00:00We want to talk about this IPO. We're waiting for SpaceX to file this prospectus, which could happen any day
00:05now.
00:06Before we get there, though, I want to get your perspective on what we saw over the course of the
00:09last week.
00:09This has been a market that has been, I don't want to say complacent as this war has unfolded,
00:13but it does seem like there were doubts sown among investors here at the end of the week,
00:17and it was a nasty Friday, to say the least.
00:20No, it was a nasty Friday, and David, you know this as well as anyone.
00:24If you are an investor, one thing you hate is uncertainty, and the other thing is being long stocks or
00:29risk assets.
00:30Over a weekend, where pretty much it's anyone's guess what the next 36 hours will look like.
00:35And so when you really look at the price action that we saw on Friday in particular,
00:38it did seem like people either were adding up on bearish hedges or really dumping anything that was particularly risky,
00:44just given we don't know what the weekend will bring.
00:47And really, when you lay that across the entire month that was March, we've had a lot of volatility.
00:53To your point, you talk to bullish investors.
00:56Well, hey, we're only down 5%, 6%, 7%, depending on the index that you look at.
01:00That's not that bad, all things considered.
01:02And every potential headline that a resolution is on the horizon typically brings at least a knee-jerk reaction.
01:08But when I talk to folks on Wall Street, there still is this resounding hope that the problems will be
01:15addressed,
01:15and the war will be ended sooner than later, and then business can get back to usual.
01:20There aren't many people thinking about what happens if this drags on for another four or five weeks.
01:25So with all that in the backdrop, why do this now?
01:28Why does SpaceX want to do this now?
01:30And is this a fait accompli?
01:31Are they definitely doing it soon, or might they wait, given all this volatility?
01:36So the thing with IPOs are they can be long, drawn-out processes.
01:39With SpaceX, every detail is closely watched.
01:42So what we're waiting for is a confidential filing,
01:44which would formally kick off the potential IPO path.
01:49The big thing to keep in mind is that SpaceX has kind of been vocal,
01:52at least through various media reports, that they want to go public in June.
01:56And if you think back two, two and a half months ago, the market backdrop was quite different.
02:00So when you look at the timeframe for SpaceX to go public,
02:03we could be in a very different market by the time it actually gets kind of on the launch pad
02:08and potentially goes public versus where we are now,
02:11where submitting this document to the SEC just makes it easier to market the deal
02:16more formally to investors as opposed to setting any type of shot clock, if you will.
02:22Wait, I have a logistics question.
02:23For you guys who've covered IPOs before, which I have not on this level,
02:26do you have to constantly, is it like a DOJ filing?
02:29Do you have to constantly refresh the page waiting for that to pop up?
02:32Or do you know that they've posted it and you know you can go get it?
02:36So with the JOBS Act, they opened up confidential filings.
02:39So technically, they could submit and no one knows.
02:41So this could be something that they announced via press release.
02:44This could be something that us and competitors find from our sourcing and report out.
02:48Or we were joking with a few bankers.
02:50In theory, we are understanding this is not the case.
02:53In theory, they could have submitted this a month ago and were able to keep it tight-lipped
02:56and no one actually knows.
02:57Like, this is the one aspect of that filing.
03:00And the big thing is you file the submission, you submit the filing confidentially,
03:04then you wait a month to go back and forth with the SEC from there.
03:08And that's kind of why this March time frame was so critical for Elon to potentially meet
03:12his goal of going public by his birthday, which is the end of June.
03:16I've got to give you props for using the IPO on the launch pad pun there,
03:20which I'm sure was deliberate, Bailey.
03:23I want to ask you about what this company is kind of picking up off of that.
03:26I think there are a lot of people who think of SpaceX as a company that makes
03:29and shoots off rockets into space.
03:31It has grown to such more than that over the last many years.
03:35This is a company that now owns XAI, which is Elon Musk's AI company, which is hemorrhaging money
03:40as it tries to, like, build up and build new data centers.
03:44Starlink, of course, has been bringing money in.
03:45It owns that, too.
03:46And then what was formerly known as Twitter, X is now part of XAI, so part of this whole
03:50conglomerate as well.
03:51How does that complicate the way that investors are looking at this company as an investment,
03:56the fact that it really is this very multifaceted conglomerate?
03:59To your point, when you think back to February before the merger of parent company XAI,
04:04which owns X, and SpaceX, SpaceX was arguably one of the cleanest stories in the private market.
04:10It was essentially a space monopoly that owns launch, getting rockets and satellites into space,
04:16and to your point, owning Starlink, which is the dominant player in potentially getting
04:21or actually actively getting direct-to-consumer, direct-to-cell phone and other devices,
04:28internet connection.
04:29Now, with this merger, when I talk to investors, the pitch still is heavily predicated on the
04:35kind of old-school SpaceX company.
04:38With XAI being a part of that, the one thing to keep in mind is if you talk to many
04:42people
04:42and if you polled, I would say, the smartest people on Wall Street and ask,
04:45well, what is Tesla?
04:46Is it a car company?
04:48Is it a robot company?
04:49Is it something that's going to be partnering with SpaceX for TeraFab?
04:53It's just the entire Elon ecosystem, that Elon premium, that these companies are very complex,
04:59and there are a lot of areas to look at that can justify higher valuations.
05:03I'm glad you bring up Tesla, and I think about the history of that company
05:06and how Elon Musk really valued the true believers among those investors who stood with him,
05:11even as Tesla wasn't able to make as many cars as it said it would as deadlines got pushed.
05:15And Elon Musk has a real affection for the retail investor.
05:20I'm curious how SpaceX is going to benefit or serve those investors going forward.
05:25Do we have any sense of sort of how they will be able to take advantage of this IPO when,
05:29in fact, it happens?
05:29So we put out the reporting that they could allocate about 30% to 35% of the IPO for
05:36retail investors.
05:37One thing to keep in mind, if the company does raise its targeted $75 billion,
05:41it's about $22.5 billion for retail, which would be the third largest IPO in the history of IPOs.
05:48So that's an insane amount of money to just comprehend that could be allocated to retail.
05:52And to your point, the boardroom and these bankers are discussing the best way to allocate shares
05:57to the true believers, people who have held Tesla for a long time.
06:00Maybe people who own Tesla cars will be able to get better access at the IPO.
06:05At the end of the day, when we talk to bankers, finding $75 billion of demand,
06:09there's enough capital out there.
06:11But being able to execute the IPO in a way that delivers for both the company and investors
06:17is going to be closely watched.
06:18Bailey, we've got about 30 seconds left.
06:20But how much of this is trying to get ahead of Anthropic?
06:23And what does this mean for OpenAI and Anthropic?
06:27Yeah, it's a bit of a race.
06:29And SpaceX clearly has set the best timeline or the quickest timeline to circle that June target.
06:34We reported that Anthropic could go as soon as October.
06:37And OpenAI, from our understanding, is kind of neck and neck, potentially,
06:41with trying to line up those prospects to go public.
06:43So when we think about 2026 as a whole, we could see all three of these companies.
06:48Or if the volatility continues, we could see one or two drag on into 2027.
06:53All right.
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