00:00All about SpaceX and joining us live is Anthony Hughes. He's capital markets reporter at Bloomberg News.
00:05He rushed over here to help us break. I saw him running. I know to the studio. So thank you
00:10so much, Anthony.
00:11We got some more details, but there are things that we already know. I mean, SpaceX targets a 1.77
00:17trillion market value in the Nasdaq IPO.
00:20They seek to raise 75 billion dollars again in the biggest IPO ever. Anything that you're looking out for or
00:25that surprised you?
00:26Yeah, I think this filing really just confirms a lot of the reporting that's happened over recent days.
00:32And I think the really interesting thing that's happened in recent days is that the company has decided to go
00:41with a fixed offering price of $135 per share.
00:44And I think if you look at the previous iterations of the filing, I think they were considering a range,
00:49but it appears that they're now looking at a fixed price.
00:52And I think people will speculate or wonder why they're doing that, because for most IPOs in the US, certainly
01:00large IPOs, you generally go with a range and then gauge the amount of demand out there for the offering
01:08and then ideally price the offering at the high end of that range and potentially go above.
01:13But there's a lot of speculation today about why this is the case.
01:20Why would, I mean, let's just speculate for a moment, shall we?
01:24Why would a company, why would this be advantageous to SpaceX to do this, to say, look, this is the
01:29price?
01:30Well, I think one, you know, I think some of the comments today have been around the fact that there
01:35has been a lot of, you know, the word people use is price discovery in private markets.
01:39So, you know, you can see that there's a quoted price on secondary private markets for this stock, and this
01:45is not too far away from that.
01:47So, you know, it's possible that, you know, people have to take a view really on whether they think this
01:52is a very high price or a great bargain.
01:55And obviously there's going to be a range of views.
01:57A bargain at a $1.77 trillion valuation.
02:00Well, I just think that there's going to be, there's a view that a certain portion of the investment committee
02:07will back Elon and won't be too sensitive to valuation.
02:10I'm not saying it's a bargain, but I think it's more that people will generally back Elon Musk and they
02:15probably won't really necessarily, some people won't necessarily do a lot of analysis as to whether the valuation stacks up
02:21or not.
02:21But I think a lot of people think that, yeah, it is a very high, very large valuation and one
02:27that is not supported by the historical numbers.
02:31But I think...
02:32But it's a bet on Elon Musk at the end of the day, isn't it?
02:34And, yeah, well, I think the, even though the filing doesn't provide forward-looking numbers and financial forecasts, I think
02:41there is a lot of hints that they will be making significantly more revenue in the next few years.
02:47You know, just through, for instance, that deal that they've done with Anthropic where they'll be collecting, I think it's
02:51a billion dollars a month.
02:53For the compute that they're providing them, you know, that's one example of where you can see that there will
02:57be a quite material increase in the revenue of the company over the next year or so.
03:01And when people go and, people who do do the valuation work on this, we'll be looking at the companies,
03:07likely that it's been looking, and we're going to find out a bit more about this in the next few
03:10days, but we'll be looking to value this probably off like 27, 28, 29, maybe longer earnings.
03:17So people are going to, not earning, sorry, revenue.
03:19So they'll be looking out into the future.
03:21Are we even talking about, hey, SpaceX is going to be profitable at X, or do we care?
03:29Well, it's, I think the issue at the moment with a lot of the companies in the AI space, and
03:34obviously SpaceX is partly going to be a very, some people would say largely an AI story, is that I
03:41think there appears to be an expectation that there's going to be a lot of uncertainty and it could be
03:45quite volatile.
03:45And even though, for instance, I think Anthropic, they're talking about them going into profit in the current quarter, but
03:51I think even with that, people are talking a lot about there being a lot of ups and downs along
03:55the way.
03:56So, yeah, I mean, I think this will be valued off revenue, and so therefore revenue growth will be the
04:02thing that people will be initially looking at.
04:03But obviously, further out in the future, people will obviously love to see the company make some actual profit.
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