00:00The hype around this IPO is extraordinary.
00:02It's done everything slightly differently.
00:04Like, we know the price that they're aiming for.
00:06Even though there's so-called technical pricing tomorrow,
00:09it's going to be $135, we understand.
00:11Of course, it's going to be raising up to $1.8 trillion of market valuation
00:14and $75 billion of new equity.
00:17But this is going to be 30% allocated to the retail community.
00:21They're still going to be able to get allocations tomorrow.
00:25What's interesting is, of course, depending who you get allocation through,
00:27is how quickly you're allowed to flip it.
00:29Now, a lot of these retail offerings, if you go and buy it through Fidelity,
00:33they're going to punish you if you try and sell it on the day.
00:35So you're going to be, like, contained for 15 days.
00:37But there's a lot of volatility that's going to go into this.
00:39And many think that the price is going to be pushed higher by the amount of passive funds.
00:43They're going to rush in to buy SpaceX because there's been this fast tracking of entry
00:47into a lot of the main indices, like the Nasdaq, for example, of SpaceX shares.
00:52And so suddenly, if you're a passive fund and you need allocation,
00:54there's going to be this sort of fuel and frenzy behind it.
00:57But all of this is to say that demand is clear.
01:00$250 billion worth is what's been reported by Reuters.
01:04And we understand from our sources that that is similar in terms of level of demand.
01:08Some big fund managers are coming in asking for up to $10 billion worth of SpaceX shares
01:14because, of course, they've got so many funds they've got to distribute it within.
01:17And then you're looking at which particular areas, geographically, the Middle Eastern investors
01:23who have been very long in the AI trade, very much piling into ex-AI, open AI, anthropic.
01:28Well, we know the Kuwaiti Investment Fund has been asking for about $5 billion worth.
01:33We know that there's been big demand coming from the other players as well.
01:36So clearly, the hype cycle's there.
01:39I mean, we've just got two more days to white-knuckle this.
01:42Yeah, like Prince Alawid, Bin Talal, he was one of the early backers of Elon Musk.
01:46He's going to get a big payday, it looks like, right?
01:49Yeah, and it's going to be interesting as to whether people hold on to their allocation,
01:52whether it's paper money, whether they want to sell more broadly in the future.
01:56And look, this is why there was that great reporting yesterday, wasn't there,
01:59showing the truest data that if you look back at the 30 biggest tech IPOs in the last 15 years,
02:04generally, a majority of them will sink in their first 12 months of trade.
02:08That's because lockups expire, CEOs and people want to be able to make some profits,
02:14liquidity wanted from some of the people that work at these companies.
02:18So there is some sort of pressure.
02:19But more broadly, this looks as though a lot of people are going to be not only holding it
02:23in their private funds, but maybe wanting to even buy it in their public funds too.
02:27Maybe you want even more skin in the game.
02:28All right, I'm going to put on my analyst hat here.
02:31Valuation.
02:32Bloomberg Television had a great graphic they ran yesterday.
02:35Just looking at it, IPOs, big tech IPOs, multiples of revenue, 15 here, 20 times there.
02:42Crazy stuff we never talked about back in the day.
02:44This one, SpaceX, 95 times revenue.
02:49It's kind of like Tesla, right?
02:50Yeah.
02:51What could possibly go wrong?
02:53Is there any pushback we've heard from the marketplace from some of these meetings on valuation?
02:57I haven't really seen any.
02:59I think it's all about whether you believe in, A, the cult of Elon Musk, whether you believe in the
03:03idea of getting orbital data centers.
03:05They've started to at least show demonstrations, pictures, if you like, of how that might work.
03:12So that's been a key focus.
03:14But really, in the same way that Tesla does not trade on fundamentals of electric vehicles, nor does SpaceX,
03:20it's bigger than the sum of its parts when you're putting all the business together, because it is the idea
03:23of Mars.
03:24It is the idea of the moon.
03:26It is the idea, though, that this currently is almost a monopoly.
03:30Look, who else has been making these reusable rockets, the cadence and the reliability that we've seen with the Falcon
03:359,
03:36now with Starship managing to demonstrate such feats of science?
03:40I think for many, it's just like, well, I've been burnt if I've been against him in the past.
03:45But there has been some pushback, particularly New York and California pension funds.
03:50And the concern there by the controllers seems to be Elon has too much control.
03:57Governance.
03:57And in fact, funnily enough, shock horror, who's weighed into this as well, is Elizabeth Warren.
04:03Is sending a last minute ditch attempt to the SEC, Paul Atkins, saying, look, you've got to stop this IPO
04:09process.
04:10Because I'm worried about governance and I'm worried about the safety of retail investors.
04:14As you are seeing the fast tracking of shares going into some of these big indices.
04:18Look, whether you like it or not, you're probably going to have exposure to SpaceX because it's going to be
04:21in your 401k.
04:22It's going to be in some of these, as you say, the funds that are managed by New York City,
04:26by New York State, they're pension funds, right?
04:28And they're saying, look, we're not so averse to this that we're going to rule out them in our funds.
04:33But we are going to keep trying to chew Elon's ear, trying to get letters to him, which he thus
04:38far hasn't responded to, saying, we're worried about this.
04:42We're worried about your 80% voting rights.
04:43We're worried about the overall governance structure of the business.
04:48But look, like for many investors, they want a founder mindset.
04:52They want the ability of Elon Musk to be able to drive forward with the big decisions.
04:56And for many long-term bettors on him in the private markets, they kind of love that.
05:00In fact, that's why they think eventually SpaceX and Tesla should merge.
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