00:00Larry, let's start with SpaceX. Okay, they fired their, not fired, filed, excuse me,
00:04their prospectus. What was that process like? And what does the timeline look like for a company
00:11going public, especially a company that's this big? The process is pretty significant. They
00:17need to go talk with the SEC. They have to put out all of their S-1 and their information
00:23that
00:23goes back and forth with the SEC a number of times. And there are delays, like 30-day delays,
00:30and you updating something, them getting back to you. It's kind of a recursive process. It's kind
00:36of, you know, not easy. And it's gotten harder over time. And that's one of the challenges and
00:44why to a certain extent folks are challenged going public these days. Why has it gotten harder?
00:51Well, you know, in trying to do the right thing, I think we've raised the bar on companies going
00:57public to pretty much to a very large extent. You know, you look at Enron and Sarbanes-Oxley that
01:06came out of Enron. And now all of a sudden, if anything goes wrong in any of your companies,
01:11the CEO is directly responsible. There's a lot of disclosure issues. There are a number of issues
01:18around liability. So there are law firms basically buy a couple of shares of stock. And all you need
01:27is a 2,000 share holding to then file, start a class action lawsuit. And so if anything goes wrong
01:35with the IPO or anything goes wrong with any type of disclosure, you've got law firms jumping on the
01:42bandwagon to file lawsuits. And it just becomes very problematic for the company. And hopefully the
01:50SEC, well, the SEC does know this. And the chairman of the SEC, Paul Adkins, is trying to do his
01:56best
01:56to try to solve some of these issues. Yes, he hasn't been shy about saying he wants to ease this
02:00process along. You mentioned how recursive it can be. Make IPAs great again.
02:04That's make IPAs great again. I want to ask you how the exchanges are approaching this. So I saw the
02:09New York Stock Exchange kind of licking its wounds after all of this. But could you speak to the
02:13level of competition that's involved on the exchange size here? Obviously, each of the U.S. exchanges
02:19wants to get a piece of this here. They're fighting over these listings. What is the differentiating
02:24factor here? And I saw the New York Stock Exchange crying foul here that they think that maybe the
02:29NASDAQ got this in some sort of quasi-untoward way. The process is pretty competitive. And honestly,
02:37there's not a whole lot of difference between going public on New York or NASDAQ these days.
02:43You either want to align yourself with the 200-plus-year-old New York Stock Exchange or the
02:48more tech-modern NASDAQ and Times Square, both of which give you marketing dollars and kind of
02:58promotional benefits. That said, there is a new stock exchange that's cropping up in Texas,
03:04the Texas Stock Exchange, that's trying to actually do something to make it significantly
03:09different to go public. But they haven't even launched. And creating a new exchange is not the
03:16easiest thing in the world. But they're trying to play around with or they're working with the
03:20Texas legislature to change the rules to make it actually easier for companies to go public.
03:27I do want to ask you about the valuations of some of these IPOs. All right, you've got SpaceX
03:31valuation up to $2 trillion. And then coming on the back of that OpenAI, maybe eyeing a September
03:36IPO with a valuation of about $1 trillion. Someone was poking fun at this online and said, you know,
03:42that's worth more than all the land in Australia. Sure, it's fine. It's fine. Just keep buying it.
03:47Just keep buying it. Is there a concern that these valuations are not realistic?
03:53Yeah, I can't really talk to the extent of realistic or non-realistic, but they're awfully,
03:58awfully high. If you look at NVIDIA, which is now worth over $5 trillion, that went public at south of
04:04a billion. So who's making this money? You look at Apple went public for like less than $2 billion,
04:14Microsoft less than a billion. These are multi-trillion dollar companies now.
04:20And, you know, who's, you know, and general investors and, you know, people with pensions
04:28and people with money and, you know, the SPY and S&P 500 funds all have profited in the gain
04:34of these
04:35shares. Whereas now all of a sudden you've got SpaceX looking at $2 trillion IPO. Who, you know,
04:43I'm sure there are individuals that have some stock, but not a whole lot. It's mostly Elon,
04:48the employees, some early investors. They certainly haven't been the majority of individuals.
04:54And the other, you know, if you look at the, you know, the companies that have gone public at the
05:00top, you know, the companies that, you know, the companies worth a trillion dollars, most of which
05:04have gone public for under $100 billion. Most of them have gone public for, you know, for under $10
05:11billion. And all that return has gone to you and I and folks with, you know, 401ks and IRAs.
05:20And now all of a sudden, you know, if all of a sudden now SpaceX, you know, there's no way
05:27that
05:27SpaceX can make the same kind of return as NVIDIA or Google because they'd have to swallow the GDP of
05:35the globe just to get there.
05:38Larry, thank you very much. Larry Tab giving us that intro, that preview of what's to come here in
05:43terms of these IPOs. And I did see this note from Michael Hart at Bank of America wondering about the
05:47prospect of these mega valuations here, that's going to change the makeup of the S&P 500 further
05:50the concentration that we've seen.
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