00:00Bailey was just talking about the test the waters meetings. And one of the things we've tried to
00:04report on in some detail over a number of years, it's not new, is the revenues break down at
00:10SpaceX, right? There was a point where it went from mostly launch to mostly Starlink. What I'm
00:15seeing and hearing right now is Starlink at the top end tracking to maybe $20 billion of revenues
00:19this year, you know, if they exceed. How do you price an IPO on that data?
00:26It's the perfect question. And thanks for having me here. First of all, all the numbers we've seen
00:32so far are leaked numbers or rumored numbers or through the grapevine. Until they flip that
00:38document public, we aren't really going to know what any of the numbers are. And then until they
00:43go out, as you just heard, and meet with investors and to test the waters, we're not going to know
00:47what the bank's expectations are for 2027, 2028. I presume they'll go out much further.
00:54But none of the numbers that are being bandied about in any way fundamentally correlate to a
01:02trillion dollar or a trillion and a half dollar or a $2 trillion valuation. It's all hope. It's all
01:12do we believe the vision? It's all do we believe that they will have limited competition, which
01:19we know there's more coming. So it's a leap of faith. And there's going to be a lot of FOMO
01:26here.
01:27And the best way to look at how to value it is to go way back to 1934, where you
01:33look at Graham and
01:34Dodd, who wrote the book on fundamental securities valuations. And they had a great comment that was
01:40applicable during the internet phase. And it's applicable now. And it's,
01:44hey, look, there are times I'm paraphrasing, but there are times when there are new fields of
01:49endeavor, new companies in areas we've never seen before. And investors can, in fact, make a lot of
01:55money if they are involved early enough. But everybody needs to understand it is not a fundamental
02:02investment. It is a bet. It is a speculative bet. And that's what money at these valuations will be
02:10going into SpaceX. You roll the dice. Right. And you say, you know, Starlink's pretty cool.
02:16Really? You think, Lisa, this is rolling a dice situation? That's certainly not going to be being
02:21discussed with banks talking to investors today. There is no math that correlates the current
02:27revenues to two trillion dollars. None. So, yes, it's a bet on the future. And it's a
02:35compelling and potentially fascinating and enormous and also very uncertain future.
02:40Lisa, typically before a big IPO of a late stage startup, they would raise a big round,
02:47right? Largely to bring in the crossover investors. In this case, SpaceX merged with XAI,
02:53which changed the valuation dynamic, brought debt onto the balance sheet, et cetera.
02:57What was your assessment of that transaction pre-IPO? Typical Musk, I would say. I think, again,
03:07until we know what the math looks like, it's very hard to make any sort of a sound assessment. It's
03:15clearly bundling things together. And heaven knows he's done pretty astonishing things in the past that
03:20have worked out and some that haven't. And so it's we don't yet know. And again, I've not been on
03:26the
03:26test the waters meetings. Maybe they're explaining that. Maybe they're explaining this. But how the
03:31two are going to interact such that one and one equal eight. Does this have read across to any of
03:37the others in the pipeline, Lisa? Or is this very much your view on Elon Musk and this bet on
03:41SpaceX?
03:42Because there's also a bet on XAI and we have plenty of other AI companies potentially waiting in the wings.
03:47So from a general sense, when you have a very large IPO, and we've never seen one like this before,
03:53but we've had Alibaba, we've had Facebook, we've had other big, we had Saudi Aramco, although kind
03:59of a very different industry. When you have a big IPO that goes well, as Alibaba did, usually a number
04:07of the companies in the wings put the foot on the gas and say, we're going to take advantage of
04:11the
04:11fact that investors are feeling good about IPOs and you see much more activity. When you see a larger
04:16IPO that stumbles out of the gate, as Facebook did, people and companies go back into hibernation for
04:23a while. So this could be the opening of the door that certainly bankers would love to see. But we
04:29have to see how it plays.
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