00:00Yes. Well, really, there's a lot of steps along the way to going public. And for a company like SpaceX,
00:04which has been around for quite a long time, it's been a long road. But this is really the most
00:08definitive step, you could argue, for SpaceX in terms of going public, because it means that they've gone, they're serious
00:14in the sense that they've filed a hefty document with the SEC. We don't get to see it yet. Hopefully,
00:20we might hear about some of the things that are in it.
00:22But this really suggests that the deal is going full steam ahead. And I think all the body language we've
00:29seen in recent, even in just the last two or three days, we've seen a number of stories about different
00:33things that are happening around the deal. And it's really sort of indicated that it's full steam ahead. And everyone's
00:39pretty confident they can get this done actually by June. Now, June is a few months away. So a lot
00:45of things, different things can happen. We're in a world where different things can change.
00:48So, you know, it's worth being a little bit wary about how easy it's going to be to achieve this.
00:54But it's, you know, it's a monster deal. And it's somewhat unprecedented in many aspects of this deal. So you
01:01have to take that into account.
01:03And the company is considering a dual class share structure in the IPO that would potentially give insiders such as
01:09Elon Musk extra voting power to dominate decision making Bloomberg News has reported.
01:15Is that something that they're going to go to the regulators and get some feedback on? Because we've seen other
01:19media companies, tech companies have this dual class stock.
01:24Yeah. So that would be very prominent in the document. It will be mentioned on the cover of the document,
01:29likely.
01:29That would be something that would be not unexpected in this situation, especially when you have an IPO, which is
01:35going to be very hotly sought by investors.
01:39You tend to find that founders of tech companies that are large and fast growing do have the ability to
01:46dictate such terms.
01:48And that's been my experience. It's not uncommon.
01:50It's not something that corporate governance purists love, because it means that if things go wrong, investors may not get
01:58to have a huge say in any changes that they would like to see.
02:03But it's not not surprising that that's something that would happen.
02:06And for Elon, it might if Elon Musk, it might allow him to consolidate his empire somewhat.
02:13I'm just looking at Tesla.
02:14D.E.S. screen for Tesla does not have a dual class.
02:17Yeah. So maybe he learned from the first time.
02:19And of course, it's not unusual for founders to launch an IPO like this.
02:23Meta has this dual class structure as well.
02:25And it's fittingly that we're getting this confidential IPO on the day that NASA is set to launch astronauts to
02:31the moon for the first time in 50 years.
02:34Anthony, one thing that we do know about SpaceX is that it acquired XAI, which is Elon Musk's AI startup,
02:41you know, earlier this year.
02:42What does that have to do with this IPO?
02:45Why was that kind of a necessary step towards this IPO?
02:48Well, I think people have different theories on that.
02:51I think it probably makes sense for the funding needs of that business to bring it into SpaceX.
02:57I think some people felt that that wasn't great for – it's made the business not as attractive as a
03:05whole.
03:05But, you know, at the end of the day, I think people are backing Elon Musk because of his track
03:09record.
03:10I mean, it's interesting you mentioned Tesla.
03:12I mean, it's just extraordinary that if we go back to 2010 when Tesla went public, it was – I
03:18think it was a few hundred million dollar IPO of a company worth a couple of billion dollars.
03:22I mean, we're talking about such larger numbers now.
03:24But, you know, I think XAI is – you know, we're going to see some numbers there.
03:29I mean, from all reports, it's been burning cash.
03:31So it's not adding to the profitability of the overall business.
03:34So that is a concern.
03:36But I think because, you know, we're also expected to see possibly Anthropic and OpenAI go public this year, I
03:44mean, there is an arms race for growing the AI aspects, you know, growing these businesses.
03:50And, you know, I think SpaceX is going to be part of that.
03:53And, you know, that obviously adds a growth element to the business as well.
03:56But it does probably make the financials not look as good in the short term.
04:00But getting there first.
04:01Yeah, exactly right.
04:02And there's been reporting that Elon may be considering kind of rolling up all his stuff.
04:08You know, SpaceX may be acquiring Tesla, for example.
04:11X, yeah.
04:13I mean, he's already done that.
04:14I mean, what do we know about that?
04:15Has Elon said anything about that?
04:17Well, I think there's a lot of speculation about that.
04:19But I think what we're seeing here is that SpaceX is going to go public before that happens, most likely.
04:25I think, you know, there could be a change of plans.
04:27You never know.
04:27But it does seem to be – there could be some industrial logic in Elon Musk having all of his
04:34businesses in one listed entity.
04:36But, you know, it may be for different reasons because of the way these businesses are developing and the value
04:42–
04:42you know, obviously, you know, most companies looking to go public are always trying to maximise valuation and make sure
04:47they can have access to capital.
04:49I mean, the thing about these businesses being so large is they have almost – I mean, for all the
04:54ups and downs of Tesla over the years, Elon Musk has demonstrated he has unlimited access to capital.
04:59And this business is going to have a good access to capital, which is going to allow them to do
05:03many things.
05:04Yeah.
05:04That's the benefit of size and scale.
05:06I know that you always look at the banks that get signed on to do this.
05:10SpaceX has lined up Bank of America, Citigroup, Goldman Sachs, JP Morgan, and Morgan Stanley.
05:14Basically, the five biggest bulk bracket firms.
05:16The big five, and they're going to have dozens and dozens of banks around the world helping them sell this
05:21thing.
05:22All I know is if I'm buying SpaceX – I'm thinking that the shareholder basis is going to be a
05:26big overlap.
05:27The people who kind of are in the Elon camp, they already own Tesla.
05:30My sense is they're going to be a very high crossover there between Tesla and SpaceX.
05:35So at some point down the road, particularly if he has voting, super voting shares, he might be able to
05:39put the companies together.
05:41Yeah, I think it's a reasonable theory.
05:44What's next here?
05:45So when do we actually get to see some of the numbers, do you think?
05:49Well, so typically what happens is the filing will become public.
05:52Typically, there'll be a strategic decision about when that is.
05:56But if it's the case that the IPO is on track to actually – the stock's actually on track to
06:01debut perhaps in late June, which is get in before the summer.
06:06Why file confidentially then?
06:08Why not just make it public?
06:09Well, because confidentiality was originally – when it was first – that SEC created the ability for companies to file
06:18confidentially.
06:18It was really for small companies to help small companies go public.
06:21But over time, it was extended to every company.
06:24So it was just something that was available to all companies.
06:26So it's something you would use.
06:28But, yeah, in this case, you know, it doesn't matter that much in this situation because basically what will happen
06:35is SpaceX will now be able to go out and start meeting investors.
06:40And they'll be able to use information in that filing when they're talking to investors, still in a confidential way
06:45that's not really, you know, public.
06:47But the filing of the document will allow SpaceX to say lots of things to investors that they wouldn't otherwise
06:53be able to say.
06:53That's our understanding of the legal position there.
06:56And so, you know, it's really – they'll be doing a lot of testing the waters meetings.
07:00You know, the meetings are supposedly starting next week.
07:03And so, you know, it's really full steam ahead here.
07:05Wow, okay.
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