Nike CEO John Donahoe Abruptly Retires After Struggling Sales

Summary

On this episode of Morning Brew Daily, hosts Neal Freyman and Toby Howell discuss a range of topics including the remarkable achievement of Los Angeles Dodgers' Shohei Ohtani, who became the first player to hit 50 home runs and steal 50 bases in a single season. They also delve into Nike's recent struggles and the departure of its CEO, John Donahoe, exploring the potential for the company to bounce back under new leadership. Additionally, the hosts touch on the challenges faced by 23andMe after its independent directors resigned, and the implications for the company's future. The show wraps up with a discussion on SpaceX's Starlink satellites, which are causing interference for astronomers, and the unique case of US gymnast Jordan Chiles, who is fighting to reclaim her bronze medal with the help of a Netflix documentary.

Takeaways

• 🏅 Los Angeles Dodgers' Shohei Ohtani made history by being the first player to achieve 50 home runs and 50 stolen bases in a single season.
• 📈 Ohtani's record-breaking performance could potentially make the Dodgers' $700 million contract with him seem like an underpayment.
• 🤝 The Dodgers' victory and Ohtani's performance are expected to bring excitement to the postseason games.
• 🎾 Nike is undergoing a significant change with the retirement of its CEO, John Donahoe, which might be a step towards regaining its market edge.
• 👟 Nike's shift in strategy under Donahoe, focusing on direct-to-consumer sales and cloud infrastructure, led to a decline in the brand's cool factor and strained relationships with key wholesalers.
• 📉 Nike's stock reacted positively to the CEO change, increasing by 10% after hours, indicating market optimism for the company's future.
• 🧬 DNA testing company 23andMe is facing a crisis with the mass resignation of its board members and a significant drop in company value.
• 🚀 SpaceX's Starlink satellites are causing concern among astronomers due to their interference with radio astronomy and the bright streaks they create, potentially hindering the observation of the universe.
• ✈️ United Airlines has partnered with Starlink to offer free Wi-Fi on their flights, showcasing the dual-edged sword of satellite technology.
• 🏋️‍♀️ US gymnast Jordan Chiles is fighting to reclaim her bronze medal with the help of evidence from a Netflix documentary, which could set a precedent for using documentary footage in legal disputes.

Q & A

What significant achievement did Los Angeles Dodgers' Shohei Ohtani accomplish?

Shohei Ohtani became the first player ever to record 50 home runs and 50 stolen bases in a single season.

How much was the record-setting contract signed by Ohtani with the Dodgers worth?

The Dodgers signed Ohtani to a record-setting $700 million contract.

What does the business term 'DTC' stand for as mentioned in the context of Nike's strategy?

DTC stands for 'Direct to Consumer', which refers to selling products directly to consumers without using traditional retail channels.

Why did Nike's strategy under John Donahoe's leadership become problematic for the brand?

Nike's strategy under Donahoe became problematic because it prioritized online and DTC sales over wholesale, flooding the market with older models, which over time reduced their 'cool' factor and hurt long-term relationships with key wholesalers.

What was the immediate impact on Nike's stock price after John Donahoe announced his retirement?

Nike's stock jumped 10% after hours following the announcement of John Donahoe's retirement.

What is the core issue with 23andMe's business model as discussed in the script?

The core issue with 23andMe's business model is that their DNA testing service, which is their main product, is something customers only need to do once and it rarely provides compelling results that would justify ongoing subscription services.

What is the current financial situation of 23andMe as described in the transcript?

23andMe is valued at less than 200 million, down from over 6 billion three years ago, and it has enough cash to last only 12 more months.

What is the controversy surrounding Jordan Chiles' bronze medal at the Paris Olympics?

Jordan Chiles was initially awarded a bronze medal in the floor exercise, but it was later stripped after Romanian officials claimed the coach's inquiry did not come within the required one-minute time limit after the score posted.

How is Netflix involved in helping Jordan Chiles reclaim her bronze medal?

Netflix is involved because a production company filming a documentary on Chiles happened to capture evidence that shows her coach made the inquiry within the required time limit.

What is the potential precedent that the Jordan Chiles case could set for future sports disputes?

The case could set a precedent for using footage from documentaries that haven't been released to the public as evidence in sports disputes.

What is the potential impact of SpaceX's Starlink on astronomy as discussed in the script?

The Starlink satellites are found to have interference that is much stronger than previous models, potentially obstructing astronomers' views of the sky and interfering with radio astronomy, which could dampen our understanding of the universe.

Outlines

00:00

🏅 Ohtani's Record-Breaking Season and Netflix's Role in Chiles' Appeal

The paragraph discusses the remarkable achievements of Los Angeles Dodgers' Shohei Ohtani, who became the first player to record 50 home runs and 50 stolen bases in a single season. The Dodgers' signing of Ohtani to a $700 million contract is highlighted, suggesting it might have been an underpayment given his performance. Additionally, the narrative shifts to discuss a Netflix documentary that could aid gymnast Jordan Chiles in her quest to reclaim a bronze medal from the Paris Olympics, which was initially awarded then stripped from her due to a timing dispute over an inquiry by her coach.

05:03

👟 Nike's CEO Transition and Market Response

This section delves into the departure of Nike's CEO, John Donahoe, and the potential implications for the company. It outlines the criticisms against Donahoe's strategy, which focused on digital transformation at the expense of product 'coolness' and retailer relationships. The appointment of Elliot Hill, a 30-year Nike veteran, as the new CEO is presented as a strategic move to restore the company's mojo. The discussion also touches on the market's positive reaction to the leadership change, as reflected in Nike's stock price increase following the announcement.

10:04

🧬 23andMe's Corporate Crisis and Strategic Shifts

The paragraph outlines the corporate turmoil at 23andMe, including a mass resignation of board members and the company's plummeting valuation. It discusses the CEO's plan to take the company private, which the board viewed as not credible, and the strategic missteps that have left the company searching for a viable business model. The narrative also touches on the company's pivot from DNA testing to drug development and telehealth services, and the challenges it faces in a saturated market with a one-time use product.

15:05

🍽️ Olive Garden's Delivery Partnership and Trump Media's Market Struggles

This segment covers Olive Garden's new delivery partnership with Uber, marking a shift from its previous resistance to third-party delivery services. The decision is contextualized by the company's recent sales drop and the broader challenges faced by the casual dining sector. Additionally, the paragraph discusses the struggles of Trump Media and Technology Group, the owner of Truth Social, as insider lockup periods expire, allowing major shareholders, including former President Trump, to sell their stakes, which could further depress the company's stock price.

20:05

🚀 Starlink's Impact on Astronomy and United Airlines' Wi-Fi Deal

The paragraph addresses the concerns raised by astronomers over the interference caused by SpaceX's Starlink satellites, which are impeding the observation of celestial bodies. The discussion highlights the potential long-term impact on our understanding of the universe due to the proliferation of satellites. On a contrasting note, it also mentions United Airlines' deal with Starlink to provide free Wi-Fi on their flights, underscoring the dual-edged impact of such technology on innovation and scientific research.

25:07

🤸‍♀️ Jordan Chiles' Olympic Medal Appeal and Documentary Evidence

The final paragraph returns to the story of gymnast Jordan Chiles and her fight to reclaim an Olympic bronze medal. It details how a Netflix documentary crew's footage could provide crucial evidence supporting her coach's timely inquiry during the competition, contradicting the initial ruling by the Court of Arbitration for Sport. The narrative speculates on the potential legal and precedential implications of using documentary footage in sports arbitration and the emotional significance of the medal for Chiles.

Keywords

💡Netflix documentary

A Netflix documentary refers to a non-fiction film or series produced by Netflix, often focusing on real-life events, people, or issues. In the context of the video, a Netflix documentary is pivotal as it provides crucial evidence for gymnast Jordan Chiles in her quest to reclaim her bronze medal. The documentary, filmed by Religion of Sport, captured the exact moment of Chiles' coach's inquiry, which is central to the controversy surrounding the medal's rightful ownership.

💡Olympic gymnast Jordan Chiles

Jordan Chiles is an American artistic gymnast who has competed in international competitions, including the Olympics. The video discusses her struggle to reclaim a bronze medal that was initially awarded to her but later stripped away due to a dispute over the timing of her coach's inquiry. Chiles' case exemplifies the high-stakes nature of sports competitions and the impact of administrative decisions on athletes' careers.

💡Bronze medal

In the context of the Olympics, a bronze medal is awarded to the athlete who finishes in third place in an event. The video script revolves around the controversy of Jordan Chiles being initially awarded and then stripped of her bronze medal in the floor exercise at the Paris Olympics. The medal symbolizes not only her achievement but also the central point of contention in the legal and ethical dispute that unfolds.

💡Court of Arbitration for Sport

The Court of Arbitration for Sport (CAS) is an international arbitration body that resolves disputes related to sport. In the video, the CAS initially ruled against Jordan Chiles, siding with Romanian officials who claimed the coach's inquiry was out of time. This ruling sparked further controversy and led Chiles to appeal to a higher court, highlighting the role of CAS in sports governance and dispute resolution.

💡Starlink

Starlink is a satellite internet constellation being developed by SpaceX, providing global internet coverage. The video mentions Starlink in the context of its impact on astronomy, as the satellites' brightness and radio signals interfere with astronomers' ability to observe the universe. This part of the script discusses the balance between technological innovation and its potential consequences on scientific research.

💡Astronomers

Astronomers are scientists who study celestial objects, phenomena, and the universe. The video script discusses the concerns of astronomers regarding the interference caused by Starlink satellites, which can outshine faint celestial objects and disrupt radio astronomy. This keyword is central to the discussion on the environmental impact of technology on scientific observation and research.

💡Shohei Ohtani

Shohei Ohtani is a Japanese professional baseball player who plays for the Los Angeles Dodgers. The video script celebrates Ohtani's record-breaking achievement of being the first player to record 50 home runs and 50 stolen bases in a single season. This keyword is used to illustrate exceptional performance in sports and the business implications of such achievements, as it mentions the Dodgers' contract with Ohtani.

💡Nike CEO

The CEO of Nike is a key executive role responsible for the company's overall management and strategic direction. The video discusses the departure of Nike's CEO, John Donahoe, and the potential impact on the company's future. This keyword is significant as it ties into broader themes of corporate leadership, brand management, and the challenges faced by companies in maintaining market relevance.

💡23andMe

23andMe is a personal genomics company known for its DNA testing services. The video script touches on the company's financial struggles and internal conflicts, including the mass resignation of its board members. This keyword is relevant to discussions about the challenges faced by startups, the importance of strategic direction, and the implications of leadership decisions on a company's survival.

💡Trump Media and Technology Group

Trump Media and Technology Group is the parent company of the social media platform Truth Social. The video script discusses the company's financial performance and the potential for its stock value to be influenced by the actions of its major shareholder, former President Trump. This keyword is used to explore the intersection of business, technology, and politics, as well as the influence of high-profile individuals on market dynamics.

Highlights

Los Angeles Dodgers' Shohei Ohtani becomes the first player to record 50 home runs and 50 stolen bases in a single season.

Ohtani's performance is compared to Berkshire Hathaway reaching a $1 trillion valuation and raising another $1 trillion in the same year.

The Dodgers signed Ohtani to a record-setting $700 million contract, which might have been an underpayment considering his performance.

Nike's CEO, John Donahoe, announces plans to retire amidst the company's struggles with market share and customer retention.

Bloomberg's piece 'The Man Who Made Nike Uncool' criticizes Donahoe's strategy and its impact on Nike's brand.

Elliot Hill, a 30-year veteran at Nike, is set to replace Donahoe as CEO, signaling a potential shift in company strategy.

23andMe faces a crisis as seven of its independent directors quit the board, and the company's value plummets to just 3% of its peak valuation.

23andMe's CEO, Anne Wojcicki, plans to take the company private, but the board disputes the credibility of her offer.

Olive Garden's parent company, Darden Restaurants, partners with Uber for a two-year delivery deal to boost sales.

Trump Media and Technology Group faces a moment of truth as the lockup period for insiders expires, allowing them to sell their stakes.

Astronomers express concern over SpaceX's Starlink satellites interfering with radio astronomy and observations of the 'invisible universe'.

United Airlines signs a deal with Starlink to provide free Wi-Fi on their airplanes.

US gymnast Jordan Chiles fights to reclaim her bronze medal with the help of evidence from a Netflix documentary.

The Netflix documentary footage could potentially change the outcome of Chiles' appeal and set a precedent for using documentary evidence in sports disputes.

Transcripts

Good morning brew daily show I'm Neal Freyman and I'm Toby Howell.

Today, how Netflix could help Olympic gymnast Jordan Chiles get her

bronze medal.

Back then Nike is losing its CEO, but

it could be exactly what it needs to get back to winning ways.

It's Friday, September 20th.

Let's ride.

What a night in Major League Baseball.

Los Angeles Dodgers superstar Shohei Ohtani became the first player ever

to record 50 home runs and 50 stolen bases in a single season.

No other player has posted more than 42 homers and 42 steals.

The milestone was part of a mind boggling six for six three homer, two steal,

ten RBI game for Ohtani that amounted to one of the greatest performances

in sports history.

So be ahead of this season.

The Dodgers signed Ohtani to a record setting

$700 million contract they might have underpaid.

Now I am trying to put this into business terms and honestly, I got nothing.

It's like Warren Buffett's Berkshire Hathaway reaching a $1 trillion valuation,

but then him also founding another company in the same year that also raises

$1 trillion. It truly is mind boggling.

The only thing I can do

simultaneously at a high level is rub my tummy and pat my head.

And even that, I'm not saying, oh, you're doing well.

The best thing for baseball fans here is that Ohtani had been on a pretty

bad team for the early part of his career, and last night the Dodgers won.

They won by a ton of runs, and he's going to be in the postseason

for the first time.

So we all get to watch him in the playoffs and compete in some

actually intense games and that we hadn't seen before.

So kudos to Ohtani.

Just a remarkable player.

And we're excited to watch you in the playoffs.

Now let's take a moment to hear from our sponsor Why's Business the app

for doing things in other currencies.

You know, we're a little removed from the Olympics, but it got me thinking

about the logistics of running such a massive event across multiple countries,

which also got me thinking about running a business across

borders, payments flying everywhere, multiple currencies involved.

Some say that running a business across borders is harder than competing

in the Olympics.

Well, no.

But why is it makes it easier than it should be?

Whether you're paying suppliers

or getting paid by clients in different currencies wise makes it simple.

No hidden fees, no inflated exchange rates, just fast, transparent

international payments.

You need to get over the Olympics by the way, Tobi, we're onto football season.

Don't you ever compare the Olympics to football, ever?

I like that, all right, all right.

If you want to take control

of your international finances, head to wise.com/business.

That's wise.com/business for a company named after the Greek goddess of victory.

Nike has sure done a lot of losing recently.

It's been losing market share,

losing customers and as of yesterday, it just lost its CEO.

John Donahoe.

Nike's beleaguered chief

executive, is on the outs, announcing plans to retire yesterday.

But that might be exactly what the company needs to turn things around.

Bloomberg published a piece titled The Man Who Made Nike Uncool

that dug into where Nike went wrong under Donahoe in recent quarters.

The core issues was that Donahoe came from a consulting background,

choosing to optimize server side infrastructure and cloud storage

elasticity, as Bloomberg put it, with little knowledge

about what makes Nike shoes cool

and led to decisions that seemed to make sense at the time,

like flooding the market with older and popular models, or the choice

to prioritize its online and DTC sales over wholesale.

Both worked in the short term, but hurt them in the long term.

Those older models became less cool over time.

In decades old relationships with key wholesalers fell to the wayside.

But now Donahoe rain is coming to an end with an insider,

Elliot Hill, who had a 30 year career at Nike, taking his place.

But Neal, what went wrong under Donahoe?

I mean, when you say retire, you got to put that

this was this was put being pushed out

because the last couple of years at Nike have been a total disaster.

It started with this June earnings report, where they posted sales

of just 1% and forecasted lower guidance for the year that sent its stock crashing

20% in a single day, which was its worst day in stock market history.

A lot went wrong for Donahoe, but it started out really well.

It's kind of mass. The overall problems.

He grew revenue 25% over the first couple of years during the pandemic.

That push to direct, customers from retailers

toward the online Nike store was working really well.

The online biz jumped from 30% to 44% over four years, from 2019 to 2023,

and then 2023 came, 2024 came and it just all fell apart.

People started shopping in stores again.

The competition from Hoka in on completely

obliterated them in the Athletic running space.

And, it was just the writing on the wall after that June earnings

report that the pressure mounted on Donahoe, the

it felt like there was a mutiny within Nike's workforce as well.

And it was just a matter of time before he had to step aside.

It was almost

he was a victim of circumstances because Donahoe was brought in to kind of

bring that consultant mentality to modernize Nike's business.

Nike thought it was too reliant on its just brick and mortar wholesale partners.

So they're like, come on, Donahoe.

Like you spent some time at eBay, you spent some time at Bain.

And you, you are this E-com wizard.

Let's juice our direct to consumer sales.

And he did that.

But I think he just got too high on his own supply where he would release

these really popular older models like the

the thing that was emblematic is he these Nike Panda dunks,

which were these black and white pair of, of dunks, Nike shoes.

And for a while they were the hottest things in the street.

Everyone was wearing them.

So what Nike did was just kept releasing them on its app, kept pushing

it, and people were buying them and everyone loved it.

But then over time, it just inherently becomes less cool.

And ever you just flood a market with supply.

So I think you just misunderstood sneaker culture at its core.

And that led to just this overreliance on these heritage

names, these heritage brands within Nike's portfolio and not enough innovation.

And by going back to Hill,

who was a longtime Nike vet, he started there as an intern.

I think Nike realizes

that they have sort of a cult going on there in Beaverton, Oregon,

and they shouldn't tap an outsider to lead the company anymore because,

Donahoe was the only the second outsider to ever lead Nike.

He knew nothing about sneakers, and it was a kind of a total disaster.

So I think they're just saying, man, we've produced some really good talent

management talent within our ranks.

Let's just keep it within the family.

And I think one of his major, one of his major,

initiatives right now is to repair relationships with retailers.

Donahoe obliterated relationships with footlocker, DSW,

Macy's, all of these places where you could typically find Nike shoes.

He took them out.

And who filled the space? But Crocs?

Oh, yeah. I mean, Crocs is doing well.

Crocs, hookahs ons, Adidas, Puma, all these other brands filled the space

and Nike just wasn't there where customers were.

And I'm only I'm thinking back to when Starbucks CEO left because what happened

then the stock jumped a ton and Nike's CEO just stepped down.

The stock jumped 10% after hours yesterday.

So you you never like to see that when you leave a company.

And then their stock goes up.

It does matter too, because Starbucks brought in this kind of consultant

minded person with a background in consulting. Right?

Then replace them with a with an industry insider.

Same things happening at Nike here. And we're seeing the market react.

Paul, are you do you think Nike can turn it around

I think they have the brand they still got.

They still got the brand and they just need to innovate a little bit more.

I'd love to see a little bit more innovation come in,

especially how they're running into five things. It's so easy.

You can just like yeah, go some innovation. That's all you need.

but yeah, I think they have what it takes to turn it around.

Okay.

23 and me just became 16 and me, after all, seven of its independent

directors quit the board on Tuesday, plunging the DNA testing company further

into crisis, valued at more than $6 billion three years ago,

the once hot Silicon Valley startup is now worth just 3% of that

less than 200 million, and it's fighting to survive past next year.

The mass resignations from the board stemmed from a disagreement over 23

and me's future.

Earlier this year, CEO and junkie hatched a plan to take the company

private herself by buying out the 51% of remaining shares she doesn't control.

But the board, in an unusually harsh resignation letter, said

this wasn't a serious offer.

They said.

We just didn't present a credible proposal with financing sources

and they haven't seen any movement in the past five months.

That leads them to believe a more credible offer is coming.

Big picture they said they disagree with what Jessica,

about the strategic direction of the company,

the drama only escalated from there when risky told employees

she was surprised and disappointed by the board's mass resignation, while

emphasizing her commitment to taking her company private.

But time is running out.

23 in Me has enough cash to last it just 12 more months,

while its 33 cent stock price could soon get delisted from the Nasdaq.

I mean, you said it's like 16 to me now.

It's almost just me at this point because and is the really the only one left.

It is just this awkward relationship

because at most company a CEO works for the board of directors.

Board of directors works for shareholders, shareholders in 23 times case

which is a CEO, but she's also a controlling shareholder.

She owned 49% of the company.

So technically the board of directors works for her even as she works for them.

So it created a lot of this just inherent tension as a result.

So who is in the right here?

It's hard to know because who knows what.

And vision for the company is it has shifted a lot in recent years.

Remember it 23rd May used to just be like a place

where you could see your genetic lineage and trace your genetic history.

See, you're like where grandpa was from.

But then they try to turn it into much more of a health care

juggernaut, leveraging that their big pool of genetic data to develop drugs.

But that went to the wayside.

Now they're tossing out ideas like selling GLP one class of drugs.

So they're searching for something here

because they never quite nailed the business.

They're throwing spaghetti at the wall and seeing what the silhouette sticks.

You're right.

They try to drug development because they have a trove of DNA data.

But drug development is so expensive.

You try all of these early stage trials and out of 50 maybe two will hit.

But that takes ten years and it's very, very capital intensive.

So last month they shut down this drug development

operation and said, no, actually we're going into GLP ones.

And they bought this company

lemonade, a telehealth service, and they're saying, we're going to ship

you GLP one drugs like Lego V, Ozempic, etc., through this telehealth service.

But it doesn't seem when the board said we don't see at the same

strategic direction, it doesn't seem like there is a strategic direction

for 23 and me and their core service, which is this DNA testing thing

you only need to do once, and it's not really a compelling result

outside of cocktail conversations, because it rarely gives you life

changing medical information. Right?

There's only a few amount of people

that do have this life changing diseases lurking in their genetic code.

So how can you really sell a subscription service once you know your genes?

Like they're not really changing over time that much.

So it was tough.

This used to be a very buzzy, very hot start up,

and now it is down a literally 99.9% from its from its, previous high.

I told you, I asked you if Nike could turn around 23 and me.

No I'm not.

I'm usually a bullish person, but I'm not going on record.

that 23 me you can turn it around.

Well, it's been a minute but stock of the week.

Dog of the week is finally back because Jerome Powell cut rates.

There was a veritable buffet of options to choose from.

But since I beat Neil in the pre-show My Little Pony naming contest,

I got first dibs.

So my stock of the week is Olive garden owner Darden Restaurants.

Its stock jumped around 8% yesterday after it announced

an exclusive two year delivery partnership with Uber to ferry

its delicious selections of breadsticks and pasta to your doorstep.

It is a major shift from Olive garden's usual approach to livery

because for a long time, third party

delivery companies like Uber were not allowed in its Garden of Eden.

While other chains embraced delivery, Olive garden shunned

it, saying it led to slim margins and poor guest experience.

But there's nothing like a 1.1% drop in same store

sales this quarter, along with missed profit expectations.

To change your mind now, Olive garden is relying on Uber's logistics

network to be its knight in Shining Alfredo and offer

an on demand delivery to turn things around.

Ooh, nothing sounds more appetizing than ordering Alfredo delivery.

This entire sector is in the dumps right now.

I mean, people this summer did not go to fast casual chains.

They weren't going to Olive garden.

They weren't going to Applebee's. They were doing other stuff.

They were spending their money elsewhere.

Same store traffic for the entire sector was down 4.5% this year.

For casual dining restaurants,

that's even worse than the entire restaurant industry's drop of 3.3%.

You mentioned that, Darden, its parent, had a drop in one, a 1% drop.

Olive garden saw a lot fewer people, too.

So they're just trying something new.

Every other restaurant

has virtually partnered with UberEats or a third party delivery service.

So they said, hey, why not?

We think people will order online, for delivery and pay that set.

They said the average, delivery fee, what is going to be $7?

But they're like, okay, if you're ordering for your family,

maybe you'll pay those $7 for the convenience.

So they're just trying something new to try to turn around sales

that are slumping right now.

It did remind me of another story

you might remember us talking about on this podcast,

which was when Domino's struck a similar deal with Uber Eats.

Domino's was similarly similarly protective of its brand.

It had that pizza tracking app,

so it didn't want to hand control over to a third party like Uber.

But then times got tough. Sales fell.

So you open up the business a little bit, let people within your own walled garden

to try to just get people back, ordering your food.

They are also bringing back it's never ending possible.

Later this month, I'm having shades of, like, Red lobster.

I exactly I know they aren't.

They are saying they're not selling themselves. Right.

I hope they're not Red lobster themselves.

But again, this is like their version of the pumpkin spice latte.

I feel like like, just offer something up to get people back in the door

and never ending possible.

It does sound quite compelling, I might add.

Now Neil's got a dog of the week coming up next.

Our dog of the week is Trump Media and Technology Group,

the owner of the social media platform Truth Social,

which is down bad and now faces a moment of truth.

Yesterday, after the market close,

the lockup period for truth, social insiders expired, meaning

former President Trump and other major shareholders can sell their stakes.

They were blocked from doing so for six months after the company

went public via Spac, which is common for these type of deals.

You don't want

major investors heading for the exits right after a company goes public.

Now that Trump is cleared to sell

his shares, he is faced with a nearly $2 billion question.

He owns 57% of the company's outstanding stock, worth $1.8 billion.

So that's some paper money he could convert to cash.

It's a lot.

It's about half of his overall net worth.

But last week, Trump told reporters that he wouldn't sell his shares

and that he was sticking with his social media company, Ride or Die.

Recently, it's been more of the latter.

The stock that bears Trump's initials, DJT, has fallen nearly

9% this week to a record low and is down 78% from its March peak.

Trump selling any of his shares could drive that price down even more.

We just have to acknowledge what a contender

this business is because it has a market cap of over

$3 billion, but the underlying business is about the size

of just a family business, and a modest one at that, too.

Trump media generated revenue of $836,000 in the second quarter of 2024.

It has lost around $344 million on revenue of less than 2 million

in the first half of the year.

So there's nothing here to really justify its valuation

other than the fact that it's bears Trump's name.

The fundamentals of the stock, if you can call it that, is Trump's

words and Trump's attitude and his chances of winning the election.

So this is why this is such a big moment, is he needs to say like I'm not selling

or else

there is nothing else supporting the valuation

other than just like his belief in the brand.

But this is so much money and he has bills to pay,

so it would be surprising if he didn't try to take some of it off the table.

There is an option where you don't have to sell the stock.

You could potentially borrow against it, put it as collateral

to take out a loan, so put it to work for you.

So that is one sort of one.

Be option after selling it.

But you have to disclose that.

And if you don't you get in a little bit of trouble.

Last month Carl Icahn got fined by the SEC $1.5 million.

There's a big fine for this particular infraction

because he pledged vast amounts of his shares in his companies

to secure personal loans, did not disclose that with the SEC

and then they slapped him with a pretty big fine.

So either way, whether Trump sells any of his stock

or he pledges his shares as collateral to get some of that money,

like out of Trump media Group, which you said

is not a successful business besides its lofty share price.

We'll know about it because he has to file

these disclosures with the SEC within two days of making these things,

because he is, making these actions because he owns 57% of the company.

And if you own more than 10%, anytime you do something big,

you have to, file a disclosure and let the public know,

you see that with Warren Buffett all the time, right?

He can't do anything in secret here.

When you look up into the night sky, you might see a shooting star.

Even the big Dipper, if you have a, keen eye.

But if you're an astronomer looking skyward, something is obstructing

your view.

Thousands upon thousands of satellites

right now, the bane of astronomers existence is one particular satellite.

SpaceX is second generation Starlink.

The newest Starlink model was found to have interference 32 times stronger

than the first generation model, according to an international team of astronomers,

which really puts a damper on attempts to observe the so-called

invisible universe stuff like black holes or faint dying stars.

Astronomers rely on radio astronomy to detect faint

radio signals emitted by celestial bodies.

But Space X's mega

constellation of internet beaming satellites is blinding their instruments.

You know, as the amount of satellites in orbit

grows, so too does the difficulty of looking out into space.

And there are lots of satellites out there.

Now, I mean, the scientists in this paper called it a threat to the entirety

of ground based astronomy in every wavelength and in different ways.

There's a fear soon that space observation might begin to look like

a windshield of bugs, according to one scientist.

So they are very fearful that the proliferation of satellites

so we can get to the numbers in just a sack because they are astonishing,

will forever dampen our understanding of the universe.

And they you know,

this was my first I was like, okay, well, Starlink does some cool stuff.

Maybe we, find ways to get around that.

And they were like, no, no, this isn't just science for science sake.

We're not just doing science fair projects in eighth grade.

Like this is very critical

to our understanding of how the solar system works

and could have a very big long term implications.

So take this seriously.

And they're trying to work with SpaceX to figure out a way.

So they're not getting blocked with all of this radiation coming.

Right.

And there's two ways that they're actually being affected

by, Starlink and satellites in general.

One is that they are just bright.

They, they say this streaks that, satellites leave when they reflect

the sunlight are around 10 million times brighter than the faintest light

sources that astronomers study.

So these things are reflecting the sun and blinding their instruments.

But then also, I'd said

they use they they use radio astronomy to pick up on radio signals.

So the electromagnetic signals that these satellites are emitting

are also blinding. That sort of astronomy as well.

So they are just the windshield of bugs is just an apt metaphor.

They can't see out there.

They can't see the objects that they can't see the aliens trying to talk to it.

Right.

Maybe they've been trying to get through,

or we just have all these bugs in the way.

But you're right.

There are over 7000 Starlink satellites in orbit.

They have the capacity to launch 200 satellites per month.

At this point, SpaceX does. There's plans to,

launch 12,000,

deploy 12,000 more satellites, possibly up to 34,000 at some point.

There are projections that soon by 2030,

there could be 100,000 satellites in low-Earth orbit.

So a lot of bugs coming at our SpaceX windshield.

Meanwhile, United Airlines just signed a deal

with Starlink to bring free Wi-Fi to their airplanes.

so that is it, for lack of a better word.

Cool.

It is an incredible product, like it is bringing internet from the space.

So again, with all of these things, you have to balance like

the need for innovation with like the need to protect and, you know,

utilize space for other experiments, like you were saying.

Yeah, I mean, Starlink now will be in 2500 planes offering free Wi-Fi.

I like free Wi-Fi.

Okay, here is a I also like, I like I also like astronomy.

For for what it's worth.

Finally, here's a pretty crazy story to send you out on this Friday.

US gymnast Jordan Chiles, who is fighting to reclaim her

bronze medal that was eventually removed at the Paris Olympics, is getting

some help from a Netflix documentary.

Back at the competition in August, Chiles was given,

then stripped of a bronze medal in the floor exercise,

which would have been the UCLA gymnast first individual Olympic medal.

What happened in

the arena has caused major controversy in the gymnastics community.

Chiles originally landed in fifth place, but her coach, Cecile Landi,

made an inquiry with the judges

to boost her score, which they accepted and awarded Chiles the bronze.

But days later, Romanian officials said that the coaches inquiry

did not come within the required one minute time limit after the score posted,

and that their gymnasts should place above Chiles.

The Court of Arbitration for sport sided with Romania

and gave Chiles his bronze medal to a Romanian gymnast instead.

Chiles and her coach have not given up the fight, and this week

they filed an appeal with new evidence from a Netflix documentary.

Turns out, production company Religion of Sport was in the arena

that day, filming a docu series on Chiles as teammate none other than Simone Biles

and their cameras got everything on tape, including proof that shows

Chiles as coach making the inquiry within the one minute time limit.

Tell me, did Netflix provide the smoking gun in the case

I mean, there are so many parts of this that are just insane from the fact

that you have only exactly one minute to file an inquiry to the fact

that there just happened to be a Netflix crew

of filming here, not just filming, but had special access to film in the arena.

They had three different cameras and they had audio from Landy the coach.

So you can literally triangulate the point to the second

that she actually verbally expressed that they wanted to file an inquiry.

And you can you can hear very clearly at 49 seconds.

She comes over and says, inquiry for Jordan.

She also repeats it another time before the 62nd deadline.

So a lot of people are looking at this and saying, hey, court of the case,

this court of this arbitration court saying

you guys did not consider this evidence.

You really should like it

and says it clearly, but they are trying to say that, no,

we made our ruling so we cannot accept this video evidence.

But this is absolutely the smoking gun in this case.

Yeah.

And Chiles is going above the Court of Arbitration for sport.

They're going to the Federal Supreme Court of Switzerland.

So it's kind of like

let's say the Jets got angry about Deflategate with the Patriots.

And instead of taking it up with the NFL,

they're literally going to Congress or the Supreme Court to to manage

to figure out, what's going on here or to settle their dispute.

But it is it is interesting

and to to ponder whether this could create a precedent

for documentaries that have not yet been released to the public,

but are recording a lot of things.

We know there have been so many documentaries

that Netflix has commissioned out in various sports leagues F1,

tennis, golf, all these other sports, and they're collecting so much footage,

they're making up everyone.

So they might have information to settle disputes,

for, you know, for, for movies that haven't been released yet.

So we'll see.

I mean, maybe, like, you know.

Yeah, let's go back to the NFL.

All these coaches are miked up.

Maybe they call the timeout before a field goal is kicked

and they have to settle this dispute, and we'll see whether

maybe this will set a precedent,

whether these types of content can be used in in a court of law.

It is interesting too, though, because the way

you think about documentaries is that they are a proof of record.

They are documenting something that happened in the past, and then here

it is, trying to change an outcome of something that is happening

technically in the future of this outcome.

Well, so it is just throwing time and space into a different sort of,

kind of continuum here.

This appeal could take months, though.

There's not going to be

a quick resolution here if it does wind up being successful.

It is huge for trial.

She has come out and said like that was really hard for me, like getting

feeling like I lost, getting the medal, then getting it taken away again,

she says. Like is part of my identity. I've been stripped away.

So you do hope that it does

seem like the right thing here is that they filed the inquiry on time.

Hopefully, she is rewarded with the medal that she earned.

Yeah, I think it's fair to say we want her to get that medal.

I mean, we do.

Okay. That is all the time we have.

Thanks so much for starting your morning with us.

And have a wonderful Friday and an even better weekend

for any feedback, questions or comments on the show,

send an email to Morning Brew Daily at Morning Broadcom.

And don't forget to share Morning Brew Daily

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If you need some inspo Toby has you covered.

I want you to share today's pod with someone named Henry because today,

September 20th, just so happens to be my brother Henry's birthday.

So, in honor of my Henry, share it with a Henry in your love.

That. Happy birthday, Henry. Let's roll the credits.

Emily Milligan is our executive producer.

Raymond Lu is our producer.

Olivia Graham is our associate producer.

You know what is our technical director?

Billy Menino is on audio hair and makeup is ordering breadsticks for delivery.

Devin Emery is our chief content officer.

And our show is a production of Morning Brew.

Great show today, Neil. I wish you all well.