Elon Musk’s trillionaire status at risk; oil price lowest since Iran war began – business live
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
Elon Musk could soon be down to his last thousand billion dollars, after the share price of his recently floated SpaceX came under pressure this week.
Musk became the world’s first trillionaire this month when SpaceX floated on the stock market. But after a 16% drop in SpaceX’s shares on Monday, Musk’s wealth has declined to $1.1tn.
Monday’s drop alone wiped out more than $152bn from Musk’s net worth, according to Forbes estimates. And most of those who bought into SpaceX since it floated on 12 June are facing smaller losses.
SpaceX’s shares closed at $156 last night, slightly above the $150 at which they started trading on the 12th, but sharply below the record high of $225 set a week ago. The IPO was priced at $135, so everyone who took part is still in the money.
The weakness in the last week has dragged SpaceX’s value down from a peak of about $2.99tn to just over $2tn last night. That’s a fall of almost $1tn, or nearly one Musk.
Danni Hewson, head of financial analysis at AJ Bell, says:
double quotation markSpaceX might have seemed charmed after its record-breaking IPO and subsequent rally, but it’s come down to earth with a bump over the past couple of days, with shares at one point falling below the opening price on its market debut.
“Post-IPO stocks often enter a period of volatility as the market gets to grips with the new entrant, some investors rush to cash out, and others assess at what price they are willing to jump in.
“For a stock like SpaceX, a lot of decision making might have been emotional and based on the anticipation of huge leaps forward in space exploration and utilisation, but investing should be something treated with clear eyes and patience, even when such huge numbers are involved.
double quotation markSpaceX might have seemed charmed after its record-breaking IPO and subsequent rally, but it’s come down to earth with a bump over the past couple of days, with shares at one point falling below the opening price on its market debut.
“Post-IPO stocks often enter a period of volatility as the market gets to grips with the new entrant, some investors rush to cash out, and others assess at what price they are willing to jump in.
“For a stock like SpaceX, a lot of decision making might have been emotional and based on the anticipation of huge leaps forward in space exploration and utilisation, but investing should be something treated with clear eyes and patience, even when such huge numbers are involved.
Musk was also hit by a 5.8% drop in Tesla’s shares yesterday, as the tech sector was hit by a broad selloff in AI and semiconductor stocks.
The agenda
9am BST: IFO survey of Germany’s business climate
9am BST: IFO survey of Germany’s business climate
10am BST: House of Lords Financial Services Regulation Committee hearing on the consumer insurance market
10am BST: House of Lords Financial Services Regulation Committee hearing on the consumer insurance market
10:15am BST: Treasury Committee hearing on the Financial Services and Markets Bill
10:15am BST: Treasury Committee hearing on the Financial Services and Markets Bill
Noon BST: US mortgage approvals data
Noon BST: US mortgage approvals data
3pm BST: US new home sales data for May
3pm BST: US new home sales data for May
Three stranded tankers carrying 5 million barrels of crude oil are exiting the Strait of Hormuz on Wednesday, with two heading to Asia, shipping data today shows.
It’s a sign that the peace deal between the US and Iran is helping to lift oil supplies from the Gulf, putting downward pressure on prices.
Reuters has the details:
double quotation markSouth Korean-flagged VL Breeze, a Very Large Crude Carrier carrying 2 million barrels of Qatari condensate and Abu Dhabi crude, passed the strait and is heading to Daesan, data from LSEG and Kpler showed. The supertanker is chartered by South Korean refiner Hyundai Oilbank.
VLCC Plata Carrier, chartered by Indian Oil Corp IOC.NS, is heading out of the strait with 2 million barrels of Saudi crude, alongside Suezmax tanker Prudent Warrior, which is heading for Sohar, Oman, with 1 million barrels of Iraqi Basrah crude, the data showed. Both are sailing under the Liberian flag.
double quotation markSouth Korean-flagged VL Breeze, a Very Large Crude Carrier carrying 2 million barrels of Qatari condensate and Abu Dhabi crude, passed the strait and is heading to Daesan, data from LSEG and Kpler showed. The supertanker is chartered by South Korean refiner Hyundai Oilbank.
VLCC Plata Carrier, chartered by Indian Oil Corp IOC.NS, is heading out of the strait with 2 million barrels of Saudi crude, alongside Suezmax tanker Prudent Warrior, which is heading for Sohar, Oman, with 1 million barrels of Iraqi Basrah crude, the data showed. Both are sailing under the Liberian flag.
The euro has hit its lowest level in over a year, as the falling oil price reduces the possibility of interest rate hikes in the eurozone.
The European single currency has dropped by 0.4 of a cent today to $1.134, the lowest since 2 June 2025.
Over the last week it has fallen by almost three cents against the US dollar, as the US-Iran peace deal has eased inflation worries.
Two weeks ago, the European Central Bank raised its key interest rates, warning that prolonged disruption of energy supplies could increase energy prices further and for longer than currently expected.
Higher energy prices have already pushed inflation to 3.2% across the eurozone, over the ECB’s 2% target.
Analysts at Unicredit predict price increases will gradually normalise, as the easing in energy prices provides some relief to euro area inflation.
They told clients:
double quotation markThe recent decline in oil prices is likely to feed through quickly to transport fuel prices, which have been a key driver of the inflation surge observed so far.
double quotation markThe recent decline in oil prices is likely to feed through quickly to transport fuel prices, which have been a key driver of the inflation surge observed so far.
Segro have confirmed they have “unequivocally” rejected a takeover proposal from US rival Prologis, saying the £12.6bn bid falls “a long way short” of its true value.
In a statement to the City, Segro say:
double quotation markThe Board of SEGRO considered the Proposal together with its advisers and believed that the Proposal was opportunistically timed and sought to take advantage of the clear dislocation between SEGRO’s current share price and its highly attractive underlying business and strong prospects. This has been accentuated by major geopolitical issues which have adversely impacted trading valuations across the UK and European real estate sectors relative to the US REIT sector.
SEGRO has a clear strategy, supported by a strong balance sheet and a proven operating platform. Momentum is building in SEGRO’s occupational markets and the Company has a large and attractive development pipeline, including an exceptional data centre platform, as well as a long track record of delivery.
Accordingly, the Board remains very confident in SEGRO’s ability to capture substantial value for its shareholders during the coming years.
double quotation markThe Board of SEGRO considered the Proposal together with its advisers and believed that the Proposal was opportunistically timed and sought to take advantage of the clear dislocation between SEGRO’s current share price and its highly attractive underlying business and strong prospects. This has been accentuated by major geopolitical issues which have adversely impacted trading valuations across the UK and European real estate sectors relative to the US REIT sector.
SEGRO has a clear strategy, supported by a strong balance sheet and a proven operating platform. Momentum is building in SEGRO’s occupational markets and the Company has a large and attractive development pipeline, including an exceptional data centre platform, as well as a long track record of delivery.
Accordingly, the Board remains very confident in SEGRO’s ability to capture substantial value for its shareholders during the coming years.
The drop in the oil price today is helping to pull down government borrowing costs.
Government bond yields, which are sensitive to inflation expectations, have weakened.
The yield on 10-year UK government bonds have dropped by 2 basis points (0.02 of a percentage point) to 4.73%.
30-year gilt yields are down a little too, dropping by almost 2bps at 5.438%.
This fall in yields suggests that political uncertainty in the UK is not pushing up government borrowing costs, as speculation swirls over who might replace Rachel Reeves as chancellor, and whether they might loosen the commitment to the fiscal rules.
There are signs that the two main engines of eurozone growth are spluttering back to life, my colleague Phillip Inman writes.
The Ifo Institute for Economic Research in Munich, published a monthly business confidence index that has improved for the second consecutive month.
Analysts at ING said the increase in Germany’s most prominent leading indicator, the Ifo index, to 85.6 in June, from 84.9 in May shows business optimism is gradually returning.
They said:
double quotation mark“Interestingly, not only expectations but also the current assessment component improved in June.”
double quotation mark“Interestingly, not only expectations but also the current assessment component improved in June.”
There was a cautionary note, highlighting how the index remains below its pre-war level, and that “the German – and indeed the wider European – economy remains in a kind of twilight zone”.
Official data is expected to show the negative effects of the Iran war and high energy prices for some time. The second quarter national income figures could show that German gross domestic product (GDP) slipped backwards in the second quarter. But “the index, points to a return of optimism”, said ING.
In France, it’s possible to judge that the consumer is confident enough to run down their savings to maintain day-to-day spending.
French banks have reported outflows in regulated savings accounts for the fifth consecutive month, leading to a cumulative €6bn of outflows across the year.
There are technical reasons why this might have happened, including the government lowering the interest rate on regulated savings products, so it is possible the cash withdrawn is simply finding its way into other forms of saving.
But if the French are following their US cousins, who have run down their savings dramatically over the last four months to maintain their spending, then it could indicate that the downturn sparked by the Middle East conflict will be shallow in the eurozone’s second largest economy, as it has been in the US.
The oil price has dipped to its lowest level since the Iran war began.
Brent crude has dropped by 1.8% today to $75.59 a barrel, as peace talks between the US and Iran continue.
That’s the lowest since 2 March, the first day’s trading after the conflict began, but still above oil’s pre-war level of $72.48 a barrel.
The US secretary of state, Marco Rubio, said yesterday that no country, including Iran, would be allowed to charge tolls for shipping in the strait of Hormuz, signalling that Washington would take a firm line in peace negotiations with Tehran.
Neil Wilson, investor strategist at Saxo UK says a “geopolitical risk premium is being unwound as the deal between the US and Iran sees shipping pass through the Strait of Hormuz”.
Shares in Airbus have dipped by 0.5% this morning after Europen regulators ordered urgent inspections of 16 Airbus A380 planes.
The European Union Aviation Safety Agency issued an emergency airworthiness directive, after cracks were found in a wing component on some aircraft.
The checks will focus on the wing mid-spar, a key structural element inside the wing that carries much of the aerodynamic load during flight.
Fifteen of the affected aircraft are operated by Dubai-based Emirates and one by Australia’s Qantas.
Shares in UK real estate stocks are rallying broadly, following the takeover approach for Segro.
Land owner and developer Harworth are up 5.6%, while self-storage group Big Yellow has gained 4%.
Oli Creasey, head of property research at Quilter Cheviot, says Prologis’s bid for Segro will send ripples through the UK’s Real Estate Investment Trust (REIT) sector:
double quotation markSegro may be the biggest fish in the UK REIT pond, but at a market cap below £10bn is a minnow compared to Prologis.
It remains to be seen whether the combination will go ahead - in our view Prologis would be reluctant to increase the offer materially and take it above NAV - but the very fact that it was deemed possible given the company’s pan-European footprint and 460 employees that make it a more complex transaction than its smaller peers means that the entire sector could be back in the shop window for even larger, foreign companies.
double quotation markSegro may be the biggest fish in the UK REIT pond, but at a market cap below £10bn is a minnow compared to Prologis.
It remains to be seen whether the combination will go ahead - in our view Prologis would be reluctant to increase the offer materially and take it above NAV - but the very fact that it was deemed possible given the company’s pan-European footprint and 460 employees that make it a more complex transaction than its smaller peers means that the entire sector could be back in the shop window for even larger, foreign companies.
A new takeover battle has begun in the City of London, where UK warehouse landlord Segro has rejected a takeover approach from its US rival Prologis.
Prologis’s approach, which has been slapped down, valued Segro at £12.6bn, or almost 25% more than its value last night.
Prologis says it made its offer on 16 June, and it was “unequivocally rejected” by Segro’s board yesterday.
Segro’s shares have jumped by 15% to 857p each, approaching Prologis’s bid of 925p each.
Segro began as The Slough Trading Company in 1920, when a military repair depot was turned into an early example of a modern industrial estate (there’s a rather fine history of the company here).
It’s business boomed in the pandemic, when demand for home deliveries jumped, leading to increased pressure on warehouse space.
After a stellar run in recent months, technology stocks are under pressure amid growing expectations of interest rate rises.
Those expectations were bolstered last week by the US Federal Reserve, which hinted it could raise borrowing costs before the end of the year.
That would be painful for AI companies who have issued huge amounts of debt to fund their expansion plans.
Indeed, yesterday SpaceX sold $25bn of investment-grade bonds to repay the bridge loan the company took out in March after Musk merged his artificial intelligence lab, xAI, and social media platform X into the rocket company.
That, Bloomberg says, is the final step of replacing the costly debt that had helped finance Musk’s 2022 acquisition of X, and also repaying loans and bonds issued by xAI last year to bridge its rapid cash drain.
Financial analyst Bill Blain of Windshift Capital sees signs that SpaceX could fall further, writing this morning:
double quotation markCongratulations if you successfully “stagged” out of the SpaceX IPO at the $225 top last week.
Yesterday the reverse-rocket stock briefly broke lower than the $150 post-IPO opening price. The option market is bearish, hinting it could break $100 if the slide continues. There was clearly good money to be made playing the FOMO curve that erupted around the deal, but the secret of any good party is knowing when to bail-out.
The rapid pump’n’dump performance of SpaceX has triggered a reassessment of the whole Tech market’s value. What is real and what is hype in terms of real costs and achievable profits in AI?
double quotation markCongratulations if you successfully “stagged” out of the SpaceX IPO at the $225 top last week.
Yesterday the reverse-rocket stock briefly broke lower than the $150 post-IPO opening price. The option market is bearish, hinting it could break $100 if the slide continues. There was clearly good money to be made playing the FOMO curve that erupted around the deal, but the secret of any good party is knowing when to bail-out.
The rapid pump’n’dump performance of SpaceX has triggered a reassessment of the whole Tech market’s value. What is real and what is hype in terms of real costs and achievable profits in AI?
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
Elon Musk could soon be down to his last thousand billion dollars, after the share price of his recently floated SpaceX came under pressure this week.
Musk became the world’s first trillionaire this month when SpaceX floated on the stock market. But after a 16% drop in SpaceX’s shares on Monday, Musk’s wealth has declined to $1.1tn.
Monday’s drop alone wiped out more than $152bn from Musk’s net worth, according to Forbes estimates. And most of those who bought into SpaceX since it floated on 12 June are facing smaller losses.
SpaceX’s shares closed at $156 last night, slightly above the $150 at which they started trading on the 12th, but sharply below the record high of $225 set a week ago. The IPO was priced at $135, so everyone who took part is still in the money.
The weakness in the last week has dragged SpaceX’s value down from a peak of about $2.99tn to just over $2tn last night. That’s a fall of almost $1tn, or nearly one Musk.
Danni Hewson, head of financial analysis at AJ Bell, says:
double quotation markSpaceX might have seemed charmed after its record-breaking IPO and subsequent rally, but it’s come down to earth with a bump over the past couple of days, with shares at one point falling below the opening price on its market debut.
“Post-IPO stocks often enter a period of volatility as the market gets to grips with the new entrant, some investors rush to cash out, and others assess at what price they are willing to jump in.
“For a stock like SpaceX, a lot of decision making might have been emotional and based on the anticipation of huge leaps forward in space exploration and utilisation, but investing should be something treated with clear eyes and patience, even when such huge numbers are involved.
double quotation markSpaceX might have seemed charmed after its record-breaking IPO and subsequent rally, but it’s come down to earth with a bump over the past couple of days, with shares at one point falling below the opening price on its market debut.
“Post-IPO stocks often enter a period of volatility as the market gets to grips with the new entrant, some investors rush to cash out, and others assess at what price they are willing to jump in.
“For a stock like SpaceX, a lot of decision making might have been emotional and based on the anticipation of huge leaps forward in space exploration and utilisation, but investing should be something treated with clear eyes and patience, even when such huge numbers are involved.
Musk was also hit by a 5.8% drop in Tesla’s shares yesterday, as the tech sector was hit by a broad selloff in AI and semiconductor stocks.
The agenda
9am BST: IFO survey of Germany’s business climate
9am BST: IFO survey of Germany’s business climate
10am BST: House of Lords Financial Services Regulation Committee hearing on the consumer insurance market
10am BST: House of Lords Financial Services Regulation Committee hearing on the consumer insurance market
10:15am BST: Treasury Committee hearing on the Financial Services and Markets Bill
10:15am BST: Treasury Committee hearing on the Financial Services and Markets Bill
Noon BST: US mortgage approvals data
Noon BST: US mortgage approvals data
3pm BST: US new home sales data for May
3pm BST: US new home sales data for May
