The World’s First Trillionaire, Governance Meets Growth, Menopause Market Boom

0:00Wall Street Week is brought to you by OTC Markets Group. OTC Markets' overnight platform for exchange-listed securities, Moon ATS, provides access to global securities in U.S. dollars from 8 p.m. to 4 a.m. Eastern, Sunday through Thursday. Learn more at otcmarkets.com slash moon. Moon ATS is operated by OTC Link LLC, a FINRA-registered broker-dealer, and is available only through participating broker-dealers. So there's a lot of noise about AI, but time's too tight for more promises. So let's talk about results. At IBM, we work with our employees to integrate technology right into the systems they need.

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1:41This is Wall Street Week. I'm David Weston bringing you stories of capitalism. Everyone loves a winner, but can one man win too much? We look at the staggering wealth of the world's first trillionaire, Elon Musk. What does it tell us about the health of our capitalist system? And that trillion dollars in Elon Musk's pocket comes from the IPO of SpaceX, where investors are backing him personally in what looks like the ultimate key man provision. But corporate governance concerns have some institutional investors sitting on the sidelines of the biggest IPO ever. Plus, it's a condition half of all people on Earth will experience.

2:17But until recently, menopause has largely gone unmentioned and unaddressed by big business. Now, changes in treatment and in regulation are pointing to a major new healthcare investment opportunity. But we start with the ever-changing media world, as leaders have been meeting this week for the annual Allen & Company conference in Sun Valley. Activate founder and CEO Michael Wolff has spent his career in media, including as president and COO of MTV Networks. So Michael, this week, the media conference of Herb Allen out in Sun Valley has been held. Typically, deals come out of that conference. This time, we have a couple of big media deals going in, one with Fox and Roku, and one with Comcast deciding to spin off NBCU.

3:03What do you think the talk is going to be? First of all, it's not just a media conference any longer. A lot of it is tech. You're going to be the head of all the major tech companies and the head of all the major AI companies. So I think there may be some other deals that will come out of it. And they're going to be, the conversations are going to be everything about video streaming, big media deals, AI, sports. It's all going to come together and all these people have a stake in it. Start with Fox Roku because some people said, what are they doing buying Roku? Well, first of all, Fox has been the most disciplined of all the media and entertainment companies in this age of streaming.

3:40They really totally avoided the streaming arms race. So they bought, a couple years ago, they bought Tubi in 2020,$440 million, probably one of the best media deals of the last decade. Today it's doing over a billion dollars in revenue. And it's all about free advertiser-supported television. 86 % of American households today are paying for streaming. meaning you only have about 50 % that are watching free advertiser-supported television. And they have the largest service in that. They have almost 100 million users. So that's their starting place. They buy Roku. Roku has 100 million homes in the U.S.

4:21that are using the Roku operating system. 28 % of all connected TVs in the U.S. go through Roku. They have the Roku channel, which itself is about 80 million users. And so here they own the channel, they own the box, they own the software, they own the data, and they own the advertising. And so this deal makes a huge amount of sense, and it takes them out of the business of competing with everybody else in terms of buying big programming, paying for customer acquisition, retention, and worry about where the next subscriber is going to come from. So pick up on exactly that point. You, for a long time, have been telling me, watch the free advertiser-supported streaming coming up.

5:07But that works better for some content than for others. I mean, news and sports, it may work well for. I'm not sure it works well for the blockbuster Netflix mega show. Well, it doesn't have to work for the mega show. You've got shows like, so for example, on Tubi, you've got shows like Empire, and you've got movies like Twilight. A lot of this is not news or sports. A lot of this is largely scripted programming that both series and films that wouldn't ordinarily be on the major streaming services. Or if they are, they're on a streaming service and then they're on Tubi, Roku or Pluto for free.

5:48Even with the Roku acquisition, Fox remains a much smaller media company than a Disney or a Netflix, not to speak of Paramount, the Warner Brothers. Can it compete in that world? I think we're moving to a point where focus is more important. I think size is not as important. And in these media conglomerates, some of them will work and some of them won't. But Fox is very focused and it's focused on businesses that throw off cash. It's one of the reasons why it's been the absolute best performing media stock. And the result of it is just very disciplined, not going after the battle on streaming, and sticking to businesses like television stations and a network and cable networks, and now Tubi, that throw off cash.

6:36When you talk about focus, I think about Brian Roberts and Comcast, the other big deal here. By the way, I did this if you look at the track of the stock of the two companies, Fox versus Comcast over the last five years, they're almost inverses of one another. So why is Brian Roberts finally throwing in the towel and saying, let's break it up? You're asking the right question, David, because they're not really throwing in the towel. They're taking this business, and essentially earlier they spun off the cable networks in Diversant, and they're creating three different companies, each of them with different competitive dynamics, different growth profiles, and different economics.

7:11So by simplifying the business, the core connectivity business can make the capital investments it wants. Investors aren't worried. Are they going to spend on more plant and equipment versus are they going to spend on the next series? So it's very focused. And also, connectivity has become like a bundle. You don't just buy connectivity at home. You buy connectivity. You buy cable. You buy mobile. You buy other services from them. So that business is focused. In terms of the NBC Universal, well, this is a growth business. They're going to be able to go deeper and deeper into some of the areas that they're in today.

7:52They're doing unbelievably well as your sports destination. It's a default if you want sports. I don't think you can get sports as all of sports unless you're watching NBC or you're subscribing to Peacock or both. For somebody who's been around this for a while now, streaming seems like a brand new thing. But it's rapidly looking like an old thing compared to what's next, which is AI and tech. Takes us back to the Allen Conference and the other half of the Allen Conference. What can we expect in terms of media and tech? The AI guys are investing over$700 billion next year in plant equipment and capital.

8:32and they've suddenly realized that content is a critical asset for them, that it is a foundational asset. So they're all going to be trying to do deals with the content companies, first of all, around anything that is information or news. So that's why we saw earlier this year, we saw News Corp just do a deal with Meta. We're going to see lots more of those deals with content companies. The days are over where the user is just going to be happy with them scraping the web or going to Wikipedia. And then at the same time, they all want a piece of the video creation business. And so right now, Google has Veo, which is being used by studios and others to not just convert films, but make new programming.

9:19So everyone's going to be trying to figure out how they're going to go from the LLM, the query model, into one that it helps people create content. With each one of these steps, I wonder whether the margins don't get squeezed more. The size goes up, including internationally, globally, but the margin goes down. Back in the good old days, I would say, you owned a major market television station. The margins were really big. WBCT, the first time I went there and got access to it, it was 60 % profit margins. With each one of these, you may have a deal with the AI people to be able to use their content, but isn't it going to be pennies on the dollar?

9:56It's really turning out to be a world of have and have nots. If you have a high share station in a good market, you're making a lot of money. If you are a low share station, no matter what the market, you're not making a lot of money. And so TV station business is still a great business. It's slowed down because of what's the decline of cable. But in some of these businesses, the margins are going to decline. And the street, when the street looks at these media and entertainment companies, the street needs to be convinced that streaming is going to be a good business and it's one that's going to ultimately be a high margin business.

10:31And right now, it doesn't look that way. To come back to deals and what might or might not come out of the Allen conference, the AI people are spending a lot of money on data centers and about on compute, right? A lot of money. Are they interested in actually buying a major media company? I really doubt it. I think that maybe on the information side, because information is so critical, but those deals are going to be easier for them to make those deals. And any of the information companies would be very glad to take a piece of the$700 billion that's going to be spent. I do think that there's going to be more soft deals.

11:11I think there will be investment in these different businesses because I don't think that they have a choice. So you spend your days advising a lot of these companies for their strategies and how to approach this uncertain world. Who's going to win? And I don't mean for you to say which name of which company, but the winner will do what? And the ones who don't win will have failed to do what? I think the winners will be the people that have the best programming or the best information and the best sports. So programming, they can own. Sports, they're going to have to have those rights. And sports is a huge driver of the entire ecosystem.

11:49It's why NBC is moving towards the year-round Sundays. So entertainment, long-form scripted, reality, whatever it might be, this is really what drives people. It's going to drive that over five hours a day of people in the U.S. watching video. It's going to be sports. It's going to be information. And then finally, it's going to be data. and that people have, in order to be able to serve advertising that's going to help advertisers and marketers sell, there needs to be data. And that's a piece of the Fox-Roku deal that also we shouldn't forget, which is that Fox gets a huge amount of data through Roku that informs its own advertising.

12:32Coming up, spend a dollar every second for 31 ,000 years. That's what a trillionaire would have to do to go through all his money. It's a lot of money, but what does it mean for the rest of us?

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14:08This is a story of unimaginable wealth. Elon Musk is now a trillionaire. But the story is about more than one person's enormous fortune. It's about how markets reward capital, how our tax system treats it, and how much power can accumulate at the very top. I give SpaceX less than a 10 % chance of succeeding at all. to be clear. In fact, I told people this. I said, look, we're probably going to fail, but, you know, we should give it a try. SpaceX made history last month with the biggest ever IPO, raising$75 billion on a market value of nearly$2 trillion, more than double that of Saudi Aramco's$29 billion listing in 2019.

14:57Encouraging more of that type of innovation in the American economy rather than less of it seems important, but also trying to make sure that we are fiscally responsible and disciplined. SpaceX is now one of the most valuable public companies in the world, putting its founder and CEO into a category all his own, the world's first trillionaire. As Nobel Prize-winning economist Paul Krugman points out, public markets are turning ownership stakes into staggering concentrations of wealth. Until recently, we've been talking about income. And we mostly talk about the top 20 % or even the top 1%. But wealth is a whole different story.

15:37And wealth is really where the action is. So it's wealth, top 1%, it totally dominates wealth. But it's the inequality within the top 1%. It's the top 10th of a percent or the top 0.001 or whatever that is. Just a handful of people. Elon Musk, obviously, is the best known. But really, if you look at the top 10 people in the United States, there's an incredible amount of wealth there. And that is relatively new. Even in the year 2000, we were already talking about the 1%. But this 10 billionaires, 10 mega billionaires, that's a new story. And at this scale, the numbers start to outrun the language we use to describe them.

16:15These numbers, like billions, hundreds of billions, trillions, you start to not even be able to realize or understand what the magnitudes really mean or demand of the American economy. To fully comprehend how much a trillion dollars is, Yale law professor and co-founder of the Budget Lab, Natasha Saron, offers a different way to measure it. A million seconds is about 11 and a half days. A billion seconds is about 32 years. a trillion seconds is 31 ,700 years. That is roughly back to when humans first began painting cave walls. And so a trillion dollars is just such an astounding and significant sum that it is almost hard to grasp what it means.

17:09With a trillion dollars, Elon Musk could buy every carmaker in the U.S., Europe, and Japan, like GM, BMW, and Toyota, which total around $900 billion, and still have nearly$100 billion left over. NASA's budget for 2025 was$24.6 billion, meaning Musk could fund the space agency 41 times over. And if Musk were his own country, his territory as of now would be richer than 156 other nations. He sits at number one on Bloomberg's billionaire index, followed by former Google CEO Larry Page with$314 billion, one-third of Musk's net worth. But Musk is not the only one benefiting. SpaceX's IPO has created thousands of new millionaires inside the company, And the next wave of wealth creation may already be on its way as more technology companies, especially those tied to artificial intelligence, move toward the public markets.

18:13Both Anthropic and OpenAI filed for IPOs in June, with estimated valuations already pushing that trillion-dollar mark. Big tech is driving so much of the stock market, for example, right now, and these mega-IPOs are AI-related in one shape or another. How much of it is tech? A lot of it is tech. Used to be, not that long ago, we would think, we used to say Wall Street was really driving this, although now it really is tech. The ranks of the super rich, aside from being enormously richer than they used to be, they're also much more sort of monochromatic than they used to be. Often, with great fortune comes political influence.

18:49The Doja influence will only grow stronger. It's, I liken it to a sort of Buddhism. It's like a way of life. So it is permeating throughout the government. In 2025, President Trump put Musk in charge of the Department of Government Efficiency, or DOGE, in which government agencies suffered massive financial and employee cuts. As more people cross into billionaire territory, and now possibly trillionaire territory, Krugman says the question becomes larger than net worth. It becomes a question about democracy. The Times did a report saying that 300 billionaire families accounted for something like 19 percent of campaign contributions in 2024.

19:30And that's only the explicit stuff that's counted by the Federal Elections Commission. If you count all of the invisible channels of influence, well, if you have that much wealth at the top, it does make us, in a meaningful sense, a less democratic nation. Musk's trillion-dollar milestone is historic, but it's not the first time American capitalism created a new financial class. Just over a century ago, John D. Rockefeller became the country's first billionaire through his controlling stake in Standard Oil. The Rockefellers in the early 20th century were really rich. John D. Rockefeller, the founder of Standard Oil, he crossed the one billion mark in the 1910s.

20:13And when you adjust that for the share of the U.S. economy, he's about at a trillion dollars. So right now, basically 120 years after the first billionaire, we have the first trillionaire sort of hitting basically that same mark in terms of the U.S. economy. Bloomberg reporter Ben Steverman has covered Elon Musk's rise and has seen some similarities between the first billionaire and the first trillionaire, but also some key differences. The Rockefellers did not want to be known as billionaires. They already felt like they had a target on their back. They were in control of this monopoly that was incredibly controversial.

20:51A case against them went all the way to the Supreme Court and they lost. So they did not want to be known as billionaires. That sounds different from now. I'm not sure that Elon Musk is that upset about being called a trillionaire. It wasn't just John D. Rockefeller. There was a gilded age and there were Carnegies and there were other people who had a lot of money. Was it a different sort of societal reaction? Yeah, I think there was the Gilded Age in the late 19th century and early 20th century, but the progressive era was coming in, and that level of wealth just became incredibly controversial.

21:21That level of power in society became very controversial. It was in the time of the Rockefellers, Carnegies, and Vanderbilts that the 16th Amendment was ratified, giving Congress the power to tax incomes from whatever source derived. laying the foundation for our modern income tax system. But today's large fortunes are not built mainly from income. They are built through ownership stakes, stock appreciation, and capital gains. There was no conception of a trillionaire then. Yeah. Was this system set up for trillionaires? You can kind of trace its roots back to concerns about inequality in the first Gilded Age.

22:01You know, concerns that there was wealth that was being concentrated in these American oligarchs that we didn't actually have a good handle on how to tax because of the restrictions with respect to the ability to tax income and issues dealing with apportionment that dated back to the Civil War. But it was exactly in response to the needs of the FISC to finance itself and concerns about inequality and its rapid growth in society. And so in some sense, you're kind of seeing the same movie play again, except it turns out that the income tax doesn't seem exceptionally well situated to be able to tackle the nature of inequality in this country because the income tax is a tool that's leaving out of its tax base something like 40 percent of the wealth of those at the very top.

22:55And so a bit I have wondered whether one way to understand the sort of ideas that are being put forth with respect to things like wealth taxation or mark-to-market taxation of capital gains, whether this is the new income tax movement in some sense in this country. The tax system, though, actually has a disincentive to freeing up capital, does it not? Because if you're only going to have to pay on returns, and when you realize, when you sell the asset or otherwise transfer the asset, then you just tend to sit on the asset and it's not freed up. If you look at the way the system is structured, it is structured such that there is a huge incentive for Elon Musk to transfer his ownership stake in Tesla and SpaceX and X to his heirs, rather than to transfer it potentially during his lifetime.

23:46Taxes on wealth or on capital income are a real way to curb this. You have corporations paying almost no tax with no tax, passing their profits on to one way or another to people who own stock, who then pay little or no tax. So we really have exacerbated this inequality. It's because so much wealth is generated by appreciated capital rather than high incomes. The California is now considering the Billionaire Tax Act, which would impose a one-time levy on residents worth over$1 billion. But unlike during the first Gilded Age, Americans in recent years have had a more nuanced view of the ultra-wealthy getting even richer.

24:32You don't see a lot of anger, actually, in the polling at billionaires until fairly recently. So that indicates to me that the average American actually kind of wants to be rich themselves. I think it becomes a problem for a lot of Americans when there's a sense that the system's rigged or that the people at the top are somehow manipulating things to make their lives harder. How much of this is, forgive me, envy? Suppose we all had a minimum income, everybody in the country, that was sufficient. Would we feel better about inequality? We would feel better about inequality if we had the basics, we're sure.

25:12If everybody had health care, if everybody had a roof over their heads, if everybody had sufficient nutrition, which, by the way, we don't. The thing to say about that is that doing that is quite expensive. I think that there's something fundamentally skewed, demoralizing, corrupting about really extreme inequality. I think a society in which, essentially a society in which there's trillionaires, is not going to be a good society even if everybody has the basics. But, you know, if we could take a step towards making sure that everybody had the basics, then that would deprogress. Capitalism rewards winners, those who innovate and create successful businesses and help grow the economy overall.

25:57But as those rewards soar beyond our wildest imagination, the question becomes whether there can be too much of a good thing. No billionaires! No trillionaires! Whether the system can provide those lavish rewards without leaving the vast majority of us behind. And ultimately, whether the growing gap could put democracy itself at risk. Up next, the SpaceX launch hasn't just created large gaps in wealth. It's also created large gaps in the power of the shareholders investing in the company. Gaps that have led some to question whether it's the right investment for them.

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