00:00We've heard from a lot of skeptics already this morning. Let's get to the constructive view.
00:03How do you justify this valuation? Right. Well, it'll be an expensive stock in the near term,
00:09but our numbers have it looking pretty decent on 2029, 2030 EV multiples. So, you know, it's going
00:17to be a tough ride, a rocky ride to get there. And it can be uncomfortable to value a company
00:23so far into the future, especially in this space. But if it hits those numbers, I mean,
00:27this stock could even look cheap. Well, Matt, let's focus on revenue, how much money they're
00:31making at the moment, what growth has looked like over the last few years and the numbers you're
00:35thinking about in the forward years next year, the year after that. How much growth are we going to
00:39see in revenue? Right. I mean, we only saw, what, 15 percent revenue growth in the first quarter.
00:44But this is not going public off of its most recent quarter. It's going public off of what it can
00:50do
00:50in the next few years. And we're expecting it to more than triple revenue in the next two years.
00:56That would give us more confidence in this valuation. And how can it do that? Well,
01:00a lot of it's already underway with that Google and Anthropic deal. And then, you know, if they
01:04can get Starship underway, if they can continue growing in the connectivity Starlink space,
01:09I think they can get there. Key question, Matt, where exactly is the revenue going to be coming
01:14from? Does it matter? Does it matter if it's mostly a neocloud story or if it's a mostly a
01:19Starlink story that does propel the earnings higher? Most of the revenue is going to come from
01:25the AI side, likely. At the same time, Starship v4 is really going to be that keystone to the
01:32company's plans with connectivity drawing the most EBITDA in the near term as well.
01:38So on the top line, I think AI. But you really can't discount the other two pillars here, too.
01:44How much more different is it to try to value some of the companies that are
01:48IPO-ing right now versus, say, five years ago?
01:52Yeah, I mean, it used to be easy. You could just look at any software company and then the 10
01:57closest comps. This feels like new territory. Like I said, we're not comfortable. We're not
02:02usually going out to 2029, 2030 numbers, but you kind of have to. This feels almost more like a
02:08trillion-dollar venture investment. And I expect the same will be true of Anthropic and OpenAI.
02:13Matt, what do you do when it comes to total addressable market? The TAM of this company,
02:17when you start thinking about going to outer space and there's not much competition, just sounds
02:23insane. Some of the numbers I've heard over the last few weeks just sound almost made up, Matt.
02:27Where do the numbers come from?
02:30I'll be honest. We always discount the TAM pretty heavily. We see very inflated TAMs and prospectuses.
02:37So we kind of take that 20-plus trillion TAM. We kind of set it aside and look at what
02:44the company's
02:44been able to do and where we think it can go. We kind of disregarded that at 20 trillion-plus
02:50enterprise AI. But I think there's no question AI infrastructure is huge and growing. The potential
02:57for the Starlink is already very established and growing very fast.
03:01Matt, can I ask you, we were talking about growth, and clearly the IPO is not priced off
03:04the training gears, obviously. We're talking about the hope of the future. But Matt, I am interested
03:09in the growth levels coming into this listing. Why aren't we seeing aggressive growth? And
03:14why is it going to change quickly in just the next two years?
03:18Yeah, I mean, I think the launch business has really been focused on bringing those satellites
03:24into space, helping the connectivity, the Starlink business out. And then on the AI side,
03:29that's mostly been plowing money into CapEx. And now it's finally at that inflection point.
03:35And, you know, those deals with Google and Anthropic have given us confidence. The fact
03:39that Google is also raising billions of dollars to build out its own data centers and other
03:44companies, I think they're in the right space. I think a case could be made that, you know,
03:49it's a bit risky to build out all of this infrastructure. You know, what happens if there's
03:54overcapacity? But for now, you know, pelt the metal. It looks like the smart play.
03:58Matt, you agree with some of the skeptics. And in one particular point, you said that this
04:02looks a lot like a trillion dollar venture capital bet. Do you think it's appropriate
04:06that this go into a lot of the indexes and be available widely to retail customers at a time
04:14when essentially it has a characteristic more of venture capital than, say, traditional equity?
04:20Well, you know, I mean, you could take a look at Tesla. That took a long time before it got
04:24into
04:24the S&P 500. There's all sorts of, you know, growth companies, mature companies.
04:31So I would say that there's a spectrum of what's appropriate for what goes in an index.
04:36And this company kind of feels like a growth company on steroids. So I believe it can justify
04:42its $1.75 trillion valuation. I wouldn't say it's, you know, inappropriate to be going into
04:48indexes whose, you know, goal is to track the market. If people don't want to own those index funds,
04:54they can certainly sell.
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