In the latest episode of DH Unplugged, hosts Andrew Horowitz and John C. Dvorak navigate a turbulent week in financial markets, marked by dramatic swings in Big Tech stocks, a historic crash in South Korea's KOSPI index, and an unexpected unraveling of SpaceX's post-IPO momentum. The episode, titled "Rollercoaster Ride," arrives as investors grapple with mixed earnings reports and geopolitical tensions.
Horowitz, recovering from recent surgery, outlines the market's extreme volatility: the Dow swung 1,000 points upward and then 700 points downward, while oil prices reacted to shifting war headlines. Individual stocks showed stark contrasts, with Palantir surging 26% while AMD dropped 8% after hours. The hosts delve into earnings from Microsoft, Apple, and Amazon, noting Amazon's crossing of the $3 trillion market cap and Apple's 7% fall due to memory chip cost warnings.
A significant portion of the discussion focuses on the KOSPI meltdown, where leveraged ETFs and a wave of retail trading led to 350,000 blown-up accounts in South Korea. This event underscores the dangers of speculative trading in volatile markets, a theme Dvorak and Horowitz explore with cautionary tales.
SpaceX's post-IPO slide also takes center stage. Horowitz characterizes the decline as a "rug pull," pointing to insider selling, expired lockups, and a lack of support from major underwriters like Goldman Sachs, Morgan Stanley, and Merrill Lynch around the $135 level before shares fell to $108. The hosts question the sustainability of the company's valuation amid a Starlink subscriber miss and $40 billion in new debt priced toward junk status.
The conversation then shifts to the AI sector, where Dvorak critiques the "hackathon" narratives from OpenAI and Anthropic, as well as Google's new selfie-based authentication push. He dismisses the AI safety marketing cycle as a "regulatory moat play," noting that OpenAI has used the same playbook since GPT-2. Horowitz counters that whether it's manipulation or incompetence, the uncertainty makes it difficult for investors to price AI companies.
Other market-moving news includes Reddit's 20% plunge on weak AI licensing demand and a Meta miss tied to its Scale AI acquisition. The hosts also touch on housing, where Miami now has 140 sellers for every 100 buyers, drawing parallels to unsold Beanie Babies on eBay. Additional topics include TSMC's $100 billion investment in Arizona, Delta's confidence in higher fares, a salmonella recall affecting 1.6 million dozen eggs, and PCE inflation stuck at 3.3% core, along with a fresh 50% tariff on Canadian goods.
Throughout the episode, Horowitz and Dvorak provide a skeptical, unrehearsed look at the week's events, offering listeners insights into the forces driving market sentiment and the potential implications for investors.
