00:00I think that the space business, the lift business, really supporting that satellite constellation Starlink,
00:06which is all about communications between the Earth's surface and low Earth orbit.
00:10I think that's interesting, but it's not, I think, a huge value proposition, right?
00:16You're trying to, you'll be competing with terrestrial providers that I think can do much better in populated centers.
00:22So I think the big, big, big sort of opportunity here would be if data centers are going to work
00:29in space and AI is a big thing in the world,
00:33you're going to be able to, from the surface of the Earth, shoot your data requests into space and data
00:38centers in space will work out all those things you need to know via AI and get it back to
00:43you.
00:43I think you're betting on that in the long run if you're buying into this, into the SpaceX IPO.
00:49George, we talk about how your title is Aerospace Defense and Airlines Analyst.
00:54What kind of company is SpaceX now?
00:56What is the comparable company?
00:59What group should it be considered a peer to?
01:02Yeah, so, I mean, when we built our valuation and thought about what was potentially, you know, plausible given current
01:12markets,
01:12we really had to do with some of the parts, right?
01:14So I went out and looked at the rocket business against those peers like Rocket Lab.
01:19My colleagues, John Butler, went out and looked at Starlink based on some peers as well.
01:25And then Mandeep Singh did it based on AI.
01:29The biggest value that actually came out of Rocket Lab, sorry, came out of the rocket business,
01:33which is a little bit surprising to me, but I still think sort of the, you know,
01:37the long-term play here is the data center in space and AI.
01:43But we had to combine, again, analysis in all those industries to really come up with what we thought
01:49maybe a plausible valuation, albeit extremely lofty valuation, would be.
01:54Is there an expectation, George, that Elon may look to just kind of consolidate all of his holdings within SpaceX,
02:04i.e. roll up Tesla into SpaceX?
02:06Is that something that when you talk to investors that they think is possible, likely?
02:11I hear noise like that.
02:13I mean, look, I think, you know, when I look at the current SpaceX,
02:17I see the reason to put these three companies together.
02:20Again, sort of the launch business gets your satellite constellations up in the air.
02:26He's got the largest satellite constellation.
02:28Starlink by far is the largest of any satellite constellation in low-Earth orbit.
02:33So the launch business gets those satellites up there.
02:36It serves Starlink.
02:37And then, again, as AI comes in, if you're going to put the data centers in space,
02:43you've got to drive down the cost of getting things into orbit.
02:46And, again, your launch business matters, and you obviously need communications to get to it.
02:51So I see how all three of those fit together.
02:54I don't see how Tesla fits inside that mold.
02:58Now, look, I think all three of these are together because AI needs a fair amount of financing right now.
03:06We're seeing that all around the marketplace, right?
03:08AI companies are looking to raise funds, to build data centers, build out their models,
03:13make sure they're super competitive.
03:15So, look, I think Elon could do – you could see him do things for financing reasons
03:23that may not make sense from, you know, a company-level reason.
03:27Again, right now I see the reason these three are together because they seem to be supporting each other.
03:31So, George, when SpaceX is a publicly traded company listed on the NASDAQ under the ticker SPCX
03:37and it needs more money to fund its AI build-out, how is it going to get that money?
03:42Is it going to sell more stock?
03:43Is it going to go to the debt market?
03:45What are you thinking?
03:46Well, I mean, right now they're not selling all the stock.
03:50You know, they're not listing sort of the full value of this company on the exchanges.
03:57But – so my sense is they probably could sell more stock to raise money.
04:03And then I think it just, you know, it opens up the ability to go into public markets
04:08and take public debt and sort of, I guess, maybe get out of the venture capital world a little bit.
04:16But, look, I mean, I guess we'll see.
04:19It still seems like a really hard – it's not a company that you're going to bank, right?
04:23The major banks of the world aren't going to show up and say, we'd like to finance you.
04:28The metrics just aren't there for that.
04:30Some very speculative, you know, bond investors could potentially get involved.
04:34It still feels like largely, you know, an equity fundraising kind of story to me.
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