00:00Can you detail for us some of the governance concerns that you have?
00:05Well, first of all, let me say that I think, you know, SpaceAce is a fantastic technology company and what
00:10they achieved is truly remarkable.
00:13And it's really a very interesting IPO for many aspects.
00:21But it's also a very risky endeavor there.
00:24And I think, you know, over the coming years, many things can and will go wrong.
00:30And in that setting, you know, governance structure may seem, good governance standards may seem unnecessary when the company is
00:39performing well.
00:40But it becomes critically important in adverse scenarios.
00:43And that's why we really place significant emphasis on governance along with valuation strategy and financial performance and so on
00:51when we evaluate companies.
00:53And in this case, we simply feel that governance standards are too weak considering the risk picture that we're looking
00:59at.
01:01So, of course, the sort of control that Elon Musk has over the company and the sort of, you know,
01:06infinity sort of structure that he has placed there to have control of the company is something that you've detailed
01:11as a concern.
01:12It's something others have detailed as a concern.
01:14But, of course, many of the people that are buying SpaceX are buying it just exactly for that Elon Musk
01:18factor.
01:19And you've seen that represented in the market.
01:21You know, some would argue that no company could have done this unless it was run by Elon Musk because,
01:26of course, no one has.
01:27What do you say to those investors who are so excited about it, who have not been dissuaded at all
01:31by the concerns you're highlighting?
01:34Well, I think you're absolutely right.
01:36I think what's really driving this devaluation is very much the combination of Mr. Moscow's personal brand and also the
01:45extraordinary achievements of SpaceX.
01:47And then add to that probably a certain degree of fear of missing out among retail investors.
01:53And so that's also what makes this company so very difficult to put a price on because it's not only
02:00are there this enormous risk around the revenue, a margin, a future capital requirements,
02:04but you also have to see your understanding multiple through the lens of the Musk brain and even AI also
02:12adds to that.
02:13So it's truly difficult to put a price on this on SpaceX, I believe.
02:20But our assessment is that the IPO price that's on the table is very, very far away from what we
02:29can actually come up with when we do some of our parts on the license.
02:34Yeah, and so for you, we know $1.8 trillion is obviously too rich a valuation for you.
02:38What do you think is a more reasonable valuation?
02:40Admittedly, there are all these issues about black box and maybe not fully understood, but what for you would be
02:45a comfortable price for getting the governance concerns to buy SpaceX at?
02:51Well, in a case like this, we do the same as we always do.
02:55We do our own internal analysis, so we try to do some of the parts analysis and come up with
03:01our own opinion about future revenues and margins and what have you.
03:07And for us, it's simply hard to get above $1 trillion, I have to say.
03:11And we might be too conservative.
03:14I certainly hope so, because a lot of investors around the world will be piling into this.
03:17There's a lot of retail investors will be piling into this.
03:20So I hope I'm wrong.
03:21I hope they have success.
03:22But for us, I mean, the conclusion was pretty clear.
03:25This is not something for us to participate in.
03:28The price is too high, and that implies obvious financial risk.
03:32The governance standards are too weak.
03:34That further amplifies the financial risk.
03:37So, yeah, we won't need to be participating.
03:41And I'm thinking about a sort of chief investment officer who's looking at SpaceX, but also looking at what SpaceX
03:48tells us about the market more broadly.
03:51There's a sensation, I think, for many people that in many ways, not just on SpaceX, but on many of
03:55these companies, it's really a FOMO-driven rally.
03:58People don't want to lose out on this sort of technology that is incredibly hard to price.
04:02Does that bring up concerns for you in terms of market stability?
04:05It's something I bring up with government officials, ECB governing council members.
04:08This is a market that seems entirely unshockable.
04:11There are a lot of ingredients of instability.
04:13Is it something that you are concerned about, that you get a very sharp repricing with very large consequences?
04:22I think that risk is definitely on the table in the case of SpaceX.
04:26I think it's on the table in regard to tech valuations in general.
04:31Our view is that there is a certain amount of hype there, but we also think that this would probably
04:38continue for quite a while.
04:40I think, you know, some people make parallels to the dot-com area 20 years ago.
04:45And I think if you use that parallel, we probably think that we are in the early days of 1998
04:50yet.
04:51So things can get pretty much more extreme, I think.
