Pod Insights Prof G Markets Oil Falls on Israel-Iran De-Escalation, Tesla Rolls Out the Robotaxi, & Trump Media’s Buyback Grift About this episode Ed highlights what the markets are signaling about the path forward in the Middle East. Then, he and Scott unpack Tesla’s robotaxi launch. Finally, Ed analyzes Trump Media’s new share buyback plan.
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Transcript 4,848 words · 14 speakers
Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.
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1:29 Ed Elson? Today's number, 20. That's the percentage of S&P 500 CEOs who have worked at either General Electric or Procter & Gamble at some point in their career, more than any other company. Well, there you have it. The traditional MBA is dead. We've talked about this for a long time. The new Harvard Business School is Procter & Gamble. So if you want to be successful in business, my advice to you, forget about AI, forget about big tech. Build some expertise around refrigerators and dish soap. That's what people care about today. That's what it takes to get ahead.
2:06 Speaker 04 Money markets, Matt. If money is evil, then that building is hell.
2:16 Ed Elson? Welcome to Prof G Markets. I'm Ed Elson. It is June 24th. Let's check in on yesterday's market vitals.
2:23 Ed Elson? The major indices all rose around 0.9% as the markets eyed a path towards de-escalation in the Middle East. Meanwhile, crude oil futures fell more than 7%. More on that coming up. The yield on 10-year treasuries dropped after a Federal Reserve governor said she'd favor a rate cut in July. Energy stocks climbed on news that New York will build the first new nuclear plant in more than 15 years. And finally, shares of HIMSS shed a massive 35% after Nova Nordisk ended its partnership with the company. Okay, what else is happening? The US attacked Iran over the weekend, striking three of the nation's key nuclear sites. All three sustained severe damage, according to the Pentagon.
3:05 Ed Elson? Soon after the attack, President Trump said now is the time for peace. However, Iran quickly vowed to hit back at American interests, saying there would be, quote, "no return to diplomacy until it had retaliated." Less than 24 hours later, Iran launched strikes on a US military base in Qatar, and Iran's foreign minister added that the attacks would have, quote, "everlasting consequences." Meanwhile, Israel's leadership told its citizens to be prepared for a long campaign. And this just in. Monday evening, after markets closed, Trump announced that Israel and Iran agreed to a tentative ceasefire set to go into effect at midnight Washington time. However, there is still a lot to be learned about how the markets moved prior to the ceasefire.
3:50 Ed Elson? So let's get back to the episode and we'll see if this ceasefire holds.
3:55 Ed Elson? So, a lot of heavy stuff in there. The question we have to ask is, how did the markets react? Because as we discussed last week, the markets are a great prediction machine. And if we want to know what happens next, well, the best place to look would probably be the market. So, how did markets react? Well, surprisingly, they didn't react that much at all.
4:18 Ed Elson? Gold closed up 0.3% to $3,377. The S and P 500 closed up 1%. Even defense stocks were muted. Lockheed Martin closed down 0.2%. Northrop Grumman and Raytheon each closed up around 1%. Most surprisingly, though, was oil, which fell more than 7% on Monday. And that is very surprising because in a situation like this, where there are actual debates happening over whether or not the US has initiated a war, some people say this is a war, others say, no, this is just a targeted attack. Either way, you would expect the markets to have the opposite reaction. You would expect a decline in the stock market, a huge jump in gold, which is the safe haven asset. And given the fact
5:03 Ed Elson? that this is Iran, which accounts for 4% of the global oil supply, you'd also expect a huge jump in oil prices. But we got none of that. None of that happened. In fact, the opposite happened. And the question is why? Our producer Claire spoke with Rebecca Babin. She is the Senior Energy Trader at CIBC Private Wealth. Let's hear what she said.
5:24 Speaker 05 So I think over the weekend, we had this uncertainty about how Iran would respond, right? After the US kind of formally engaged in the conflict. And when we looked, when we talked last, right, we were talking a lot about the Strait of Hormuz, and that was very much still in play as what people saw as a potential option for them to target. And that has a direct impact on energy prices and crude flows. So the fact that what we saw today was Iran respond to attacking kind of a military base and not energy infrastructure kind of has taken that tail with getting really fat and big as an event and kind of reduced that probability. So we said, okay, we're really nervous. We're, we think there's
6:08 Speaker 05 a 35% chance that 20% of the oil flows that we consume on a daily basis may be impacted if this happens. And now we're saying, okay, we think that's a much smaller probability today. But it looks like for now, Iran does not want to go after energy infrastructure. That doesn't make this conflict any more easier, more palatable from another, from a social angle, but from an energy impact, this, the market is saying, I need to take down that geopolitical risk premium that I priced in over the weekend and over the kind of weeks as this has kind of been building.
6:46 Speaker 06 So what would you say are the odds of Iran actually going that far and targeting energy facilities?
6:52 Speaker 05 It's a really good question. I think the odds are below 15% that they go there, but this conflict has been anything but predictable. So the reason we're not much lower than where we are now, because if you keep, if you look at a chart, we're actually still up seven or eight percent from where we were before Israel initially attacked Iran, right? So we've taken about, I'm going to just round it here, half the premium out from where we were before this, this conflict kind of escalated from. So it's not a non-zero, but it's significantly less.
7:32 Speaker 05 And I think the way crude is trying to price this is who benefits from them going after energy infrastructure? And that's the key. It doesn't really hurt us as much as it hurts their main customer, China. It doesn't hurt the US as much as it potentially hurts its Middle Eastern neighbors, right? You close the Strait of Hormuz, you crush China, who's the biggest importer of crude oil in the world, and the main buyer of Iranian barrels. So that then, and they've been very neutral about how they've responded to this whole conflict. And you don't want to, you know, necessarily hurt your ally as much as you hurt your enemy.
8:13 Speaker 05 And so I think that's the calculus that, that the, the market is doing right now is, do they really benefit enough by taking that dramatic action? And those probabilities are coming down. It doesn't mean it's zero. I want to be very clear. This is not a zero probability. This is a reduction.
8:29 Ed Elson? So like, I think what we're learning with this Iran situation is the following. Many of us are very frightened by what is happening, and I think that is completely fair. But the investment community is also being pretty unequivocal in its message. And that is that World War III, the thing that everyone keeps talking about is not on the table right now. That's the message from the markets. And I think that's important to think about, especially over the next few weeks, where we're going to be seeing a lot of headlines that look, quite frankly, very scary. I mean, your TV, your social media, your group chats, they're all going to be popping off with messages and memes and conversations about how World War III is just around the corner.
9:13 Ed Elson? And I think it's very difficult to not get wrapped up in that and to not let it affect you on a day-to-day basis. But on this issue in particular, I do think it's very important to prioritize not what social media is telling you, not what Tucker Carlson's telling you, or your second cousin who's the new self-proclaimed expert on the Middle East. I think you should ignore all of that and focus on what the market is telling you. And right now, the market is not very worried about this. And I'm not saying that that means that you shouldn't be worried, but I do think that that is something that you should just keep in mind.
9:52 Ed Elson? Tesla officially launched its robotaxi service on Sunday. The launch was on schedule per Elon's most recent comments on X, but it also comes more than a decade since Elon talked about the Tesla robotaxi for the very first time. Shares rose roughly 9% on the news. So it finally happened. The robotaxi is, as of this weekend, officially a reality. But as with all Tesla events, there is an important question here, and that is how real is this reality? Was this a legit launch? Or was it, as Scott predicted a couple of weeks ago on this podcast, a fake launch or some sort of marketing stunt?
10:34 Scott Galloway? We're going to get to this event and it's going to be a bunch of jazz hands with bullshit like the Robovan or robots or I don't know flamethrowers. He's going to pull out anything you can out of his ass to say, hey, look over here and ignore the fact we are still way off from autonomous driving.
10:53 Ed Elson? And the answer is something in between. I don't think jazz hands would be a fair assessment of what happened over the weekend. You know, the robot taxi was operating. They had 35 model wise on the ground, driving around Austin. Also, the passengers did pay. They paid $4.20 per ride, but still they paid. So this was a launch and it was a commercial launch. It wasn't just a stunt. But there were a significant number of caveats that Tesla is going to have to address before they expand this. For one, and this is the most important in my view, every vehicle had a human Tesla employee in the passenger
11:33 Ed Elson? seat and the job of that employee was to act as a safety monitor. So yeah, they were autonomous, but was it completely autonomous? No, not really. There was still someone in the car. Also, the operating area was very small. It avoided highways and airports. The geofencing was very much confined. They also said it cannot operate in the rain. So the weather conditions have to be perfect. And then the final detail is that the only customers who were able to use it were a handful of pro Tesla influencers who were invited to try it out. And they all sat in the car and they livestreamed the experience. So in sum,
12:13 Ed Elson? yes, a launch, a successful launch, but still a ton of shortcomings. If I had to summarize, this was about the bare minimum they needed to demonstrate that the robot taxi exists and that it is operational. So why then did the stock jump 9% after that news? I mean, that is a pretty big jump. That's roughly equivalent to the market cap of Starbucks. So was it actually impressive enough to warrant that increase? Well, let's see what Paul Miller, Vice President and Principal Analyst at Forest Research had to say on this.
12:48 Speaker 08 Yes, I think broadly the stock market is saying, few. Tesla has been promising this for a long time. They've missed a lot of those promised launch dates for various things. And here Elon Musk said there will be robot taxis operating in the streets of Austin in the summer. And if you live in the northern hemisphere, as we both do, June is in the summer. So they have met their target. Some people might have hoped for more taxis. Some people might have hoped for them covering a bigger area. Some people might have hoped there wouldn't be a safety driver. But the promise was robot taxis in Austin in the summer and they've met that promise.
13:33 Speaker 08 So the stock market has gone job done.
13:36 Ed Elson? So, look, we have to give credit where credit's due. Tesla has a robot taxi and it appears to work. And I think if you're a Tesla investor, that is big news. As I've said before, the biggest question mark for Tesla isn't Elon and his drug habits or his relationship with Trump. It's the robot taxi. That is what is driving the valuation. And so we should be honest, this was a great signal. But at the same time, you also have to be realistic about this business. And my sense is that many investors on Wall Street continue to be overly optimistic, overly idealistic about the prospects and the timeline of this business. O C, for example, they believe that the robot taxi will generate over $600 billion by
14:20 Ed Elson? 2029 and that it'll also make up 60% of Tesla's overall business. That just seems a bit too much to me. Dan Ives, who we've had on the podcast, he thinks that Tesla's market cap will double over the next few years exclusively because of the robot taxi. Again, a bit much. I mean, we're 10 years in and what we saw this weekend was a handful of influencers who paid $4 to ride in a car with a Tesla employee. And to me, that's not that impressive, especially when you compare it to Waymo, which is doing a quarter of a million paid rides every single week. So the path to success here, I think, is still quite difficult. There's still a lot that could go wrong, whether it's the technology or the regulation
15:04 Ed Elson? or even the competition in Waymo. But before we conclude, let's check in with Scott and see what he thinks of this Tesla launch.
15:15 Ed Elson? How's it going, Scott?
15:16 Scott Galloway? It's going really well, Ed. Actually, is it going well? I did sleep out well last night. I'm a little tired, I'm a little moody, a little bitchy. My son's bummed me out. But other than that, everything's fine.
15:27 Ed Elson? Not going too well, it sounds like.
15:29 Scott Galloway? Nothing that an edible in about three hours of Netflix can't fix. How are you doing?
15:33 Ed Elson? Yeah, that's exactly right. I'm doing quite well. I wanted to get your take on this Tesla launch, which you said, well, you predicted it was going to be jazz hands or that you thought it was going to be in some way sort of not really a real launch. But it was a real launch, kind of. They had 35 model-wise driving around Austin. Your reactions?
15:53 Scott Galloway? Well, just from a consumer experience standpoint, do you really want to get in a self-driving car when there's a stranger in the passenger seat? The most appealing thing to me about self-driving is that I don't have to make small talk.
16:04 Ed Elson? Yeah.
16:05 Scott Galloway? Or, or look at some guy's air freshener, or, or yell at someone because I think he's not following ways. I just, and then feel bad about it. I just don't, I don't see why you'd want to get in a self-driving car with someone in the passenger seat. But anyways, look, they, they have, they have a real possible advantage here, and it's the following, that Waymo is based on very expensive, but very sophisticated LiDAR technology that is supposedly superior technology, but doesn't come cheap.
16:38 Ed Elson? Yeah.
16:38 Scott Galloway? My understanding is these cars, fully outfitted from Waymo, can run up to a quarter of a million dollars. And Tesla, granted, Tesla is like, at this point, you know, American intelligence, I don't, I don't know what to believe or not to believe. Still political humor there, Ed. They say they'll be able to produce cars for $36,000 with cheaper sensors and technology that is sort of adequate. And if they can do that, that's an enormous advantage. But what I would argue, if I were to bifurcate his universe right now, He is killing it in the first mover category, you know, first mover in EVs,
17:19 Scott Galloway? first mover in low orbit satellites and launch capability SpaceX, but his fast follower, I'm pissed off, I want to be in this business, self-driving or autonomous driving, or I want to be in AI, he doesn't seem to be doing that well. So I don't, I'm somewhat bearish on the self-driving. I think it's it's more than I thought it was going to be. They actually did launch, but it strikes me that this all comes down to whether the safety standards on this meet kind of a minimum viable, minimum viable product.
17:54 Ed Elson? Yeah. Well, I guess my question to you would be, at what point does it qualify as a minimum viable product? I mean, at what point do you think it's going to be fair to say, yes, they have a robot taxi, it works, they have a market, and the valuation should reflect that?
18:11 Scott Galloway? When a credible third party with arms distance data says that this product is within striking range of acceptable safety standards.
18:22 Ed Elson? Okay.
18:23 Scott Galloway? If they can put out a product, I mean, I used to drive a Renault car. It was a lawnmower with doors. If I got hit by a bike, there was a good chance I would get killed. There was absolutely no airbags. There was nothing between me and death in this lawnmower with doors. But because it had, at that point, enough safety that young sixteen-year-olds would buy this car, they had, you know, Renault could sell these cars. If this gets to a point where it in fact has consumer acceptance at a much lower price point, then he's got a competitive product. And then the next stage is kind of the stage
19:03 Scott Galloway? two of this war is the price war between these two companies as they roll this thing out. So. I think this is a tough one because this is an auto company trading in whatever it is, eight or $900 billion. It should be worth 50 billion based on the jazz hands of autonomous driving and robots. Robots is even, even Kathy Wood is going to have trouble keeping a straight face around this whole robot bullshit. So it's all about autonomous. I think consumers are more willing to get in dangerous vehicles than people think. I mean, look at, nobody knows, there could be another 10 Boeing aircraft disasters and people would still get in these things if they could get to Dallas for 76 bucks instead
19:45 Scott Galloway? of 77. So people talk a big game about safety, but as long as this thing meets a certain level of standards, and if it is in fact dramatically less expensive to punch these things out, then the Waymo LiDAR technology, he will have a competitive product.
20:01 Ed Elson? Okay. Final question for me. Do you hit the squat rack before or after you record the podcast?
20:08 Scott Galloway? Well, if you'd seen my buttocks recently, you would need to ask that, Ed. No, this is all for show. I find, I find if I just buy all this equipment, I get much bigger. Yeah, no, I've been, Ed, I'm sorry, Ed, it's not, it's not easy to look 59 and seven eights naked when you're 60, Ed. It's not easy.
20:29 Ed Elson? You're looking younger every day.
20:31 Scott Galloway? You know it, my brother.
20:32 Ed Elson? Well, enjoy your night, Scott.
20:33 Scott Galloway? Thanks, guys.
20:33 Ed Elson? Thank you. After the break, another grift from Trump Media. Stay with us.
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21:46 Speaker 02 This episode is brought to you by Michelob Ultra. Good times mean competitions between you and your friends. Like seeing who can throw some pigskin the farthest or rush the field the fastest. Winner gets an ultra because it's not just a superior like beer. It's also giving fans superior access to their favorite sporting events. Superior is worth playing for. Visit michelobultra.com/superioraccess to enter. Enjoy responsibly. Copyright 2026 Anheuser Busch InBev Michelob Ultra Beer, St. Louis, Missouri.
22:18 Ed Elson? We're back with Profty Markets. Trump Media and Technology Group announced a share buyback program yesterday. The company, which operates Truth Social, said it will buy back up to $400 million worth of its stock. They said it will improve the company's financial flexibility. Shares rose 0.3% on the day. Okay. Grift 101. This is another case of the president grifting his supporters to enrich himself. And let's just break down what is actually happening here. So the first thing you need to understand is why companies do buybacks. I mean, what is a buyback? This is where you compensate your shareholders by buying your own shares to decrease the
23:01 Ed Elson? supply of the stock and therefore increase the stock price. And as we've discussed before, this is something that is generally done by mature profitable companies. It's essentially the same as a dividend in the sense that you're taking the profits of your company and instead of reinvesting them into the business, you're just distributing them to the shareholders either in the form of dividends, which is a pure cash payment, or in the form of buybacks. So that's why companies do buybacks. And again, it only makes sense if you're a very profitable company because if you're not profitable...
23:35 Ed Elson? Then if you find some cash, you should be using that cash to try to get profitable, not to reward your shareholders. So that is why it is very strange that Trump Media Group, which posted more than $400 million in losses last year, is now announcing a buyback program. And it is even stranger when you realize that just last month, Trump Media Group raised one and a half billion dollars in an equity sale to supposedly transform into a crypto company. So the question then is, why would you raise money via an equity sale and then use the money you just raised to then reverse course and buy back $400 million worth of
24:18 Ed Elson? the equity that you just sold? What is the point in that? And in addition, why aren't you using that money to, I don't know, improve your business that is losing $400 million a year? And the answer, of course, is grift. This is the only explanation that justifies any of this, that justifies Trump siphoning off this money to enrich himself. Remember, Trump owns 60% of the company. And this is actually almost exactly the prediction I made a year ago when Trump Media went public via SPAC. If you remember, my view was that Trump needed to get his hands on nearly $200 million because of his civil fraud case with the state of New York. And the easiest way to do that would be to take his company public
25:00 Ed Elson? and then use the proceeds of the SPAC to enrich himself. The only difference is that I predicted that this would happen not via a buyback program, but via a dividend program.
25:12 Ed Elson? When they created the SPAC, they sold $300 million worth of shares to investors. And that money is sitting in the company right now in cash. So I think Trump, I mean, he's clearly aware of this. I think the question he's asking himself right now is, how can I get that cash out of the company? And the most logical answer to me I think Trump Media Group is going to announce a dividend, they're going to give the money to shareholders, Trump takes 60%. It'll all be money that was in essence put up by, you know, his supporters who bought the stock and he'll use that money to pay off the lawsuit. So it would be one of the greatest grifts ever. So I'm going to count this prediction as pretty much correct. The only thing I
25:54 Ed Elson? got wrong is that it wasn't a dividend, it was actually a buyback. And to be honest, I should have realized that because what is the crucial difference between those two things? Well, dividends are taxed as regular income, that's around 40%. Buybacks are taxed as capital gains, that's 20%. So the share buyback was the more tax efficient grift method, and that's why he took that route. So what can we expect now? Well, to fully complete this prediction, we would need Trump to use the shares to pay off his civil fraud case, either by simply selling them or by borrowing against them. And as a reminder, he still owes money to the state of New York, more than $500 million right now, because
26:39 Ed Elson? the debt has been piling up while he appeals the lawsuit and that appeal is still being litigated. So my follow-up prediction, he's already using the cash in the company to inflate the price of the stock, which is tantamount to a dividend. Next up, I think Trump will sell his stock in Trump Media Group, but only once he has an official answer from the court. Because right now, it's being appealed. But if it turns out that he does have to pay it, if he has to pay $500 million, well, then he has this very nice backup plan, which is that he has a big, big pile of money that he collected from the SPAC and from this buyback program, and it's Trump Media Group. So there's your daily dose
27:20 Ed Elson? of grift 101. I predict this will become a running series. We are seeing new grift policies basically every single week, and this is just the latest one. And if you've been listening to the podcast, then you probably saw this coming. But more grift from Trump, more evidence that our president is probably the greatest grifter in the history of our country.
27:43 Ed Elson? Okay, that's it for today. Thanks for listening to Prof G Markets from the Vox Media Podcast Network. I'm Ed Elson. I'll see you tomorrow.
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