00:00Sri, your reporting has found that Elon Musk is negotiating to cut down the fees that bankers
00:07normally get paid. What do bankers normally get paid and what does Elon Musk want to pay them?
00:11Look, if you think about it realistically, in some ways, SpaceX is the Walmart of IPOs, right?
00:16It has all the pricing power here. It is raising $75 billion. So you shouldn't expect
00:20a typical IPO fee. And to your question, what a typical IPO fee is, most IPOs generally tend to
00:26raise less than a billion dollars, a few hundred million dollars, and the banks would usually
00:30charge between four to seven percent. But even when we talk about the league of mega IPOs,
00:35that fee does get reduced drastically. But even in most of those cases, almost all of those cases
00:40are usually above one percent. That was the case with Facebook, Uber, Alibaba. You have to go back
00:46perhaps to 2020 and 2010 and a very unusual public listing of General Motors back in 2010 when the
00:53banks agreed to a 0.75 percent fee on that IPO, largely because the owner of GM at the time
01:00was the United States government. This is very different. But also look at the quantum of money
01:06that SpaceX is trying to raise, $75 billion. So even if they charge one of the lowest or offer one
01:13of the
01:13lowest IPO fees on record, less than 75 bips, less than 0.75 percent, that would still amount to
01:20somewhere in the ballpark of $500 million. And Paul will tell you that is a pretty good payday
01:25for banks. And this is how the roadshow is going to go. It's like, I just want to hear Elon.
01:30Give
01:31me the vision. Give me the pitch. I don't need the CFO. The $20 trillion total addressable market.
01:36I don't need to talk about valuation. None of that's relevant. It's the buy Elon's vision. And if I'm
01:43Elon, I'm like, what am I paying you that for? Paying you anything for that. So any pushback on the
01:48banks, buy the banks on this? Or are they just looking at the long game and saying, this is
01:52Elon Musk and there's a lot of business here? The latter, yes, yes, and yes. That is, I cannot
01:57imagine a scenario where the banks have a lot of position to push back. You already have 23 banks
02:02signed up for this. And again, $500 million. You're talking about the lead banks getting
02:06probably roughly $100 million a year. That's my guess. And it trickles down from there. But there's
02:11everyone who's anyone has signed up for this because you don't want to miss out on the biggest IPO
02:15that matters. Okay, 23 banks sign up for this. Why does SpaceX need 23 different banks to help
02:20it sell this IPO? Scour every corner of possible investors and make sure you can get to your 1.8,
02:26perhaps even the 2, $2.2 trillion valuation. Of course, our reporting shows that the bankers
02:30have been dialing it back on what the potential valuation could be for SpaceX. But all of these
02:36banks will serve a different purpose. You can see someone like Citigroup perhaps tap to go after
02:42retail investors overseas because of their strength in those markets. Or Bank of America
02:47looking at retail investors in the United States, Goldman Sachs, Morgan Stanley, JP Morgan. These are
02:52the banks that will be really strong with the big institutional investors. Investors like, say,
02:57BlackRock in the United States or the Saudi Sovereign Fund, PIF. These are some of the names that are
03:03already out there. But these are the names that these big banks have to arrange and make sure that
03:07they're able to line up. Because even if it's Elon Musk, and even if you believe in this
03:13multi-planetary grand vision, $75 billion is $75 billion on the back of the surprise stealth $80
03:22billion raised by Google. There's only so much money going around. So it's kind of extraordinary
03:26what's happening in this market. In a span of 10 days, if everything goes right, Goldman,
03:31Morgan Stanley and the others would have raised over $100 billion in new equity. I can't think of
03:37a quarter where they would have raised that much or even a six month. We haven't even gotten to
03:41Anthropic or OpenAI yet. We haven't. So you got to get ready. When are we going to get the roadshow
03:47schedule? Because I'm with that in my inbox. Because I'm the first person you're going to
03:50forward it to. When are we going to get that? You will be the first person I'll forward it to
03:54when I get it and when I have a better sense of it. Do we have any idea when that's
03:57going to be
03:57made available? Like, are they going to Boston? Are they going to London? Are they going to do a rubber
04:01chicken lunch here in New York? Do we know any of that stuff? I mean, imminent has to be the
04:05best answer
04:05considering they want to price it next week. They're playing a very close to the best.
04:10Or it could also mean that I just don't know. Could be. I don't know.
04:13Well, the timeline here that we've been reporting, according to our understanding,
04:17is pricing next Thursday? Correct.
04:19Okay. And always, always, always the stock then begins trading the following day?
04:23That's the goal. That's the hope. And usually that's what happens. And again,
04:26these things can move around a day or two. But when you're talking about 1.8 trillion,
04:30when you're talking about colonizing Mars, does the day here or there really matter?
04:33Yeah. It touches just 30 seconds on the Google. What's the buzz out there in the marketplace about
04:37the Google deal? And nobody expected that. What a surprise move. We've all been talking about the
04:42$75 billion raise, the largest public listing on record. And out of nowhere, Google comes across.
04:47And it's hard to compare the data because of the different tranches that are involved in this
04:51empty billion dollar that Google is raising. But if I had to stick my neck out, I would think that
04:56this is the largest equity raise ever. You have Berkshire as the anchor investor,
05:00a big chunk that gets priced today, another piece that gets priced in a few weeks.
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