CNBC Daily Open: The Musk Universe Is Planning Its Latest Crossover
Hello, this is Hui Jie writing to you from Singapore. Welcome to another edition of CNBC’s Daily Open.
For the fans of Marvel universe, crossovers between films are common, such as portrayed by Marvel’s 2018 blockbuster tagline: “Infinity War is the most ambitious crossover event in history.”
However, in the corporate world, Elon Musk is mulling a more ambitious merger of universes: SpaceX and Tesla.
What you need to know today
Similar to a crossover bringing Marvel characters from separate stories onto the same screen, Elon Musk has revealed that SpaceX and Tesla, two very different companies are discussing a merger, a move that will see electric cars, rockets, satellites, and artificial intelligence ambitions all rolled into the same entity.
At SpaceX’s third quarter earnings call, Musk said a merger with his automaker, would be a “good idea,” adding that the boards of both companies have formed special committees to discuss a tie-up.
While Musk will not be part of the discussions has he is a “conflicted party,” he said that there was a lot of merit in combining the companies, pointing out potential cooperation across software, chips and more.
SpaceX had beat earnings expectations for its third quarter, posting operating income of $2.8 billion and net income of $4.4 billion.
Revenue came in at $14.58 billion, compared to the $12.72 billion expected, and earnings per share stood at 45 cents adjusted, sharply beating forecasts of 13 cents.
CFO Bret Johnsen said on the call that revenue in the first quarter of 2027 will be $33 billion to $37 billion, trouncing the average $22.2 billion average analyst estimate, according to LSEG.
Musk and Starlink
But just like in any Marvel movie, the main character can sometimes also be the villain.
Musk reportedly ordered a slowdown of the military-grade Starlink serviceused by Ukraine, limiting the speeds at which connected hardware could travel and rendering some offensive and interceptor drones largely ineffective.
The Wall Street Journal reported Musk and Trump had discussed the decision in a call soon after the slowdown became public.
Musk previously said that restrictions on the system were ultimately decided by the U.S. military and the president. Trump, however, told reporters Monday that he did not know who was responsible.
Netflix results
Elsewhere, investors turned off the TV on Netflix, selling off shares in extended trading despite the company beating third-quarter earnings expectations.
Netflix reported earnings of $3.66 billion, or 87 cents per share against the 82 cents analysts expected. Revenue rose 12% to $12.87 billion, matching forecasts.
But its shares fell as the company lowered its advertising outlook and issued fourth-quarter revenue guidance below Wall Street’s expectations.
Netflix forecast $13.44 billion in revenue for the current quarter, compared with the $13.52 billion expected by analysts.
Trump trade woes
Months after successfully getting U.S. President Donald Trump’s ‘reciprocal’ tariffs struck down by the Supreme Court, legal group Liberty Justice Center is now back in court against the president.
This time, the group is representing the New Jersey-based food importer Gellert Global Group to challenge Trump’s invocation of a Depression-era law to impose 50% tariffs on a range of Canadian goods.
The complaint asks the court to declare the tariffs unlawful, block their enforcement, and order the Trump administration to issue refunds for duties already paid, with interest.
Gellert CEO Sara Albrecht said in a statement Tuesday morning, “No president should have the power to pull a dormant statute off the shelf and use it to impose sweeping tariffs or import bans without the limits Congress required.”
And finally...
Boeing wins FAA approval for 737 Max 10 after years of delays
The Federal Aviation Administration on Tuesday signed off on the Boeing 737 Max 10 after years of delays, a major win for the manufacturer and the last in its best-selling family of jets to get government approval.
The green light comes weeks after federal officials reviewed a navigation system glitch on the aircraft but deemed it was not a safety-of-flight issue.
The 737 Max 10, the largest model in the family that can seat up to 230 people, was set to start flying in 2020, but increased scrutiny following two Max crashes in 2018 and 2019 and other safety issues delayed its certification.
— Leslie Josephs