you stab them while they're bleeding and stick the knife in deeper, it'll allow someone like Elon to pick up the pieces.
I mean, think about it. Microsoft, Amazon, Meta, any of these big hyperscalers would happily take another 100,000 GPUs for next to nothing because someone went bankrupt? A bit selfish, isn't it? Yes, and that makes sense. This is one of the reasons why I don't openly invest in Neo Cloud, but to be fair, I do have stakes in SpaceX, Meta, and others.
In some of these huge companies. Because this is something similar to what happens in healthcare. It's the small players who kill each other. They are literally gnawing at each other's throats, trying to be the first to bring the best drugs to market. And as soon as someone brings a good drug to market that looks like it will be approved, I'll be bought right away by someone big like Eli Lilly.
They're called the S&P 500 of healthcare because they're constantly buying up companies. But in any case, I'm not sure if Elon is following this in X or if he sees something else behind the scenes. I also think it's somewhat to his advantage to stick that knife in deeper. And third, it's a great opportunity to advertise SpaceX's ability to raise funds, which is, frankly, great advertising for the Nasdaq 100.
You see, Meta just announced a deferred listing, which essentially means, " Hey, we're going to sell shares from time to time." I was getting ready to record this video, and suddenly I saw the Meta candles falling, falling, falling all the way to $610. And then, 4 minutes later, the news appeared on WeBull, but I had already seen it in the headlines of the news feeds.
But, whatever it was, the stock recovered, which is actually interesting, and is now in the black. It was minus 4.5%, and now it's plus 2%. In my opinion, Elon is selling data center debt and saying, " Guys, forget about all the small stuff." This boom can continue, baby. Just keep buying the debt of SpaceX and Meta or any business that has other revenue to pay for it.
Then everything will be fine, and the boom will, in fact, continue. Now the main thing I didn't read about here is that he said something very optimistic. SpaceX raised $40 billion in debt on GPUs, but we have an investment grade rating. But this is exactly the killer phrase. He's essentially saying, "Hey, we had no problem raising money ." This boom continues.
Yes, some of the smaller players are having problems, but the boom continues, and we have filled our $40 billion fund. Yes, this is the "sucking" . We don't call it the big suck for nothing, because they all need to suck. And no one does it better than Zuck, Elon, and some other big companies. So, yes.
This is Elon's move—to finish them off a little while they're down, while simultaneously promoting his own company and telling us that there's still a lot of damn money fueling this chip boom. This chip boom is far from over. I don't know how to simplify it any further. The market, yes, is nervous about Iran, catalysts, and all that nonsense.
That's fair. But this boom is far from over. It is just beginning. And we'll talk more about that in another video . But really, the fact that Meta is growing after filing for an IPO, which allows them to start selling shares randomly or, you know, from time to time, as it's usually phrased, whenever they feel like it, is a good sign.
This is a great sign. I mean, if Meta holds up, it's a signal that people have already priced in the " big decline." By the way, I wrote about this on Twitter a few hours before Elon's tweet. And what I wrote about was specifically about this. Ovva. You see, 21 hours ago. Wow, Meta is voicing what everyone is silent about .
Everyone is raising funds. So let's try to stay ahead of events, because it will become more difficult to raise money . Great decline. You follow me on real meet kevin, but these are the insights I sit and read these financial documents over. And these are the insights we talk about at Reinvest One.
If you are not with us yet, join us. I'll read it to you in a moment. But remember, if you join before the coupon expires, you'll get the best price, lifetime access, Alpha membership, all trading alerts, , the Real Estate terminal coming later, er, the Reinvest consumer agent AI roadmap, and it's going to be something grand.
Agent AI for business. Yes, a huge, huge topic. This will be very interesting. This is going to be a great, great module. But in any case, let 's focus on this moment. And then we'll move on to Iran and some of the other catalysts this week. Because what do we have here? The special committee considered whether debt financing could be an alternative form of financing for Meta.
But he acknowledged that debt financing of this scale would negatively impact the company's credit ratings and would be less desirable. Hmm, interesting. So, essentially, they're saying, "Hey, let's just sell the stock." And that is exactly what is meant here . We don't want to increase debt, we just want to sell shares.
Oh, wow, how convenient. That's why we now have this dual share class. And they want to do it between now and the end of the year, they literally said by the end of 2026. Between now and the end of the year, they want to start selling shares, so they are issuing their offering or applying for it. This is not a surprise.
This is completely consistent with what they said and what we published 21 hours ago. And we talked about this today during the earnings call. So there is no surprise here. Stocks are going up, this is a "bullish" trend. A large company raises funds. OK. So, now the catalysts. Look, I'll go through them quickly.
So fasten your seatbelts, okay? Tuesday morning, SoFi, UPS. OK. You know what's going on in finance. It was a little difficult, partly because the rates were so high, and SoFi, you know, has been very active in mortgages lately. Like, "Oh man, this is going to suck for a while." But I think they will skyrocket once the rates come down.
You know, that's why I'm secretly—well, it's not that much of a secret, but between us—my little real estate startup is expecting, we've been told by the Department of Real Estate that we'll be approved as a mortgage lender in November. We do n't really want to do anything about it now. But it's really interesting because if rates fall in the future, it's going to create some really cool opportunities for brokerage.
But, in any case, this is a topic for the future. Uh, UPS, let's see how the pension fund's liabilities are. On Tuesday morning, we will get the weekly employment report from ADP. Tuesday afternoon we'll get uh Hood, SK Hynix—that's huge, Visa, Enphase. Enphase, maybe we'll get a date for their 800 volt converter, otherwise there's really nothing interesting there.
Uh, SK Hynix, though, that's huge. We need to know what is happening with the loss of leadership in high- bandwidth memory. Any comments we can get on this would be huge. And then, of course, later on Tuesday we'll find out if Bibi is expected to win. If he doesn't win, some people actually think the likelihood of war against Iran will decrease.
Who knows, maybe this is what Donald Trump is waiting for— taco. Tuesday would be a great day for tacos . Tuesday would be the perfect day for tacos because it would be Taco Tuesday. I'm 95% sure that if we get a taco, it should happen before the Israeli elections are over. That would be sometime on Tuesday, maybe even Monday.
We'll see. If this does not happen, then my confidence that we will conclude an agreement before the elections will drop to 70 %. I think the window of opportunity is starting to close. And I'll tell you what happens after the election, a little later . And on Wednesday we have Vertiv and GE Vernova reports, that will be a huge event for the turbine market.
What does the order book look like there ? Generac is n't doing so well, but it's another source of potential growth for data centers. ADP, the company's financial performance interests few people. We have a Fed meeting on Wednesday. We all expect rates to remain unchanged. Let's take a look. October meeting.
I also want to see how rates affect the likelihood of one increase this year. Here you see a 95% probability that the Fed will hold the rate on Kelshi. This is a prediction market. And then a raise in 2026. I always like this schedule. This is my favorite. We have a 24% chance of one raise. I don't know, man.
I think if there is a taco, I still believe it will double or you will hear very good comments from Varsh. I think you can make money from this, but I could be wrong. We might not get the tacos and then get a few painful blows, which I really would n't want. Continuing with catalysts, I'll quickly point out that Kelshi is a paid sponsor of my startup Reinvest.
When you go to kelshi.com/r/meetkevin and make your first trade, you get $25. You can use the meet Kevin code or scan this QR code. Therefore. The Fed meeting is of less importance now, as the December decision will depend on the next unemployment, labor and two CPI reports. This is what will determine the Fed's actions.
So these are catalysts for the future. This Fed meeting should be relatively nothing. Everything will depend on Iran, because then you can simply ignore everything else. So, as if we didn't have enough Fed Day, after that we move on to Microsoft, Google, ServiceNow, Fortinet , Chipotle, FedEx, and of course, if Microsoft and Google come out and say, " Hey, guys and girls, you know, SpaceX and Meta, we want to raise some money too." Yes, to irritate the markets a bit again.
But that's okay. You should expect this because they will continue to raise capital . And Amazon will tell us the same thing on Thursday. And then we'll at least get data from SanDisk, so we'll see a little bit of detail about what's happening in the storage space. Reddit, Roblox, Coin, MicroStrategy, Starbucks, Penn—some of them are less important, but then we get the PCE index.
The core PCE index is expected to be 0.03 at the end of this week. I really don't think it's going to be a big catalyst because we can already calculate what PCE will be based on PPI and CPI, so who cares? This is where we get to, you know, the likelihood that the " taco" will fall apart after the election.
I think between, you know, now and Tuesday night, 95%—that would be a great window for a deal. If we miss Tuesday, if we miss this Taco Tuesday, we have time until the next Taco Tuesday, but my enthusiasm drops to 70%. And if we skip the elections, I think the motivation for both sides to make a deal will disappear to zero.
I think the biggest motivation to make a deal is right before the election, when the Iranians can claim that they have given Trump minimal reason to brag, but Trump can still declare victory before the election. We'll see. Now the Iranians, interestingly, are taking a position where it doesn't look like there's any real escalation happening right now.
Iran is holding a meeting in its capital, Mecca, regarding a kind of security agreement between officials from Turkey, Pakistan, and Saudi Arabia; others are expected to join in as well. Al Jazeera is hinting that this is a pretty serious event, and it comes right after Donald Trump says: "There will be no strikes.
Maybe tomorrow. But there will be no strikes ." In any case, now Al Jazeera is also publishing " before" and "after" images of a tanker leaking oil everywhere in the Strait of Hormuz. This...this is a mess. But then on Tuesday, the president of Iran is also going to Moscow. So, there's a lot going on around this meeting in Iran and the visit of the Iranian president to Moscow.
They are looking for answers: " Hey, if we agree to this agreement, will you stand up for us if the Americans violate us?" To me, this doesn't look like the start of a war. And I know there are some similarities, you know, you can compare the risks of war in February and now. The Strait of Hormuz was open then, but now its operation has been disrupted.
Although we are looking for alternatives. Now we have a blockade, but then there was actually none. Now we have an economic blockade, but then there was none at all . Now it's all a kind of new invention. The risk premium on oil was about six dollars. It is now closer to $60, which is pushing oil to trade above $100.
Saudis versus Houthis—that wasn't a problem in February. Now it is so. Iranian oil sales—well, they were going up before the war, and now they're almost at zero. Iran's currency was collapsing then, it is collapsing still, and it is only getting worse. The labor market in Iran, you know, went from not being a problem to having high unemployment.
They currently have negative GDP of between 7% and 12%, depending on how you measure it. So, you know, there's definitely an additional burden on the Iranian economy, but you could argue that some of that exists in the U.S. economy as well, but hey, if Elon and Zuck can work and the economy keeps growing, or, you know, GDP growth keeps going and the stock market keeps going up, then Donald Trump won't feel much pressure.
You know, he had more pressure to make a deal because of the pain we saw over the 6 weeks in March and early April. We now have workarounds for Hormuz. It seems we are talking about the duration of the future Iranian nuclear deal, the enrichment process, in other words, what level of enriched uranium are we willing to accept?
This indicates that we are seeing more supply problems. This is a chart that essentially says, "Hey, how much of the price of oil is due to supply issues?" And the answer is— more and more over the past few months. In fact, each bar on the chart here is approximately equal to 1 week. So , for the last, probably, 5 weeks.
More supply problems. It was probably then that the " tanker for tanker" strategy began. It seems to match. And then demand dropped a little bit , which helped offset that, but people believe that demand will come back from China. Who knows how it will be. Here is the American blockade when it came into effect again.
So , it is clear that oil exports from Iran are almost zero compared to what they were before. Yes, maybe 10% of what was there, if that much at all. And, of course, Iran's currency is collapsing. This is an inverted graph, because it actually shows how many dollars it takes, or , excuse me, how many rials it takes to buy 1 dollar.
And the answer is more. Somewhere between 2.5 and 2.6 million rials now, compared to 500,000 two years ago. So, you know , your money has lost its purchasing power fivefold. Quite scary. So, you know, put it all together . This is a lot. And I just want to be frank. Hold on. There will be a lot of content on this topic, except for this morning .
Er, I apologize for that . My little twins have a birthday this morning . And, uh, we won't be going live this morning, but remember, you can always go to reinvestone.com and join our membership. You pay once and get lifetime access. I look forward to meeting you. See you later. And may you be lucky this week. was great to hear your opinion. Like
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