00:00We are getting some big IPOs coming towards the tech world at substantial size.
00:07Do we have the capacity to absorb all of these big numbers?
00:11The answer is yes. There's still plenty of cash sloshing about in the system
00:16and a lot of cash looking for a home.
00:17The big question is whether or not that cash is willing to pay the valuations being asked.
00:23The order is very important when it comes to these giant IPOs.
00:27You want to be first because that's the one where there's going to be the most demand.
00:30I do think some of these business models are going to struggle.
00:33I think the hard part for investors is to figure out which one is actually going to thrive.
00:37There probably is enough capital out there to fund it,
00:40but I think we're certainly going to have a good negotiation period
00:42on how much people are actually willing to pay for those.
00:45It's an historic moment for these IPOs, these blockbuster IPOs.
00:48How are those clients saying that they plan to fund that exposure to those IPOs?
00:54The way we think about it is probably technical in the nature
00:57rather than changing fundamentally what is happening in the market.
01:00I think it's a very important point to make because there is a lot of concern in the market
01:05to what it actually means for the market's stability.
01:07We don't think that it creates instability.
01:10We actually think that there is enough capacity in the market to absorb that.
01:13What I think is interesting about the IPOs is that they're being designed in some ways
01:18to encourage retail participation with higher allocations
01:24and with relatively small free floats compared to enormous market caps.
01:30A lot of the incremental improvement in profit of the big mega cap tax
01:35is the increase in share value of their investments in these other...
01:38In each other.
01:39In this like, you know, Amazon's profits get boosted by the fact
01:42that its anthropic share goes up X percent.
01:44And that means that when there's a problem, this is just going to be so bad
01:48because, you know, after the GFC...
01:50There is going to be a problem, right, at some point?
01:51There's definitely going to be a problem at some point.
01:52SpaceX has put projected valuations up at such a level
01:55everybody else has to come up to try.
01:57They're getting a boost because...
01:59This is ironically a gravitational effect for a space...
02:01Yeah, exactly. Investors are going to say, show me the money.
02:04OK, I put money into you at these exorbitant forward valuations.
02:08I now want to see something on the table in terms of your revenues and your profits.
02:12If there's a mismatch for too long, people are going to say, we don't like...
02:15And SpaceX is a big enough one for people to short.
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