WEBVTT - SpaceX IPOs on the Nasdaq 0:00:02.520 --> 0:00:10.480 Bloomberg Audio Studios, Podcasts, radio News. This is Bloomberg Business 0:00:10.520 --> 0:00:14.400 Week Daily reporting from the magazine that helps global leaders 0:00:14.400 --> 0:00:18.320 stay ahead with insight on the people, companies, and trends 0:00:18.360 --> 0:00:23.360 shaping today's complex economy, plus global business, finance and tech 0:00:23.440 --> 0:00:27.280 news as it happens. The Bloomberg Business Week Daily Podcast 0:00:27.640 --> 0:00:33.800 with Carol Masser and Tim Stenebeck on Bloomberg Radio. 0:00:32.720 --> 0:00:35.800 SpaceX again one hundred and seventy four sixty nine. It's 0:00:35.840 --> 0:00:39.760 moving fast, up almost forty no excuse me, up almost 0:00:39.760 --> 0:00:42.199 thirty percent here in the trade. Hey, one thing we 0:00:42.240 --> 0:00:43.960 wanted to point out and we want to continue with 0:00:44.000 --> 0:00:46.920 our all team coverage here. Elon Musk earlier this morning 0:00:47.040 --> 0:00:49.880 in a live stream on another one of his platforms 0:00:49.880 --> 0:00:51.400 and companies, we are talking about X. 0:00:51.440 --> 0:00:52.360 Here's what he had to say. 0:00:53.080 --> 0:00:55.360 There are always problems on Earth. There are always problems 0:00:55.360 --> 0:00:58.200 on Earth. There always things that we wish to be better, 0:00:58.280 --> 0:00:59.280 that we want to solve here. 0:00:59.200 --> 0:01:00.920 On Earth, and we should solve them. 0:01:01.480 --> 0:01:04.120 But they also have to be things that get you 0:01:04.240 --> 0:01:07.960 excited about the future, that make you glad to wake 0:01:08.080 --> 0:01:11.160 up in the morning because you can't wait to see 0:01:11.160 --> 0:01:16.440 what happens next. And that's the future that SpaceX wants. 0:01:16.200 --> 0:01:17.880 To bring to you, all right? 0:01:17.880 --> 0:01:20.000 That, of course was Elon Musk and a live stream 0:01:20.040 --> 0:01:22.479 on X this morning. Felt kind of spacey there, Tim 0:01:22.520 --> 0:01:23.240 stenteex it did. 0:01:23.240 --> 0:01:25.120 It also felt very familiar if you've read the S 0:01:25.240 --> 0:01:28.560 one for SpaceX. It felt like I was reading that 0:01:28.640 --> 0:01:31.720 all over again. This is the messaging that Elon and 0:01:31.800 --> 0:01:34.959 company want to get across that waking up in the morning, 0:01:34.959 --> 0:01:36.880 you can't wait to see what happens next, the future 0:01:36.880 --> 0:01:38.479 that SpaceX wants to bring to you. 0:01:38.520 --> 0:01:41.039 All right, guys, So let's bring back Billy Lipshealtz and 0:01:41.200 --> 0:01:44.399 Ed Ludlove of course, Bloomberg News IPO reporter Blly Lipschultz 0:01:44.440 --> 0:01:47.520 and host of Bloomberg Tech on Bloomberg Television Ed Ludlow, 0:01:47.880 --> 0:01:51.480 I mean, is this all about the future? 0:01:51.840 --> 0:01:51.920 Ed? 0:01:52.520 --> 0:01:54.800 The valuation of this We have talked so much about 0:01:54.800 --> 0:01:58.880 the valuation of the SpaceX company now and is it 0:01:58.920 --> 0:02:02.600 all about future expectations? Which is often what you do 0:02:02.680 --> 0:02:05.080 when you kind of buy into Elon in his story 0:02:05.160 --> 0:02:05.920 and his companies. 0:02:06.040 --> 0:02:09.400 Yeah, what investors have had to understand is an already 0:02:09.480 --> 0:02:12.919 quite diverse business that has lots of different arms and 0:02:12.960 --> 0:02:16.600 then over a very distant timeline, things happening in a 0:02:16.639 --> 0:02:20.080 different order. So SpaceX still has a sort of guiding 0:02:20.200 --> 0:02:24.760 mission of making humankind a multiplanetary species. One thing I 0:02:24.760 --> 0:02:27.160 would not And you know, again, all we can do 0:02:27.240 --> 0:02:29.440 is go back and read the documents. It's stated in 0:02:29.480 --> 0:02:33.240 black and white. But part of mister Musk's compensation package 0:02:33.400 --> 0:02:36.880 is literally tied to the goal of establishing a human 0:02:36.960 --> 0:02:40.959 colony on Mars, and so he doesn't really fully realize 0:02:40.960 --> 0:02:44.000 his stock based comp without achieving that goal. You know, 0:02:44.160 --> 0:02:47.000 let's for a second give some sympathy to the Business 0:02:47.040 --> 0:02:49.800 Week listeners somewhere around the world that is hearing that 0:02:49.880 --> 0:02:55.080 for the first time. Yeah, the problem is is that. Okay, 0:02:55.120 --> 0:02:57.680 so SpaceX wants to put human humankind on Mars and 0:02:57.680 --> 0:02:59.519 actually in the interim on the Moon. It's all laid 0:02:59.520 --> 0:03:02.320 out for him estas, but the business in the future 0:03:02.360 --> 0:03:03.520 has nothing to do with that. 0:03:03.760 --> 0:03:05.240 Well, what I want to ask you and Bailli come 0:03:05.280 --> 0:03:07.600 on in on this when we go to valuation. Let's 0:03:07.600 --> 0:03:10.480 say Elon doesn't do that. But is this is SpaceX 0:03:10.520 --> 0:03:13.320 really largely an AI company going forward? And is it 0:03:13.360 --> 0:03:16.000 about what he does with data centers and space and 0:03:16.000 --> 0:03:17.560 so on and so forth? When it comes to the 0:03:17.680 --> 0:03:20.040 valuation and kind of growing into it. 0:03:20.160 --> 0:03:22.080 Well, I think Ed and I were one of the first, 0:03:22.080 --> 0:03:24.080 if not the first, to really call out the fact 0:03:24.080 --> 0:03:26.920 that SpaceX pitched the twenty six and a half trillion 0:03:26.919 --> 0:03:31.640 dollar AI story. So that's terrestrial data centers, that's orbital 0:03:31.720 --> 0:03:35.080 data centers. That's potentially making grock a real rival to 0:03:35.640 --> 0:03:39.160 Claude and chat GBT pretty pie in the sky ambitions. Again, 0:03:39.240 --> 0:03:41.640 it's really when I talk to some critics, they say, well, 0:03:41.800 --> 0:03:43.960 you can't disprove a twenty six and a half trillion 0:03:43.960 --> 0:03:47.120 dollars TAM because I don't know, you say it's real. 0:03:47.200 --> 0:03:49.440 Everyone else kind of buys into it. But that's the vision. 0:03:49.720 --> 0:03:52.120 I think when you talk to investors and people who 0:03:52.160 --> 0:03:56.160 are must believers Mars, this idea that they're going to 0:03:56.200 --> 0:04:00.120 be the union specific of space and comparing Mars to 0:04:00.320 --> 0:04:03.160 California is a big part of that pitch. But the 0:04:03.200 --> 0:04:06.440 actual dollars and cents in the interim will come from 0:04:06.560 --> 0:04:09.520 the ability to provide compute via these orbital data centers. 0:04:09.800 --> 0:04:11.600 One thing I like about California is you can just 0:04:11.640 --> 0:04:13.720 go outside and enjoy it without wearing a space suit. 0:04:13.720 --> 0:04:16.240 But that's neither here nor there. And I'm going to 0:04:16.320 --> 0:04:18.359 go back to this over and over again, which is 0:04:19.240 --> 0:04:22.800 what we know about twenty twenty five revenue from SpaceX, 0:04:22.839 --> 0:04:25.800 the segments, the reporting segments, This is what we're going 0:04:25.880 --> 0:04:28.520 to be watching in the future. And remind everybody space 0:04:28.560 --> 0:04:31.800 about twenty two percent of twenty twenty five revenue connectivity, 0:04:31.800 --> 0:04:34.880 which of course includes starlink about sixty one percent, and 0:04:34.880 --> 0:04:38.680 then seventeen percent is AI. In terms of the growth 0:04:38.680 --> 0:04:42.480 opportunities in those three segments, which is the one that 0:04:42.560 --> 0:04:46.440 investors are most bullish on, Yeah, in the immediate term. 0:04:46.560 --> 0:04:49.000 In the immediate term, they are most bullish on something 0:04:49.080 --> 0:04:53.760 that's quite recent, which is space XAI. Remember SpaceX owns. 0:04:53.640 --> 0:04:56.440 XAI as of early twenty twenty six. 0:04:56.320 --> 0:05:00.680 Very quickly pivoting itself to be a neocloud, in other words, 0:05:00.760 --> 0:05:04.200 renting the compute capacity on Earth, the data center that's 0:05:04.320 --> 0:05:08.320 terrestrial in nature to Anthropic and Google. Anthropic agreed to 0:05:08.320 --> 0:05:10.400 pay one point twenty five billion dollars per month. 0:05:10.400 --> 0:05:12.159 There's a lot of money Google more. 0:05:12.000 --> 0:05:15.240 Than nine hundred million dollars per month. Musk has made 0:05:15.240 --> 0:05:18.200 a big deal on the socials about these being short term. 0:05:18.279 --> 0:05:21.000 They can pull the plug after ninety days. But you know, 0:05:21.200 --> 0:05:23.960 the investors are like, wow, that's so smart. 0:05:24.160 --> 0:05:26.240 And it's also real money in the very near future. 0:05:26.440 --> 0:05:28.280 You make it real accounts receivables. 0:05:28.360 --> 0:05:32.120 Right again, this is so difficult. I think that you know, 0:05:32.160 --> 0:05:34.600 the shares now are at a thirty percent game. I 0:05:34.600 --> 0:05:35.600 don't have the ticker in front of me. 0:05:35.760 --> 0:05:37.039 Yeah, thirty percent higher. 0:05:37.080 --> 0:05:39.640 You know, people say, okay, right, So you guys are 0:05:39.680 --> 0:05:41.320 telling us that in the future you're going to make 0:05:41.320 --> 0:05:43.880 all this money from data centers in space. And what 0:05:43.920 --> 0:05:46.680 that means in practice is a very very big satellite 0:05:46.920 --> 0:05:51.120 where the solar arrays are just ginormous. But actually in 0:05:51.160 --> 0:05:53.960 the twenty twenty five financials is buried some of the 0:05:54.000 --> 0:05:58.800 answer connectivity, which is the bucket for Starlink, is basically 0:05:58.839 --> 0:06:02.960 cash flow positive. It's a cash generating business. SpaceX has 0:06:03.000 --> 0:06:06.160 thousands of Starlink satellites and deployment around the Earth, and 0:06:06.200 --> 0:06:09.000 so what the existing investors do is extrapolay out and say, 0:06:09.000 --> 0:06:10.799 I can see them doing that with data sentens. 0:06:10.880 --> 0:06:12.840 I think it's also something that's really tangible for a 0:06:12.880 --> 0:06:15.800 lot of people who've experienced SpaceX. I mean, I've noticed 0:06:15.800 --> 0:06:19.680 advertising on United flights. United Regional jets now having starlink, 0:06:19.680 --> 0:06:21.880 they're trying to roll it out across the entire fleet. 0:06:22.080 --> 0:06:24.279 It's a pretty incredible product that a lot of people 0:06:24.640 --> 0:06:29.560 have had access to, unlike something like actually experiencing a launch. 0:06:29.680 --> 0:06:31.400 Yeah, I mean, I don't own a spot, you know, 0:06:31.520 --> 0:06:33.720 a rocket yet, but you do have starlink. 0:06:33.760 --> 0:06:34.200 But I do know. 0:06:34.279 --> 0:06:36.479 I do have starlink, and it is a pretty incredible product, 0:06:36.520 --> 0:06:38.640 and we increasingly seeing it. If you jump on an airplane, 0:06:38.640 --> 0:06:41.719 you're increasingly seeing it kind of spread out in terms 0:06:41.760 --> 0:06:44.280 of kind of more normal should I say usage. You 0:06:44.320 --> 0:06:46.680 know what's interesting is Tom keenan Scarlet Food just had 0:06:46.720 --> 0:06:51.240 Jim Chay You noted Bear noted skeptic talking about among 0:06:51.320 --> 0:06:54.360 the Elon universe, because he's pretty skeptical about most of it, 0:06:54.360 --> 0:06:56.680 it sounds like, but he talked about starlink being a 0:06:56.760 --> 0:06:59.800 real business worth a couple of hundreds of billions of 0:07:00.480 --> 0:07:03.520 so you know, is again, so the bet today is 0:07:03.560 --> 0:07:06.120 on that or like what so just really. 0:07:06.040 --> 0:07:07.839 Quick and I'll keep it really short. You know, it's 0:07:07.839 --> 0:07:11.600 interesting that channels acknowledges the merits of that business. The 0:07:11.640 --> 0:07:14.040 issue is that in this IPO process is that the 0:07:14.120 --> 0:07:17.480 prospectors set out a total addressable market of twenty eight 0:07:17.480 --> 0:07:20.960 point five trillion, and Starlink and the launch business combined 0:07:21.040 --> 0:07:22.280 was only two trillion. 0:07:21.960 --> 0:07:23.960 Of that, And even what ed when we look through 0:07:24.000 --> 0:07:26.680 the notes from the cell side analysts, again not publicly 0:07:26.680 --> 0:07:29.800 published for the most part, circulated with investors. The pitch 0:07:29.880 --> 0:07:31.920 is the fact that they're going to throw off hundreds 0:07:31.920 --> 0:07:35.520 of billions of dollars in revenue from AI. The ability 0:07:35.560 --> 0:07:38.080 potentially to hit a trillion dollars in sales according to 0:07:38.080 --> 0:07:41.360 ever Core ISI just after the end of the decade, 0:07:41.760 --> 0:07:45.240 is predicated on artificial intelligence. And when you think about it, 0:07:45.240 --> 0:07:48.200 starlink is a terrific business. It's a great business. But 0:07:48.400 --> 0:07:50.600 the multiples if you looked at a Verizon or an 0:07:50.600 --> 0:07:53.200 AD and T or a true competitor, are not what 0:07:53.480 --> 0:07:54.320 the AI VISU would be. 0:07:54.400 --> 0:07:56.160 What are they making off of XAI right now? 0:07:56.160 --> 0:07:59.800 Well, there is a big disconnect here which I'm staring 0:07:59.800 --> 0:08:01.440 at my screen. I might be able to answer at 0:08:01.480 --> 0:08:04.800 some point in the next four hours. But if XAI 0:08:05.240 --> 0:08:07.440 is going to sell all of this AI software to 0:08:07.520 --> 0:08:10.840 other companies on planet Earth, why would they rent out 0:08:10.840 --> 0:08:14.200 all the compute capacity that they built to Enthropic and Google. 0:08:15.160 --> 0:08:18.000 Why aren't they using that capacity to train more of 0:08:18.040 --> 0:08:20.400 their own models or is it a signal that people 0:08:20.400 --> 0:08:22.200 aren't using the models they're not being run on the 0:08:22.240 --> 0:08:25.840 inference side. We don't really have an answer from that, 0:08:25.920 --> 0:08:28.200 but that is what the bear would say. They would 0:08:28.480 --> 0:08:31.880 interpret that signal as yes, okay, that's a pretty profitable 0:08:31.920 --> 0:08:34.480 business potentially on paper, but what is it tell us 0:08:34.520 --> 0:08:39.680 about how much progress Xai is making with selling its software. 0:08:40.800 --> 0:08:43.760 That's a very near term headache that people go back 0:08:43.760 --> 0:08:44.880 and forth on Bailey. 0:08:44.920 --> 0:08:46.520 Over the next few months. We're going to be sort 0:08:46.559 --> 0:08:49.800 of glued to different analysts who who come out and 0:08:49.800 --> 0:08:52.800 say that they've initiated coverage and what their coverage looks like, 0:08:52.960 --> 0:08:56.239 just in terms of chatter on the street among analysts, 0:08:56.320 --> 0:08:58.880 is there a general consensus, a general view? And again, 0:08:59.520 --> 0:09:02.240 every every bank pretty much was involved in this, so 0:09:02.280 --> 0:09:05.079 there's sort of a challenge in dissecting what the banks 0:09:05.240 --> 0:09:07.559 who were involved with versus what their analysts are saying. 0:09:08.000 --> 0:09:10.520 But is there any consensus there. 0:09:10.559 --> 0:09:13.679 We'll get initiations from the banks that underwrote this deal 0:09:13.960 --> 0:09:16.120 in twenty five calendar days, so that's when we'll get 0:09:16.160 --> 0:09:19.040 the view. When you look at Oppenheimer initiating, I think 0:09:19.040 --> 0:09:20.160 they had one hundred and ninety. 0:09:19.960 --> 0:09:20.840 Dollars price target. 0:09:20.920 --> 0:09:23.600 Again, that's twelve months from now and we're currently trading 0:09:23.640 --> 0:09:25.240 at one seventy one, So take that with a grain 0:09:25.280 --> 0:09:29.240 of salt. I think the big debate when you just 0:09:29.280 --> 0:09:32.040 look at the analyst community is Tesla is the most 0:09:32.080 --> 0:09:35.520 hotly debated stock from the cell side, thirty buys, twenty 0:09:35.559 --> 0:09:38.720 four holds you hold is essentially a cell, let's call 0:09:38.720 --> 0:09:40.880 it what it is, and nine cell ratings, which is 0:09:40.920 --> 0:09:44.040 telling clients actively short this stock. So when you're looking 0:09:44.040 --> 0:09:47.319 at an investment community that hasn't bought into the Tesla vision, 0:09:47.760 --> 0:09:50.600 and the parallels are pretty darn stark in that it's 0:09:51.080 --> 0:09:53.560 on Elon AND's bet on futuristic technologies towards the end 0:09:53.600 --> 0:09:56.080 of the decade, if not a decade out, it's going 0:09:56.120 --> 0:09:59.720 to be fascinating to see what the reception is on 0:09:59.760 --> 0:10:00.520 that perspective. 0:10:00.720 --> 0:10:03.120 And maybe it gets us to a discussion point and 0:10:03.160 --> 0:10:05.520 we'll be revisiting this in the next few hours with 0:10:05.600 --> 0:10:09.880 you about a potential Tesla tie up with SpaceX. This 0:10:09.920 --> 0:10:11.920 has been banned about for months at this point. 0:10:12.000 --> 0:10:15.240 So the idea that SpaceX would merge with Tesla has 0:10:15.280 --> 0:10:18.080 been around for some time. People still believe that that 0:10:18.160 --> 0:10:20.319 will be the case to different degrees. Some see it 0:10:20.360 --> 0:10:23.280 as being completely imminent, others see it as being something 0:10:23.280 --> 0:10:25.440 that might happen in twenty twenty seven and twenty twenty eight. 0:10:25.880 --> 0:10:29.520 Tesla and SpaceX have never said anything publicly about it, right. 0:10:29.559 --> 0:10:33.120 This is all based on the thesis of some investors 0:10:33.160 --> 0:10:38.640 that have spoken publicly. But also when SpaceX merged with Xai. 0:10:39.200 --> 0:10:43.880 The friday before that was confirmed, we would reported that 0:10:44.160 --> 0:10:46.400 it looked like SpaceX was going to merge with Xai, 0:10:46.880 --> 0:10:49.920 but they had looked at multiple options and one was 0:10:50.160 --> 0:10:53.800 a discussion between SpaceX and Tesla company to company about 0:10:53.800 --> 0:10:58.080 what that merger would look like. And also in that 0:10:58.200 --> 0:11:02.480 some detail that some SpaceX investors basically went to Elon 0:11:02.800 --> 0:11:05.360 those that hadn't access to him, and said, wouldn't it 0:11:05.440 --> 0:11:08.840 be a better idea for SpaceX emerged with Tesla rather 0:11:08.920 --> 0:11:09.520 than Xai. 0:11:09.679 --> 0:11:10.400 Xai had a. 0:11:10.320 --> 0:11:14.480 Lot of debt, it was burning cash. Tesla and SpaceX 0:11:14.480 --> 0:11:17.559 are hardware companies. They're more analogous and vertical integration. In 0:11:17.600 --> 0:11:20.080 the end, it's academic. You know, SpaceX merged with XAI 0:11:20.120 --> 0:11:22.200 and then it went public and the biggest IPO in history. 0:11:22.559 --> 0:11:24.959 But it won't go away that idea. The thing is, 0:11:25.000 --> 0:11:26.560 we just don't know, well I will. 0:11:26.679 --> 0:11:28.280 Do You want to call out that an earlier interview 0:11:28.280 --> 0:11:31.319 on CVC when Chawell did say that it would make 0:11:31.960 --> 0:11:34.240 life easier, just reading from the transcript saying, well, there's 0:11:34.280 --> 0:11:37.040 no question that there's synergies between Tesla and SpaceX in 0:11:37.080 --> 0:11:40.280 our futures. Definitely, there's a convergence of kind of what 0:11:40.320 --> 0:11:42.800 we're all trying to accomplish in the future. That's an 0:11:42.800 --> 0:11:45.959 acknowledgement that it is a possibility and that it does 0:11:46.000 --> 0:11:46.160 make it. 0:11:46.280 --> 0:11:48.280 It does also exist with terror fab which we can 0:11:48.280 --> 0:11:50.160 get to you later into the hours we have together. 0:11:50.200 --> 0:11:52.560 But yeah, synergies, but it's also you've got companies that 0:11:52.600 --> 0:11:55.200 are buying stuff from each other and creates kind of 0:11:55.520 --> 0:11:59.319 a demand automatically for various elon probles. 0:11:59.360 --> 0:12:01.679 Even when you think about the fact that a big 0:12:01.720 --> 0:12:03.800 part of the pitch ed greigm if I'm wrong for 0:12:03.840 --> 0:12:06.080 Tesla is optimists, and when you talk to people who 0:12:06.080 --> 0:12:09.400 are buying into the twenty forty twenty forty five vision, sure, 0:12:09.559 --> 0:12:12.560 why wouldn't you use robots on Mars to build out 0:12:12.600 --> 0:12:13.760 the infrastructure. 0:12:14.000 --> 0:12:18.360 One more immediate answer rather than getting to Mars, is 0:12:18.440 --> 0:12:22.400 that those satellites in orbit that are data centers, you know, 0:12:22.440 --> 0:12:25.400 they have GPUs on board. When you're running Inferance, you're 0:12:25.480 --> 0:12:29.439 running the models excuse me, at the edge actually Optimus 0:12:29.640 --> 0:12:33.959 and the Robotaxi business of Tesla. There is localized compute 0:12:34.000 --> 0:12:36.200 in the brain, so to speak, of the humanoid robot. 0:12:36.240 --> 0:12:38.800 There's a chip, but there is still some element of 0:12:38.840 --> 0:12:41.560 cloud computing that's needed when you run an AI model 0:12:41.800 --> 0:12:42.560 at that scale. 0:12:43.200 --> 0:12:43.480 Good. 0:12:43.520 --> 0:12:46.160 That would be a good first customer for Starling, for Starling, 0:12:46.200 --> 0:12:47.040 sorry for SpaceX, but. 0:12:47.280 --> 0:12:49.199 But I'm glad you brought up starlink because how are 0:12:49.200 --> 0:12:51.400 these all entities all going to communicate with one another? 0:12:51.960 --> 0:12:53.120 Connectivity exactly? 0:12:53.160 --> 0:12:55.800 And also, one million robots on Mars? Is that hitting 0:12:55.840 --> 0:12:56.959 the goal of one million. 0:12:56.720 --> 0:12:57.520 People on Mars? 0:12:58.240 --> 0:13:00.920 Daryl, You're opening up a real count. I am, I am, 0:13:01.080 --> 0:13:02.240 they are people. 0:13:03.280 --> 0:13:07.360 Yet score Hey listen, folks, if you're just joining us, 0:13:07.360 --> 0:13:10.600 I'm Carol Master long At Tim Standavek, Ed Ludlow, Bally Lipsheltz. 0:13:10.679 --> 0:13:13.680 We are talking on a historic market day, no doubt 0:13:13.720 --> 0:13:16.160 about it. Shares the SpaceX climbing in their first day 0:13:16.160 --> 0:13:19.040 of trading, company making history with a seventy five billion 0:13:19.120 --> 0:13:22.040 dollar IPO sold for one point fifty and it's opening 0:13:22.080 --> 0:13:24.360 trade right now. The stock it's gone up as much 0:13:24.400 --> 0:13:26.679 as thirty percent in this first day of trading. Right now, 0:13:26.679 --> 0:13:28.840 we're looking at a share price of one hundred and 0:13:28.880 --> 0:13:32.200 seventy three ninety seven a share that means good for 0:13:32.280 --> 0:13:36.040 a gain of just shy of twenty nine percent in elon, 0:13:36.920 --> 0:13:39.520 go buy dinner for your family because you're a trillionaire. 0:13:39.559 --> 0:13:40.880 Now I'm just gonna put it out. 0:13:40.920 --> 0:13:44.719 We continue with all hands on deck, Carol Master, Tim 0:13:44.760 --> 0:13:48.160 standavek Ed Ludlow, Belly Lipsheltz, and this is Bloomberg BusinessWeek Daily, 0:13:48.280 --> 0:13:50.959 a special edition the SpaceX ipo. 0:13:52.720 --> 0:13:55.520 Stay with us. More from Bloomberg Business Week Daily coming 0:13:55.600 --> 0:13:56.480 up after this. 0:14:00.600 --> 0:14:04.480 You're listening to the Bloomberg Business Week Daily Podcast. Catch 0:14:04.520 --> 0:14:07.200 us live weekday afternoons from two to five eas during 0:14:07.440 --> 0:14:10.640 Listen on Apple Karplay and Android Auto with the Bloomberg 0:14:10.679 --> 0:14:14.079 Business app, or watch us live on YouTube. 0:14:14.600 --> 0:14:17.160 Carol Master along with Tim Stanevik and of course Bloomberg 0:14:17.440 --> 0:14:20.960 Tech host ed Ludlow. You Gotta Love it on a 0:14:21.040 --> 0:14:22.960 day when you look at the most read stories on 0:14:22.960 --> 0:14:25.880 the Bloomberg terminal in the past eight hours, and six 0:14:26.000 --> 0:14:31.040 of ten, somehow are either about SpaceX are related to SpaceX. 0:14:31.040 --> 0:14:33.840 There's also a story about Nixon five crashing New York 0:14:33.880 --> 0:14:36.320 City weddings this week. So I'm just giking an idea 0:14:36.320 --> 0:14:38.720 of what everybody's reading on the Bloomberg this far. 0:14:38.840 --> 0:14:41.400 Oh well, i think I'm guiltiest charge for reading a 0:14:41.440 --> 0:14:43.960 lot about SpaceX. Today. Shares, as we heard from Charlie 0:14:44.000 --> 0:14:45.880 just now, twenty eight percent. They were up as much 0:14:45.880 --> 0:14:48.280 as thirty let's say, go ahead and call it thirty 0:14:48.280 --> 0:14:51.160 point eight percent earlier in the session. They did open 0:14:51.560 --> 0:14:55.680 today eleven percent higher than that IPO price yesterday. Looking 0:14:55.680 --> 0:14:58.200 at volume, it is a lot of shares are trading hands. 0:14:58.200 --> 0:15:01.040 I'm at three hundred and thirty six million according to 0:15:01.080 --> 0:15:04.000 the latest instant count on the Bloomberg Terminal. 0:15:04.120 --> 0:15:07.160 Yeah, it's pretty historic and fun to watch, but it 0:15:07.160 --> 0:15:09.520 feels like very orderly and kind of millow. We were 0:15:09.560 --> 0:15:11.600 just saying, hey, we want to get to a trusted 0:15:11.600 --> 0:15:14.120 and thoughtful voice on all things Elon Musk and his 0:15:14.200 --> 0:15:17.480 universe masks Chapkin is with us he's Bloomberg BusinessWeek columnist 0:15:17.760 --> 0:15:20.800 who's host of Everybody's Business podcast here at Bloomberg, author 0:15:20.840 --> 0:15:23.320 of the Contrarian Peter Teel and The Rise of the 0:15:23.320 --> 0:15:26.880 Silicon Valley Oligarchs. He's here in studio along with me 0:15:26.920 --> 0:15:29.320 and Tim and of course the host of Bloomberg Tech 0:15:29.360 --> 0:15:30.320 at Ludlow Max. 0:15:30.560 --> 0:15:33.880 Hey, Hey, so, how are you thinking. 0:15:33.640 --> 0:15:35.360 About this that you wrote a story back in April, 0:15:35.400 --> 0:15:38.000 and I think the headline on it was that SpaceX's 0:15:38.040 --> 0:15:42.120 IPO is Elon Musk's most audacious product launch yet. 0:15:42.640 --> 0:15:42.880 Yeah. 0:15:42.960 --> 0:15:45.920 I mean when I've been spending some of today thinking 0:15:45.920 --> 0:15:49.720 about the last Elon Musk IPO back in twenty ten, 0:15:50.280 --> 0:15:53.280 and you think about then, the it was at a 0:15:53.840 --> 0:15:58.280 not a super high valuation, the economy was not great, 0:15:58.400 --> 0:16:02.800 there were you know, relative i'd say, low expectations. 0:16:02.080 --> 0:16:03.000 Around that company. 0:16:03.360 --> 0:16:06.680 And also Elon Musk was incredibly popular, right, he didn't 0:16:06.720 --> 0:16:09.800 have this kind of political thing where you have a 0:16:09.800 --> 0:16:12.960 lot of people who are suddenly you know, really mad 0:16:12.960 --> 0:16:15.720 at him, really mad at his company's talent, you mad 0:16:15.760 --> 0:16:17.920 at data centers and so on. So I think in 0:16:17.960 --> 0:16:22.280 a lot of ways SpaceX is going into this market 0:16:22.480 --> 0:16:25.240 that while it's it's very inflated. It's hard to see 0:16:25.520 --> 0:16:27.240 where how much room there is to grow. 0:16:27.600 --> 0:16:31.840 But it does seem like Max that in recent weeks 0:16:31.840 --> 0:16:37.400 and months, the chatter around Elon's political actions over the 0:16:37.480 --> 0:16:42.320 last couple of years, what his relationship with the president, 0:16:43.040 --> 0:16:45.920 that has not really been the focus of the way 0:16:45.960 --> 0:16:48.480 that people are thinking about this, I PO and in fact, 0:16:48.520 --> 0:16:51.360 it doesn't seem like it's come up much in the coverage. Certainly, 0:16:51.360 --> 0:16:54.080 there were some protests outsign the NASDAC today, or I 0:16:54.080 --> 0:16:58.040 should say, some some signage outside the NASDAC today, But 0:16:58.720 --> 0:17:01.200 I don't know, I don't know how else how would 0:17:01.240 --> 0:17:04.200 you describe it was an effigy? 0:17:04.640 --> 0:17:06.640 Is that the word? 0:17:06.080 --> 0:17:09.919 I think he is still very much involved, you know, 0:17:10.200 --> 0:17:12.200 in the in our politics, he's a when you look 0:17:12.200 --> 0:17:14.240 at the list of donors for twenty twenty six, he's 0:17:14.280 --> 0:17:16.679 he's pretty high up there. Uh. He and he and 0:17:16.720 --> 0:17:20.960 Trump of course are are back together. They're the friendship 0:17:21.000 --> 0:17:23.840 is back on. Uh, you know, SpaceX just want a 0:17:23.840 --> 0:17:26.399 couple of big contracts related to. 0:17:26.400 --> 0:17:27.119 The Golden Dome. 0:17:27.760 --> 0:17:32.240 I think what's happened is that the AI story has 0:17:32.280 --> 0:17:36.080 basically swamped everything else. And that's especially true when we're 0:17:36.080 --> 0:17:38.960 talking about the sort of financial side and Wall Street 0:17:38.960 --> 0:17:42.359 and everything. I mean, the bankers who have been pushing 0:17:42.359 --> 0:17:46.080 this are certainly not pitching Elon Musk's connection to the 0:17:46.119 --> 0:17:48.480 Trump administration at least I wouldn't think explicitly. 0:17:49.480 --> 0:17:53.160 And and the AI story is is. 0:17:53.200 --> 0:17:54.520 Risk factors right? Political? 0:17:54.640 --> 0:17:55.120 Well? 0:17:55.520 --> 0:17:58.160 Well, no, I mean the main issue in the risk 0:17:58.240 --> 0:18:01.720 fact is, right, you just I'm just recounting, is that 0:18:02.240 --> 0:18:04.719 it also spells out as clear as day that the 0:18:04.920 --> 0:18:08.359 entire success of the plan is dependent on Elon Musk 0:18:08.480 --> 0:18:11.639 leading it right, you know, that it says if he 0:18:11.720 --> 0:18:13.880 were to go away, that would be it, and that 0:18:14.359 --> 0:18:15.960 in the last you know, Max. 0:18:16.359 --> 0:18:17.360 And Ims was so big. 0:18:17.600 --> 0:18:18.880 Risk is so weird. 0:18:18.920 --> 0:18:21.600 I'm like thinking back, was it even twenty twenty four 0:18:21.760 --> 0:18:23.400 that we wrote it? Or was twenty twenty. 0:18:23.240 --> 0:18:24.840 Five twenty four? 0:18:25.000 --> 0:18:28.600 I believe everyone's just trying to make sense of, like, Okay, 0:18:29.119 --> 0:18:32.200 what was it that Elon Musk was trying to achieve 0:18:32.720 --> 0:18:37.440 by aligning himself in that political bucket even outside of 0:18:37.520 --> 0:18:41.120 the president. You know, people ask me all the time 0:18:41.160 --> 0:18:44.240 at the moment that I mean, literally this week, Well, 0:18:44.400 --> 0:18:48.080 is there anything about SpaceX going public in the President 0:18:48.080 --> 0:18:50.360 Trump's term don't know the answer. 0:18:50.840 --> 0:18:51.080 Yeah. 0:18:51.119 --> 0:18:53.080 I think I asked you, like, would we be having 0:18:53.400 --> 0:18:56.600 a SpaceX IPO if President Trump not of. 0:18:56.560 --> 0:18:59.000 Two trillion dollars. I mean, I think so much of 0:18:59.080 --> 0:19:02.520 the run up in the in the AI market has 0:19:02.600 --> 0:19:05.800 to do with the White Houses, for better or worse, 0:19:06.440 --> 0:19:09.160 the White House's policy on AI, which has essentially been 0:19:09.520 --> 0:19:12.639 let them cook. You know, let's let's take rip out 0:19:12.680 --> 0:19:15.639 all the regulations, let's get data centers going as quickly 0:19:15.680 --> 0:19:18.199 as we can, and so on, and so much of 0:19:18.240 --> 0:19:21.679 that is you know, is kind of baked into the 0:19:21.760 --> 0:19:24.639 SpaceX pitch. I also think, as I said, you know, 0:19:25.240 --> 0:19:28.720 the s one says that US federal contracts are about 0:19:28.720 --> 0:19:32.720 twenty percent of SpaceX's revenue. That's down, it's falling, but 0:19:32.840 --> 0:19:37.520 that's still a significant amount of money. And as I said, 0:19:37.760 --> 0:19:40.639 they are getting more contracts as much as this is 0:19:40.720 --> 0:19:43.680 kind of a sideline for SpaceX at this point, because 0:19:43.680 --> 0:19:47.040 the future is starlink. The future is you know, data 0:19:47.040 --> 0:19:50.159 centers in space and groc and all that stuff. The 0:19:50.200 --> 0:19:54.240 present very much is is government contracts, and they have 0:19:54.320 --> 0:19:57.160 done well during this period. I think we're talking about 0:19:57.160 --> 0:19:59.960 Elon Musk being a trillionaire, you know, I'm not sure 0:20:00.080 --> 0:20:02.480 or that he's a trillionaire if he doesn't have that 0:20:02.560 --> 0:20:05.640 political adventure that he had, you know, in twenty twenty 0:20:05.640 --> 0:20:06.720 four and twenty twenty five. 0:20:07.600 --> 0:20:09.600 The one thing I would observe right is that we 0:20:09.720 --> 0:20:13.880 keep forgetting about what is SpaceX on the hook? For 0:20:14.560 --> 0:20:17.880 SpaceX and Starship are a massive part of America's ambition 0:20:17.960 --> 0:20:20.480 to get back to the moon. In fact, they are 0:20:20.560 --> 0:20:23.720 literally now on the hook to make Starship work in 0:20:23.760 --> 0:20:27.120 a certain timeframe where they're required to demo that this year. 0:20:27.119 --> 0:20:31.120 And that's so fascinating because that isn't codified in the prospectus. 0:20:31.160 --> 0:20:32.280 It's not even discussed. 0:20:32.359 --> 0:20:34.560 How are they doing with respect to Starship. 0:20:34.520 --> 0:20:37.639 Well, they've just done the twelfth test flight and the 0:20:38.560 --> 0:20:42.919 twelfth sort of mission I suppose, where it carried no 0:20:43.080 --> 0:20:45.719 payload of any significance. It was a dummy, but it 0:20:45.760 --> 0:20:48.160 was with a brand new architecture, basically top to tail. 0:20:48.200 --> 0:20:50.200 They re engineered it. And I think what Gwynn shot 0:20:50.200 --> 0:20:52.520 Well the President and COO, has been saying this morning 0:20:52.640 --> 0:20:55.440 is that in the coming weeks they'll do thirteen and fourteen. 0:20:55.840 --> 0:20:57.920 The whole point of it is the economics work, because 0:20:57.920 --> 0:21:00.119 it's reusable so it's very big. You can carry lot 0:21:00.160 --> 0:21:03.879 of stuff into space, but they've never actually successfully landed 0:21:03.920 --> 0:21:06.359 both parts, the booster and the spacecraft back on Earth. 0:21:06.760 --> 0:21:09.000 And that if it's going to carry human beings is 0:21:09.119 --> 0:21:10.520 a test that they should get too soon. 0:21:10.560 --> 0:21:12.520 And they haven't taken anything their orbit yet. I mean, 0:21:12.560 --> 0:21:14.920 and that for you know that that's the data center. 0:21:14.960 --> 0:21:16.480 That's going to be an important milestone. 0:21:16.520 --> 0:21:19.240 I mean, it's it's important to say it's right, like 0:21:19.359 --> 0:21:22.760 the Artemis mission is kind of in a bind if 0:21:22.800 --> 0:21:26.240 Starship doesn't come through, but all of SpaceX is in 0:21:26.280 --> 0:21:28.120 a bind if Starships doesn't say one thing. 0:21:28.040 --> 0:21:31.640 Real quick, So you've got I'm just recounting what's happened. 0:21:32.040 --> 0:21:36.919 But in the twelfth test flight they deployed dummy Starlink satellites. 0:21:37.240 --> 0:21:39.119 It's like a Pez for you know, for fans of 0:21:39.160 --> 0:21:41.400 the Pez candy. You have that in America, right, Yeah, 0:21:41.400 --> 0:21:42.640 obviously the du. 0:21:43.240 --> 0:21:46.480 Like it's been around for a while, the Starship space 0:21:46.480 --> 0:21:47.800 for my time even. 0:21:47.960 --> 0:21:50.280 I'm sorry, you can go to the museum in Connecticut 0:21:50.320 --> 0:21:50.800 while you're here. 0:21:50.880 --> 0:21:53.159 Okay, dear America, I'm sorry. 0:21:53.280 --> 0:21:55.320 There is probably an elon Pears. 0:21:55.440 --> 0:21:56.439 I don't know that there. 0:21:56.320 --> 0:21:59.080 Was definitely a serious point to this. Basically, how the 0:21:59.160 --> 0:22:02.159 Starlink satellite to play out of starship. There's a slot, 0:22:02.200 --> 0:22:03.800 they come out the side kind of like and they 0:22:03.800 --> 0:22:05.679 get pushed down and down and down lak Pez. But 0:22:06.000 --> 0:22:08.440 they did demo the ability to do it, but it 0:22:08.480 --> 0:22:11.320 was the payload wasn't real. They were dummies. So I'm 0:22:11.320 --> 0:22:14.040 just stating that for the record, does elin. 0:22:13.840 --> 0:22:14.400 Have to be worried? 0:22:14.440 --> 0:22:17.320 I mean, Jeff Bezos has become rather chummy with the administration, 0:22:17.440 --> 0:22:20.120 and do we have to ever worry about Blue Origin 0:22:20.320 --> 0:22:24.080 and his rockets being able to do some of what 0:22:24.240 --> 0:22:24.640 we are. 0:22:24.600 --> 0:22:26.760 But they're also an integral part of the Artemist. 0:22:26.400 --> 0:22:27.880 Mission, hautely worried. 0:22:27.920 --> 0:22:31.560 Although Blue Origin had a huge setback recently, and so 0:22:31.760 --> 0:22:34.120 and that and that is why that because because Blue 0:22:34.119 --> 0:22:37.640 Origin and SpaceX are competing for this lunar Lander, uh, 0:22:37.760 --> 0:22:41.320 this lunar Lander part of the mission. And and and 0:22:41.400 --> 0:22:43.960 you know, of course, you know Blue Origin is say 0:22:44.000 --> 0:22:46.199 they're they're going to rebuild and everything. But this everyone 0:22:46.240 --> 0:22:48.280 I've talked to in this world says that it's a 0:22:48.320 --> 0:22:49.040 huge setback. 0:22:49.200 --> 0:22:52.119 We're speaking with Max Chafkin, Bloomberg business Week columnists. The 0:22:52.119 --> 0:22:54.600 host of the Everybody's Business podcast here at Bloomberg. He's 0:22:54.600 --> 0:23:00.720 author of the contrarian uh Max. The Carol mentioned Jeff Bezos. 0:23:00.760 --> 0:23:02.440 We're going to talk about Blue Origin a little later 0:23:02.440 --> 0:23:04.280 in the program. Before we do that, You've spent a 0:23:04.320 --> 0:23:06.320 lot of years covering Tesla in the way that Elon 0:23:06.440 --> 0:23:08.639 Musk has led Tesla as a as a public company 0:23:08.640 --> 0:23:12.600 and his relationship with investors. How should investors right now 0:23:12.800 --> 0:23:17.080 look at that over the last decade or so an 0:23:17.160 --> 0:23:19.280 as an idea for how he'll run this company and 0:23:19.359 --> 0:23:21.719 maybe even divide his time. It's kind of different thing 0:23:21.800 --> 0:23:22.280 in both. 0:23:22.080 --> 0:23:26.720 Public that I'm not sure how helpful the early years 0:23:26.760 --> 0:23:29.480 of Tesla are to understanding this. I think I think 0:23:29.520 --> 0:23:33.520 SpaceX really looks very similar to the Tesla of the 0:23:33.600 --> 0:23:38.639 last couple of years, the post AI pivot, and where 0:23:38.680 --> 0:23:43.800 you have this very good business that is kind of 0:23:43.840 --> 0:23:47.199 being pushed to the side for reasons that either have 0:23:47.280 --> 0:23:51.800 to do with muscles. In the case of Tesla, it's 0:23:51.840 --> 0:23:55.600 the auto's business, which which is this very very successful, 0:23:55.760 --> 0:23:57.960 good business. It's the thing that everyone talks about. Elon 0:23:58.080 --> 0:24:01.119 Musk popularized electric cars, you know, in the United States, 0:24:01.359 --> 0:24:03.760 but but for two years or so it's been de emphasized, 0:24:03.800 --> 0:24:05.800 and you look at it, sales have not been growing. 0:24:05.880 --> 0:24:08.680 I mean, it is in certain ways a challenged business. 0:24:08.880 --> 0:24:13.680 And then you have this kind of futuristic robots, self 0:24:13.760 --> 0:24:16.720 driving cars piece of the business. Same thing with SpaceX. 0:24:16.760 --> 0:24:18.399 But the one thing I'll say is I think the 0:24:19.040 --> 0:24:22.840 legacy part of SpaceX is actually a better business than 0:24:22.880 --> 0:24:25.680 the EV business. I mean, the EV business, as dominant 0:24:25.720 --> 0:24:29.320 as it was, never reached any kind of like monopoly status, 0:24:29.359 --> 0:24:33.120 whereas SpaceX's launch business, you know, kind of is that 0:24:33.160 --> 0:24:35.840 there are there are competitors, There are there are parts 0:24:35.840 --> 0:24:37.919 of the business where they have more competition than others. 0:24:38.200 --> 0:24:41.000 But you know, as we're saying, if SpaceX has a 0:24:41.119 --> 0:24:43.399 has a huge problem, NASA has a huge problem, a 0:24:43.440 --> 0:24:46.199 bunch of satellite makers have a huge problem. They really 0:24:46.280 --> 0:24:49.439 have the market, you know, more or less cornered in 0:24:49.480 --> 0:24:51.960 that in that piece, and then you have this futuristic 0:24:52.040 --> 0:24:55.440 stuff that you know, even Starlink to some extent is futuristic. 0:24:55.560 --> 0:24:56.640 But of course the data. 0:24:56.480 --> 0:24:58.840 Center thing, which is just like pure science fiction, so 0:24:59.320 --> 0:25:02.800 Starlink is it's like the Robotaxi. Data centers are like 0:25:02.840 --> 0:25:03.840 the humanoid robots. 0:25:03.840 --> 0:25:06.120 No, everybody thinks it's science fiction. Just very quick. 0:25:06.280 --> 0:25:08.800 All the SpaceX investors that phone me over the last week, 0:25:08.840 --> 0:25:12.320 thanks for phoning me. Interesting that SpaceX aren't encouraging you 0:25:12.320 --> 0:25:16.600 to come on Bloomberg Television Radio. They also would make 0:25:16.640 --> 0:25:19.639 the case that it's not analogous to Tesla, but they 0:25:19.640 --> 0:25:23.240 would also say that SpaceX should get credit right now 0:25:23.280 --> 0:25:26.280 for being a much more diversified business than we talk about. 0:25:26.359 --> 0:25:28.320 It is more than rockets, and they have a good 0:25:28.320 --> 0:25:30.080 interim before Orbital Data Center. 0:25:30.480 --> 0:25:33.520 Edlla Loos Staying with Us, host of Bloomberg Tech, Max Chafkin, 0:25:33.520 --> 0:25:35.639 thank you so much. Bloomberg Business Week columnist, host of 0:25:35.680 --> 0:25:36.880 Everybody's Business Podcast. 0:25:36.960 --> 0:25:38.520 Check it out on the weekend. 0:25:39.840 --> 0:25:42.640 Stay with us. More from Bloomberg Business Week Daily coming 0:25:42.720 --> 0:25:43.600 up after this. 0:25:47.600 --> 0:25:51.440 You're listening to the Bloomberg Business Week Daily Podcast. Catch 0:25:51.520 --> 0:25:54.200 us live weekday afternoons from two to five e's during 0:25:54.400 --> 0:25:58.320 Listen on Applecarplay and Android Otto with the Bloomberg Business app, 0:25:58.480 --> 0:25:59.200 or watch. 0:25:59.040 --> 0:26:00.600 Us live on YouTube. 0:26:01.320 --> 0:26:05.119 Yeah, certainly we're focusing on SpaceX. Get it just we 0:26:05.119 --> 0:26:08.080 were quickly talking before we got going, and you take 0:26:08.080 --> 0:26:09.960 a look at what's going on with Tesla. We've seen 0:26:10.000 --> 0:26:11.760 it up as much as one and a half percent today. 0:26:11.800 --> 0:26:14.960 It's been down three percent in today's session right now, Tim, 0:26:15.040 --> 0:26:16.800 just a game about half a percentage point. 0:26:16.840 --> 0:26:19.560 All right, that's Tesla, but SpaceX certainly only moving in 0:26:19.680 --> 0:26:23.280 one direction. Opening eleven percent higher than that IPO price yesterday, 0:26:23.560 --> 0:26:26.240 up as much as thirty point eight percent. Right now, 0:26:26.320 --> 0:26:29.719 up about twenty seven point three percent so far. This 0:26:29.840 --> 0:26:33.240 looks like a pretty successful first day of trading. I 0:26:33.240 --> 0:26:35.120 think it's fair to say three hundred and fifty five 0:26:35.280 --> 0:26:37.400 million shares as we speak of traded hands. 0:26:37.480 --> 0:26:38.840 It's pretty calm. Carol Masser. 0:26:38.880 --> 0:26:43.120 Tim Stanevek also ed Ludlow, co host of Bloomberg Tech, 0:26:43.119 --> 0:26:46.200 of course, on Bloomberg Television Monday through Friday at eleven am. 0:26:46.760 --> 0:26:48.640 Who has been all things? How long do you feel 0:26:48.640 --> 0:26:50.240 like you've been talking about this IPO? 0:26:50.640 --> 0:26:53.480 Yeah, I mean goes back to when we break the 0:26:53.520 --> 0:26:55.560 story even the end of last year, that the whole 0:26:55.560 --> 0:26:58.199 point of the IPO was, Oh, they needed lots of 0:26:58.240 --> 0:27:01.160 money to buy chips to put in space And as 0:27:01.200 --> 0:27:04.080 I told you a few times this month, people laughed 0:27:04.119 --> 0:27:05.960 at that report at the time, like that's not why 0:27:06.000 --> 0:27:08.960 they would IPO. And then the prospectors hit and here 0:27:09.000 --> 0:27:09.240 we are. 0:27:09.320 --> 0:27:10.040 They need money. 0:27:10.280 --> 0:27:12.960 Yeah, they need GPUs in space, but yeah, they need 0:27:13.000 --> 0:27:13.520 money for that. 0:27:13.680 --> 0:27:13.920 Yeah. 0:27:14.240 --> 0:27:14.440 Yeah. 0:27:14.440 --> 0:27:16.720 I want to bring in Anthony Hughes, Bloomberg News US 0:27:16.800 --> 0:27:20.200 equity capital markets reporter. He joins us from the Bloomberg 0:27:20.440 --> 0:27:24.000 News bureau here in New York, just steps away from US. Anthony, 0:27:24.400 --> 0:27:27.120 pretty successful out of the gate. I think it's fair 0:27:27.160 --> 0:27:29.640 to say NASDAC should be patting itself on the back 0:27:29.720 --> 0:27:30.080 right now. 0:27:30.920 --> 0:27:33.520 Yes, Tim, I think for a IPO of this size, 0:27:34.160 --> 0:27:38.520 a percent gain is a pretty balanced outcome, you know, 0:27:38.560 --> 0:27:41.719 from the bank's perspective. You know, obviously you never want 0:27:41.760 --> 0:27:43.760 to see the stock go down, but you don't want 0:27:43.760 --> 0:27:45.600 to see the stock necessarily go through the roof either. 0:27:45.720 --> 0:27:49.200 So you know, twenty thirty percent for a high growth 0:27:49.200 --> 0:27:51.760 company too, I mean, you want to see a decent return, 0:27:51.880 --> 0:27:54.560 So you know, I think people will go away and 0:27:54.560 --> 0:27:57.399 think this is a relatively balanced outcome compared to a 0:27:57.400 --> 0:27:58.800 lot of IPOs we've seen in the past. 0:28:00.119 --> 0:28:01.000 Yeah, it's interesting. 0:28:01.040 --> 0:28:02.800 You know, we've been talking with you as well to 0:28:02.880 --> 0:28:06.000 the lead up, Anthony, I don't know what's top of mind. 0:28:06.000 --> 0:28:07.600 What have you been thinking about as you watch the 0:28:07.680 --> 0:28:10.000 trade today and what's important here. 0:28:10.800 --> 0:28:12.920 Yeah, well, I think we've been looking at the level 0:28:12.920 --> 0:28:16.720 of volume, and certainly out of the gate they got 0:28:16.760 --> 0:28:19.760 about ten percent of the stock paired up and you 0:28:19.760 --> 0:28:22.439 know at the opening print there, So that's sort of 0:28:23.119 --> 0:28:25.520 something you'd like to see to make sure it's an 0:28:25.600 --> 0:28:27.960 orderly outcome. I think the main thing. I mean, it 0:28:27.960 --> 0:28:29.760 can be a little bit of an anti climax in 0:28:29.760 --> 0:28:31.520 some ways the first day of trading for a stock, 0:28:31.600 --> 0:28:34.120 because we've said a lot already about this company. We're 0:28:34.160 --> 0:28:37.120 just seeing basically the results today. But you know, it's 0:28:37.119 --> 0:28:40.520 fairly orderly. First day of trading started up eleven percent, 0:28:40.760 --> 0:28:42.840 I mean, funnily enough, if you go back to Facebook 0:28:42.880 --> 0:28:44.640 in twenty twelve, it actually went up eleven percent on 0:28:44.680 --> 0:28:47.440 the appening print too, but then finish flat. So it 0:28:47.440 --> 0:28:49.400 doesn't look like it's going to happen here for SpaceX. 0:28:49.440 --> 0:28:52.400 But you know, sometimes you know, these early games can 0:28:52.440 --> 0:28:55.120 evaporate as the day goes on. But you know, it's 0:28:55.120 --> 0:28:58.440 just one day of trading, and there's many, many days ahead, 0:28:58.440 --> 0:29:00.840 and anyone who's been a long term sharehold of Tesla 0:29:00.920 --> 0:29:04.160 knows that there's some tough days and some great days. 0:29:04.160 --> 0:29:04.760 But longer term. 0:29:04.800 --> 0:29:06.440 Tesla did very well, and I guess a lot of 0:29:06.440 --> 0:29:08.720 people are hoping to see something similar here, but on 0:29:09.000 --> 0:29:11.000 a larger scale. And this company's got such a big 0:29:11.360 --> 0:29:15.400 market cap, it's obviously hard to expect that SpaceX will 0:29:15.400 --> 0:29:18.440 do something like Tesla in terms of a relative gain. 0:29:18.520 --> 0:29:21.560 But you know, obviously SpaceX got big dreams and sort 0:29:21.560 --> 0:29:23.440 of unlimited hopes about what they can do in space. 0:29:23.600 --> 0:29:25.400 I want to I'm glad you brought up Facebook. We 0:29:25.400 --> 0:29:26.960 were talking about that just a few minutes as we 0:29:27.000 --> 0:29:29.680 came live to you before SpaceX up twenty percent ed 0:29:29.760 --> 0:29:32.200 love though. We're gonna get to Nickollis in just a second, 0:29:32.200 --> 0:29:34.320 but before we do, just remind us today who can 0:29:34.320 --> 0:29:35.040 actually sell? 0:29:35.400 --> 0:29:35.640 Yeah? 0:29:35.680 --> 0:29:38.440 Sure, this is a really important point because there's been 0:29:38.440 --> 0:29:40.440 a lot of discussion about, Okay, who are the new 0:29:40.480 --> 0:29:43.560 one the new centi millionaires, who are the new millionaires, 0:29:43.560 --> 0:29:45.920 and who are the venture capitalists who have made billions 0:29:45.920 --> 0:29:46.120 on that. 0:29:46.240 --> 0:29:48.040 Just a few rapid five things. There's a big difference 0:29:48.040 --> 0:29:51.800 between economic ownership of this stock and voting power. So 0:29:51.920 --> 0:29:54.360 Elon Musk has eighty four percent voting power, right, and 0:29:54.440 --> 0:29:56.880 so he's locked up for three hundred and sixty six days. 0:29:56.880 --> 0:29:59.200 But you know, he he's going to be a big seller, 0:29:59.200 --> 0:30:01.040 and he also has a big options packet that he 0:30:01.760 --> 0:30:03.760 can exercise, and then everyone else is kind of tiered. 0:30:03.800 --> 0:30:06.280 So after the Q four twenty six earnings released, twenty 0:30:06.320 --> 0:30:09.440 percent of the existing shares are free of a lock up. 0:30:09.880 --> 0:30:13.160 Who can sell today is basically anyone that participated in 0:30:13.480 --> 0:30:16.560 the offering the seventy five billion. And what was so 0:30:16.640 --> 0:30:22.680 interesting to hear from the buyside today is like begrudgingly 0:30:23.280 --> 0:30:26.280 their participation in the open market as buyers, you know, 0:30:26.280 --> 0:30:29.680 because loads of people didn't get allocations. You know, we 0:30:29.720 --> 0:30:31.520 can we have so much time. We can talk about 0:30:31.520 --> 0:30:34.040 the venture funds later. But you know, even those that 0:30:34.040 --> 0:30:36.520 are subject to lock ups, the venture funds will distribute 0:30:36.560 --> 0:30:40.320 the shares back to their LPs, which are endowments, pension funds. 0:30:40.320 --> 0:30:42.800 They don't just give them cash. Yeah, but those they 0:30:42.800 --> 0:30:44.920 won't sell the stock, you know that at least that's 0:30:44.960 --> 0:30:45.920 what people keep telling me. 0:30:46.080 --> 0:30:48.320 Yeah, it's longer term, right, they're going to stay with it. 0:30:48.520 --> 0:30:50.760 Hey, we're talking, of course, with our low host of 0:30:50.760 --> 0:30:53.360 Bloomberg Tech. We've also got with us Anthony Hughes, Bloomberg 0:30:53.400 --> 0:30:57.120 News ECM reporter joining us here as well, and then 0:30:57.200 --> 0:31:00.360 let's roll into the mix. Nick cooll Us just joining 0:31:00.440 --> 0:31:02.840 us here on set, co founder of Data Trek Research. 0:31:03.840 --> 0:31:07.160 Good to have you here. You're an independent financial advisory firm. 0:31:07.200 --> 0:31:11.040 Would you be advising institutional investors retail investors to own 0:31:11.040 --> 0:31:11.560 this one? 0:31:11.720 --> 0:31:13.240 Well, what we do is we try to give people 0:31:13.280 --> 0:31:17.400 a framing to understand their decision. And by that count, 0:31:17.520 --> 0:31:19.800 the simple math obviously doesn't add up. This is a 0:31:19.960 --> 0:31:24.240 very expensive stock relative to any rational measure of value. 0:31:24.480 --> 0:31:27.640 But we're talking about Elon Musk, who has a tremendous 0:31:27.680 --> 0:31:30.600 track record of not just success, but convincing people that 0:31:30.640 --> 0:31:34.400 success is durable. So it's not a calculus based on valuation. 0:31:34.440 --> 0:31:37.480 It's a calculus based on faith. And plenty of people 0:31:37.560 --> 0:31:40.000 have a ton of faith and have made billions of 0:31:40.000 --> 0:31:41.920 dollars with Elon Musk in the past, and they're willing 0:31:41.960 --> 0:31:43.600 to give them a pass on this one because they 0:31:43.600 --> 0:31:44.640 think they can happen again. 0:31:45.080 --> 0:31:46.800 I want to talk connectivity a little bit with you, 0:31:47.120 --> 0:31:50.080 and the focus on really telecom starlink when it comes 0:31:50.080 --> 0:31:52.040 to this IPA. It's in twenty twenty five, it was 0:31:52.080 --> 0:31:55.080 sixty one percent of the revenue. As I was mentioning earlier, 0:31:55.120 --> 0:31:57.280 I think for a lot of people who you know 0:31:57.360 --> 0:32:00.920 haven't been to a rocket launch, or actually you know, 0:32:01.240 --> 0:32:04.640 are big users of the AI tech that SpaceX has, 0:32:04.680 --> 0:32:08.480 maybe Starlink is the most tangible part of this business 0:32:08.480 --> 0:32:11.640 that they've interacted with. In your view, that's a pretty 0:32:11.680 --> 0:32:12.680 good business, right. 0:32:12.720 --> 0:32:14.160 It is a phenomenal business. 0:32:14.840 --> 0:32:16.400 It is a truly I mean, there were so many 0:32:16.480 --> 0:32:19.600 years when we were talking about and Edward was reporting 0:32:19.600 --> 0:32:21.920 on it, the possibility of perhaps that being spun off 0:32:21.920 --> 0:32:23.240 as its own indepact as. 0:32:23.120 --> 0:32:25.640 A traded company, and their prediction market contracts on that 0:32:25.720 --> 0:32:30.200 right now, oddly enough, it is a truly disruptive business 0:32:30.200 --> 0:32:32.760 in the classic Clayton Christiansen sense of the word. It's 0:32:32.760 --> 0:32:35.720 a new technology that offers a product to an undersherved 0:32:35.720 --> 0:32:38.719 community and then builds up from there. So how Amazon 0:32:38.800 --> 0:32:41.680 started with books and then blew up everything, Starlink started 0:32:41.680 --> 0:32:43.320 with rural customers and has blown. 0:32:43.160 --> 0:32:43.680 Up to everything. 0:32:43.680 --> 0:32:46.880 It's exactly the playbook investors want to see, and Elon 0:32:47.000 --> 0:32:48.360 as usual, has played it perfectly. 0:32:49.680 --> 0:32:52.280 I just you know, I just recap the numbers, you know, 0:32:52.320 --> 0:32:55.040 I find that so interesting that you're saying you can't 0:32:55.040 --> 0:32:57.480 do the math, you kind of can, you know? And 0:32:57.760 --> 0:33:00.320 what a lot of the existing cap tables told me 0:33:00.360 --> 0:33:03.480 for months and months was how do I start to 0:33:03.600 --> 0:33:07.320 model for the orbital data center business? And what they 0:33:07.360 --> 0:33:13.480 would say is twenty twenty five not the revenues from starlink, 0:33:13.560 --> 0:33:17.400 but connectivity operating income four billion, and the scale of 0:33:17.440 --> 0:33:20.440 deployment and rate of deployment, literally the operation of putting 0:33:20.480 --> 0:33:23.880 it into orbit. They just extrapolate out to space based 0:33:23.920 --> 0:33:27.360 data center. Can you use faith or hope and do 0:33:27.440 --> 0:33:28.800 the same on behalf of clients? 0:33:28.880 --> 0:33:31.760 Unfortunately you have to. There is no other option. There 0:33:31.800 --> 0:33:34.560 are no orbital data centers in space right now right 0:33:34.600 --> 0:33:36.440 So you are betting on a brand new technology, and 0:33:36.440 --> 0:33:38.160 which you're betting is the guy who brought you the 0:33:38.200 --> 0:33:40.200 past couple of interesting technologies and then bring you the 0:33:40.240 --> 0:33:43.040 next one. But it is a faith based process. It 0:33:43.120 --> 0:33:45.840 is not based in any math you can rationally model. 0:33:46.000 --> 0:33:47.640 And I was a sales side analyst for a decade. 0:33:47.640 --> 0:33:49.080 I covered the udos. I know how to do a 0:33:49.120 --> 0:33:53.840 financial model, oh goodness, you know to a very strong degree. 0:33:53.920 --> 0:33:55.880 And this is not one of those analyses. So people 0:33:55.920 --> 0:33:58.000 can do whatever math they want to do the suction 0:33:58.080 --> 0:33:59.600 of trade where it wants to trade and the two 0:33:59.640 --> 0:34:01.200 make coalesced that they may. 0:34:01.040 --> 0:34:04.160 Not the real quick without betraying confidence. Do you have faith? 0:34:04.200 --> 0:34:06.200 In other words, did you tell clients like, look, this 0:34:06.280 --> 0:34:08.680 is a trade based on faith. We have faith make 0:34:08.760 --> 0:34:09.160 the trade. 0:34:09.239 --> 0:34:09.479 Yeah. 0:34:10.040 --> 0:34:12.160 What I've told clients is if you want to put 0:34:12.200 --> 0:34:14.319 in for the stock, I gave you a range and 0:34:14.400 --> 0:34:16.360 I just went in through the numbers. The average IPO 0:34:16.400 --> 0:34:18.960 since nineteen eighty up nineteen percent on day one, So 0:34:19.000 --> 0:34:21.560 that's the bogie one sixty one for SpaceX is an 0:34:21.680 --> 0:34:24.040 average IPO one day pop. If you want to look 0:34:24.040 --> 0:34:26.320 at twenty twenty five, it was a twenty nine percent pop, 0:34:26.560 --> 0:34:28.640 SO one seventy four, which is right around where I 0:34:28.640 --> 0:34:29.600 think we're trading now. 0:34:30.560 --> 0:34:32.000 Change nowt so boom. 0:34:32.040 --> 0:34:35.319 Twenty nine percent is the average twenty IPO pop from 0:34:35.360 --> 0:34:37.319 last year. If you want to look at nineteen ninety 0:34:37.400 --> 0:34:40.120 nine just to Go Bananas, that was a seventy one 0:34:40.160 --> 0:34:43.759 percent one day pop. I remember, so that was we all. Yes, yes, 0:34:43.840 --> 0:34:45.560 I certainly do as well. I was working for a 0:34:45.600 --> 0:34:47.600 Steve Cohen at the time and that was an amazing year. 0:34:48.320 --> 0:34:49.680 That would be a two thirty one close. 0:34:49.760 --> 0:34:50.880 Could Steve Cohen be buying this. 0:34:51.560 --> 0:34:54.160 Steve Colin would have gotten an allocation and probably have 0:34:54.239 --> 0:34:56.240 sold half of it on the open and be trading 0:34:56.239 --> 0:34:59.439 the other half very intelligently, because that's what he does. 0:35:00.000 --> 0:35:00.760 That's really interesting. 0:35:00.760 --> 0:35:02.799 Hey, Nickollas is with us, co founder of Data Trek, 0:35:02.840 --> 0:35:04.359 research ed Ludlow's with us. 0:35:04.600 --> 0:35:05.400 Anthony Hughes. 0:35:05.920 --> 0:35:09.319 You've been sitting by patiently here at Bloomberg News. You 0:35:09.400 --> 0:35:12.360 mentioned though Nick mentioned SpaceX. The stock right now is 0:35:12.440 --> 0:35:15.400 up almost twenty eight percent here, one seventy two and 0:35:15.560 --> 0:35:18.319 change in its first day of trading. Anthony Hughes, You've 0:35:18.320 --> 0:35:20.480 been thinking about the valuation writing about it. 0:35:20.680 --> 0:35:22.360 Got a question for Nick for us. 0:35:22.600 --> 0:35:24.719 Yeah, well, I think one of the interesting questions Nick is, 0:35:25.000 --> 0:35:26.200 you know, we do see it with a lot of 0:35:26.200 --> 0:35:29.120 these hot IPOs that they come pretty you know, they 0:35:29.120 --> 0:35:31.960 can come it can rise pretty sharply out of the gate, 0:35:32.000 --> 0:35:34.200 and then fall off pretty quickly in the weeks and 0:35:34.239 --> 0:35:36.759 months afterwards. I just wanted do you think there's an 0:35:36.840 --> 0:35:39.319 argument with SpaceX that you know, perhaps it could do 0:35:39.360 --> 0:35:41.440 something a little bit differently, just because there's such a 0:35:41.520 --> 0:35:44.160 need for people to buy the stock. The index inclusion 0:35:44.200 --> 0:35:45.759 and stuff like that. Do you think that could have 0:35:45.760 --> 0:35:48.040 a be a factor here in helping to sort of 0:35:48.080 --> 0:35:49.480 put a bit more of a floor out of the stock. 0:35:50.120 --> 0:35:51.919 I think that it is a factor for the next 0:35:51.920 --> 0:35:54.080 couple of weeks, because we have the Q entry. I 0:35:54.080 --> 0:35:57.000 think on July fifth, if if I recall correctly, fifteen 0:35:57.080 --> 0:36:00.960 days after pricing, so you're going to see some offset 0:36:00.960 --> 0:36:02.960 of people who are owning the stock right now selling 0:36:02.960 --> 0:36:05.120 it to the cues when it gets included in the 0:36:05.120 --> 0:36:07.400 one hundred past that there seems to be a proaly 0:36:07.480 --> 0:36:11.319 even matched. And they actually did earlier lockup expirations for 0:36:11.400 --> 0:36:15.719 employees and insiders than usual, So you actually compare the 0:36:15.840 --> 0:36:19.640 additional ad of stock to the cues to the unleashing 0:36:19.680 --> 0:36:22.160 of stock from the individual owners that have it right now, 0:36:22.239 --> 0:36:24.560 so it should balance out. But I will make one 0:36:24.680 --> 0:36:29.160 broad macro point very important. Most IPOs don't work. Most 0:36:29.160 --> 0:36:33.320 IPOs underperform in year one, and so to beat that 0:36:33.360 --> 0:36:37.880 those odds is relatively hard. Stocks take time to season, 0:36:38.040 --> 0:36:40.360 managements take time to season. This is not a company 0:36:40.400 --> 0:36:42.799 that has a lot of prior experience. 0:36:42.680 --> 0:36:45.720 But the executives have a lot of prior public market experience. 0:36:45.760 --> 0:36:48.120 Elon Musk for example, I mean when shotwell for years, 0:36:48.120 --> 0:36:51.160 the CEO has been talked about, not talked about as 0:36:51.239 --> 0:36:54.600 much anymore, but being like the adult in the room. Yes, 0:36:54.680 --> 0:36:57.439 and she is at SpaceX, So I think people could 0:36:57.440 --> 0:36:59.600 push back on the experienced part of it. 0:36:59.560 --> 0:37:02.000 That's a little that is fair. The Elon thing cuts 0:37:02.040 --> 0:37:04.879 both ways. At the five year chart on Tesla and 0:37:04.880 --> 0:37:06.560 tell me that thing has been evalue created for the 0:37:06.600 --> 0:37:08.239 last three years. It just hasn't. 0:37:08.560 --> 0:37:10.080 So there is is. 0:37:10.040 --> 0:37:12.000 Tesla the model we should be looking at Nick in 0:37:12.080 --> 0:37:14.120 terms of for SpaceX. So that's not fair. 0:37:14.520 --> 0:37:17.080 I think it's entirely fair because both are basically on 0:37:17.120 --> 0:37:19.759 a musk premium and a massive one. Tesla's going to 0:37:19.840 --> 0:37:22.600 earn maybe two bucks a share this year stock trades 0:37:23.239 --> 0:37:26.200 what two hundred times that, So you're talking about big 0:37:26.239 --> 0:37:28.280 valuations in both names. And I thought it was interesting, 0:37:28.320 --> 0:37:31.560 you know, looking at Tesla at one point five trillion 0:37:31.960 --> 0:37:34.240 and this, you know, call it one point nine two. 0:37:34.880 --> 0:37:37.400 You're talking about, you know, two very large companies based 0:37:37.440 --> 0:37:39.880 on one person's vision, but not a lot of cash flow. 0:37:40.560 --> 0:37:42.600 That's the common factor. And you can be a season 0:37:42.640 --> 0:37:44.319 management team, but I don't know any of those season 0:37:44.320 --> 0:37:46.800 manage team that can hold those together besides Elon's teams. 0:37:49.120 --> 0:37:51.320 Yeah, Ed, I want you do you have a question 0:37:51.320 --> 0:37:53.000 for Nick because I know you're gonna bring us after 0:37:53.040 --> 0:37:53.719 this segment, So. 0:37:53.760 --> 0:37:56.319 You know, thet is so interesting and like you know, 0:37:56.480 --> 0:37:59.640 we remind ourselves the over subscription actually, like you know, 0:37:59.640 --> 0:38:03.319 what's four x to five xover subscription doesn't even seem 0:38:03.360 --> 0:38:05.080 that world to me. Like you look at what's happening 0:38:05.120 --> 0:38:08.480 in China market for IPOs like twenty x. Sometimes I digress. 0:38:09.280 --> 0:38:12.239 There's a lot of evidence that SpaceX employees wanted to 0:38:12.239 --> 0:38:15.359 buy more shares. And the unusual difference with SpaceX is 0:38:15.400 --> 0:38:19.160 the secondary's market. They've had regular liquidity windows. Might that 0:38:19.280 --> 0:38:20.680 be a difference this time? 0:38:21.600 --> 0:38:22.680 It certainly could be. 0:38:22.719 --> 0:38:25.120 But everything's a function of price, Right, If this thing 0:38:25.160 --> 0:38:28.440 goes to four hundred, even the most ardent insider might 0:38:28.480 --> 0:38:30.600 be tempted to sell. So it's a function of price. 0:38:30.880 --> 0:38:33.879 I'm going to say if the stock tanks a little bit, 0:38:33.920 --> 0:38:36.960 it makes it cheaper for SpaceX to buy it and merge. 0:38:36.640 --> 0:38:38.040 The company very very quick. 0:38:38.680 --> 0:38:41.600 Many times SpaceX was the leader of the secondarase they 0:38:41.680 --> 0:38:44.800 bought back shares from employees and we never really reported 0:38:44.800 --> 0:38:48.240 on it and that was true at the time, So yeah, yeah. 0:38:48.040 --> 0:38:50.080 I just think there's just like so many moving aspects 0:38:50.080 --> 0:38:52.239 of this. Nicholas, thanks for jumping in here. We really 0:38:52.280 --> 0:38:54.880 appreciate it. The perspective in data was really helpful. Co 0:38:54.960 --> 0:38:59.240 founder Data Check Research, of course, joining us here in studio. 0:38:59.320 --> 0:39:01.759 We're going to continue with Ed Ludlow, host of Bloomberg 0:39:01.800 --> 0:39:02.759 Tech Are Thanks. 0:39:02.520 --> 0:39:04.600 To to Anthony Hughes, be sure to check out all 0:39:04.600 --> 0:39:04.839 of his. 0:39:04.840 --> 0:39:07.640 Reporting on the Bloomberg and at Bloomberg dot Com, a 0:39:07.680 --> 0:39:10.800 member of our trusted Bloomberg News team. 0:39:11.160 --> 0:39:13.960 Stay with us more from Bloomberg business Week Daily coming 0:39:14.040 --> 0:39:14.920 up after this. 0:39:18.880 --> 0:39:22.759 You're listening to the Bloomberg Business Week Daily Podcast. Catch 0:39:22.840 --> 0:39:25.480 us live weekday afternoons from two to five e's during 0:39:25.520 --> 0:39:28.920 this listen on Applecarplay and Android Otto with the Bloomberg 0:39:29.000 --> 0:39:31.719 Business app, or watch us live on YouTube. 0:39:32.160 --> 0:39:33.880 Let's get to someone who we talk to you a 0:39:33.880 --> 0:39:36.000 lot when it comes to all things Elon. He's owned 0:39:36.040 --> 0:39:40.080 and sold shows of Tesla, owned several Teslas, including the Cyberchuck. 0:39:40.080 --> 0:39:42.440 He's been a fan and critic of Elon. The person 0:39:42.480 --> 0:39:45.480 back with us, so great to have here on this day. 0:39:45.600 --> 0:39:48.600 Ross Gerber President CEO of Gerbert Kawasaki Wealth and Management 0:39:48.920 --> 0:39:53.360 Investment Management, joining us here in studio. 0:39:53.560 --> 0:39:58.000 Hey, Ross, uh are you I'm a SpaceX owner too? 0:39:58.080 --> 0:39:59.279 You didn't You didn't mention that? 0:39:59.440 --> 0:40:01.440 Well, that's yeah, I explained. 0:40:01.040 --> 0:40:03.160 So remind yes, explain away. 0:40:04.000 --> 0:40:07.080 Well, explain away. I got involved with this wonderful deal 0:40:07.120 --> 0:40:09.160 that was presented to me four years ago to invest 0:40:09.160 --> 0:40:11.719 in Twitter, and boy, oh boy, did we do great 0:40:11.760 --> 0:40:14.320 with that. Huh. So I had written down that stake 0:40:14.360 --> 0:40:17.800 in Twitter to about twenty five percent of its original investment, 0:40:18.320 --> 0:40:21.239 and then somehow Xai came and bought Twitter, and then 0:40:21.560 --> 0:40:26.799 somehow SpaceX XAI and now today you know, I've now 0:40:26.880 --> 0:40:29.720 made like over three times my money investing in Twitter. 0:40:29.760 --> 0:40:32.640 So you know, there is a thing called luck in 0:40:32.680 --> 0:40:34.160 the world, and I'm lucky. 0:40:34.239 --> 0:40:36.400 So you've tripled your money from four years ago and 0:40:36.719 --> 0:40:40.319 investing in the take private of what is now x 0:40:40.360 --> 0:40:43.480 and owned by Xai, which is part of SpaceX. Of course, 0:40:43.840 --> 0:40:48.040 what do you do with those with that part of ownership? 0:40:48.080 --> 0:40:50.080 Do you hold on Twitter? Do you sell it when 0:40:50.080 --> 0:40:50.319 you can? 0:40:50.400 --> 0:40:52.479 Well, I'm building a new pool, but that has nothing 0:40:52.520 --> 0:40:55.320 to do with my SpaceX. I want to continue and 0:40:55.360 --> 0:40:59.040 employ lots of people because it's fun. But no, I'm 0:40:59.080 --> 0:40:59.960 holding my space. 0:41:00.040 --> 0:41:01.680 Actual tool, an actual pool. 0:41:01.760 --> 0:41:05.040 I was thinking, I'm building an actual physical pool in 0:41:05.080 --> 0:41:08.520 the AI era. I'm taking my AI profits and doing 0:41:08.520 --> 0:41:14.000 something really worthwhile employing people to dig holes. But that said, 0:41:14.760 --> 0:41:16.800 you know, SpaceX is one of the most interesting companies 0:41:16.840 --> 0:41:19.280 I've ever seen, and we have such a unique viewpoint 0:41:19.320 --> 0:41:22.840 of SpaceX because we work with so many SpaceX clients 0:41:22.920 --> 0:41:25.600 and we're getting more all the time, and we've really 0:41:25.600 --> 0:41:28.560 been focusing on helping SpaceX employees because it's down the 0:41:28.560 --> 0:41:31.200 street from us here in Los Angeles, is kind of 0:41:31.200 --> 0:41:34.560 their main one of their main hubs, and so, you know, 0:41:35.200 --> 0:41:38.040 I've met some incredible people over the last several months 0:41:38.080 --> 0:41:43.960 doing incredible things. These are the highest caliber engineers in 0:41:44.000 --> 0:41:46.719 the world that have made our space program because it's 0:41:46.800 --> 0:41:52.000 really United States Space program just so amazingly unique and successful. 0:41:52.040 --> 0:41:53.759 So what we have in store for us over the 0:41:53.840 --> 0:41:56.200 next decade is really exciting. 0:41:56.440 --> 0:41:59.000 Hey, So, Ross just want to ask you, so you 0:41:59.080 --> 0:42:02.080 own this the stuff you're happy about that, will you 0:42:02.120 --> 0:42:04.040 continue owning it or do you think the. 0:42:04.000 --> 0:42:06.719 Valuation That's what I'm saying, I'm not selling it, you know, 0:42:07.040 --> 0:42:08.799 I got my ten year old kids sitting here because 0:42:08.800 --> 0:42:11.280 he's out of school, and when I start thinking about 0:42:11.360 --> 0:42:13.080 what his life is going to be like when he's 0:42:13.120 --> 0:42:15.840 only twenty, you know, like ten years from now, like 0:42:15.960 --> 0:42:18.080 space is just going to be something that's like I 0:42:18.160 --> 0:42:20.000 keep making this joke, it's like easier to go to 0:42:20.000 --> 0:42:23.200 space than New Jersey, you know. And so you know, 0:42:23.280 --> 0:42:24.960 the truth is, I think it's harder to go from 0:42:24.960 --> 0:42:26.600 New York to New Jersey than it will be in 0:42:26.640 --> 0:42:28.359 space to go to space in ten years. 0:42:28.680 --> 0:42:31.160 And Ross, to be clear, this is you Ross Gerbert 0:42:31.200 --> 0:42:33.520 personally as opposed to Gerba Kawasaki. 0:42:34.360 --> 0:42:37.480 That's credit. I personally own the shares in my firm. 0:42:37.880 --> 0:42:41.200 In our own firm account owned shares because when the 0:42:41.239 --> 0:42:44.839 Twitter deal came by, you know, Elon really didn't want 0:42:44.840 --> 0:42:47.000 to do the deal. So we didn't actually sell the 0:42:47.000 --> 0:42:49.120 deal to our clients because I was like, I can't 0:42:49.160 --> 0:42:51.160 sell this. The guy doesn't want to do it, you know, 0:42:51.320 --> 0:42:53.440 And so they basically called us the last night and 0:42:53.520 --> 0:42:55.480 was like you still want to invest because we're actually 0:42:55.480 --> 0:42:57.759 doing this, and so I just like wrote a check 0:42:57.840 --> 0:43:01.600 because it was Elon, you know. But but none of 0:43:01.600 --> 0:43:05.200 our clients have been able to participate in this well, 0:43:05.239 --> 0:43:08.160 fortunately and unfortunately because remember you are pretty bad. 0:43:08.280 --> 0:43:11.640 You didn't get an allocation or submit a bid for 0:43:11.680 --> 0:43:14.680 an allocation in the IPO or go into the open 0:43:14.719 --> 0:43:16.960 market today. I'm being mechanical, but I'm just. 0:43:17.640 --> 0:43:20.720 No, we haven't done open market purchases of SpaceX today 0:43:20.760 --> 0:43:23.560 because our firm does not buy IPOs for very good reasons, 0:43:23.719 --> 0:43:26.480 which I'm happy to talk about. Well, and then well, 0:43:26.520 --> 0:43:29.440 can I ask you, well, secondly, we did request IPO 0:43:29.480 --> 0:43:32.680 allocations for clients of ours that are at Fidelity and 0:43:32.719 --> 0:43:34.680 Schwab because we work with both of them, and they 0:43:34.960 --> 0:43:37.439 did provide. So some of our clients did get small 0:43:37.480 --> 0:43:42.920 allocations of SpaceX stock today as well, so the but 0:43:43.000 --> 0:43:46.440 those were unsolicited, you know, like these clients really wanted it. 0:43:46.560 --> 0:43:48.160 Yeah. Why. 0:43:48.239 --> 0:43:50.560 The reason that's insightful is like there are people listening 0:43:50.560 --> 0:43:53.520 to Bloomberg Business Week or watching bloom this Week that 0:43:53.560 --> 0:43:55.440 are in the same boat, right, and they're just thinking, like, 0:43:56.000 --> 0:43:57.320 you know, what, what did I do here? But the 0:43:57.400 --> 0:44:00.600 hypothesis presented to me by loads of people is they 0:44:00.600 --> 0:44:05.480 didn't sell their Tesla shares to get some liquidity to participate, 0:44:06.400 --> 0:44:09.920 in part because they just see that the Tesla SpaceX 0:44:09.960 --> 0:44:13.040 merger happening imminently, and so what would be the point 0:44:13.200 --> 0:44:15.920 I may ask where you stand on that idea today? 0:44:17.160 --> 0:44:19.759 Well, I very I tweeted again this morning. I mean, 0:44:19.960 --> 0:44:22.080 I know, how long does this take till they put 0:44:22.080 --> 0:44:25.320 these companies together? And then even Gwen shotwell today, didn't 0:44:25.440 --> 0:44:27.160 you know pooh pooh the idea when it was brought 0:44:27.200 --> 0:44:30.360 to and actually said it makes sense? So you know, 0:44:30.400 --> 0:44:32.400 we know this is going to happen at some point. 0:44:32.680 --> 0:44:34.120 And I think a lot of that has to do 0:44:34.200 --> 0:44:37.399 with what valuations SpaceX and Tesla really are to make 0:44:37.440 --> 0:44:40.440 this combination work for both sets of shareholders, so that 0:44:40.520 --> 0:44:44.080 doesn't create a lot of you know, lawsuits and other issues. 0:44:44.160 --> 0:44:47.240 So so I think it's it's definitely a foregone conclusion. 0:44:47.239 --> 0:44:50.080 Now I do agree with you that that props up 0:44:50.160 --> 0:44:53.000 Tesla stock because you know, people are like, well I 0:44:53.040 --> 0:44:57.359 did not say that. Well, okay. My feeling is it 0:44:57.400 --> 0:45:00.000 props up Tesla's stock because people don't want to say 0:45:00.080 --> 0:45:01.719 their Tesla if it's just going to get bought out 0:45:01.719 --> 0:45:04.319 by SpaceX anyways, you know, And so I do think 0:45:04.360 --> 0:45:07.759 that that helps Tesla, that the perception is that they 0:45:07.800 --> 0:45:09.800 will be acquired by SpaceX or merge. 0:45:09.920 --> 0:45:12.600 So so ross maybe in your view it works for investors, 0:45:12.640 --> 0:45:15.759 Does it work from an actual operations perspective? 0:45:15.920 --> 0:45:20.920 Oh? In fact, well, I would argue that this is 0:45:20.960 --> 0:45:23.960 really unfair to Tesla, and it's one of the real 0:45:24.120 --> 0:45:26.680 gripes I've had over the last several years is the 0:45:26.719 --> 0:45:30.400 way they took you know, Tesla's chips and Tesla's engineers 0:45:30.400 --> 0:45:34.560 and built Xai, which was the brains of Tesla's you know, 0:45:35.200 --> 0:45:38.319 optimist robot and full self driving. And then Elon goes 0:45:38.360 --> 0:45:40.640 on TV and says, this is the entire value of 0:45:40.680 --> 0:45:43.800 the company is based off if we can can succeed 0:45:43.840 --> 0:45:46.359 with full self driving. But yet the brains of full 0:45:46.400 --> 0:45:50.000 self driving isn't known by Tesla. Like that's super wrong. 0:45:50.400 --> 0:45:52.960 It just doesn't make any sense that I have a 0:45:53.000 --> 0:45:55.840 bunch of robots and cars that will not work without 0:45:55.840 --> 0:45:59.880 another company's technology. So Tesla in my mind, is worthless 0:46:00.280 --> 0:46:03.320 if it doesn't merge because it doesn't own the IP 0:46:03.640 --> 0:46:07.200 to the brains to their own products. Like, like, it 0:46:07.320 --> 0:46:08.600 just makes no sense. 0:46:09.800 --> 0:46:13.720 All right, speaking of the brains, the brains behind anything 0:46:13.840 --> 0:46:17.120 with Elon's universe is obviously Elon Musk can we talk 0:46:17.120 --> 0:46:20.920 a lot about risk to the company. We talk about governance, 0:46:20.960 --> 0:46:23.680 but we also just talk about, you know, how much 0:46:23.840 --> 0:46:25.120 what he does, his. 0:46:25.160 --> 0:46:27.600 Brain, his oddness, if you will. 0:46:27.680 --> 0:46:32.960 Some might say, you know, is what makes this company petricity. 0:46:33.280 --> 0:46:37.200 You're much better on this and on the governance and 0:46:37.239 --> 0:46:41.600 stock structure. Nelman Value Edge Advisors Vice chairman, joined the 0:46:41.600 --> 0:46:43.800 Closed team yesterday on Blueberg Television. 0:46:44.200 --> 0:46:46.680 Let's all listen up to what Neil had to say. 0:46:46.719 --> 0:46:47.239 Noill had to. 0:46:47.200 --> 0:46:50.439 Say, all of those protections that you talked about, the 0:46:50.480 --> 0:46:52.840 ability to vote, proxies, the ability to sell the stock, 0:46:52.880 --> 0:46:55.440 the ability to sue, all of those are there to 0:46:55.480 --> 0:46:59.279 reassure investors. Having independent directors on the board, all of 0:46:59.280 --> 0:47:01.560 those are there to re sure investors that their money 0:47:01.640 --> 0:47:04.920 is being taken care of in a principled way for 0:47:05.000 --> 0:47:07.400 their benefit, not for the benefit of the insiders. And 0:47:07.600 --> 0:47:13.120 all of those have been obliterated by this offering. You know, 0:47:14.440 --> 0:47:17.840 Ila Musk has appointed himself CEO for life. He's the 0:47:17.880 --> 0:47:19.879 only one who can remove himself, Not even his board 0:47:19.920 --> 0:47:21.359 of directors can remove him. 0:47:21.400 --> 0:47:22.880 He has all the voting control. 0:47:23.040 --> 0:47:26.840 He has basically built a moat with alligators around himself. 0:47:27.120 --> 0:47:29.360 And that's not good for shareholders. 0:47:30.840 --> 0:47:35.360 Nel Mio Value Edged Advisors Vice chairman on Blueberg Television yesterday. 0:47:36.040 --> 0:47:38.400 Ross my understanding that you were kind of laughing as 0:47:38.400 --> 0:47:39.200 you were listening to that. 0:47:40.360 --> 0:47:43.920 Well, you know, there's no companies that have ever been 0:47:44.000 --> 0:47:48.160 run like Tesla and SpaceX in the history of public companies, 0:47:48.560 --> 0:47:51.760 And so I find her outrage to be humorous because 0:47:51.960 --> 0:47:54.800 that's basically how it's worked for Tesla for the last 0:47:54.840 --> 0:47:58.080 fifteen years. And you know, the board is not independent. 0:47:58.239 --> 0:48:01.640 They do whatever Elon says. The pay packages are approved 0:48:01.640 --> 0:48:05.680 because index funds just push yes to whatever management puts forth. 0:48:05.920 --> 0:48:09.480 So Elon's taken advantage of a system where twenty percent 0:48:09.800 --> 0:48:13.360 of his companies owned by robots that don't make any decisions. 0:48:13.480 --> 0:48:17.160 There's nothing worse than Vanguard for shareholder rights. So if 0:48:17.200 --> 0:48:20.560 she wants to complain, she should be complaining about Vanguard, 0:48:20.840 --> 0:48:23.600 not Tesla. And the fact that Elon takes advantage of 0:48:23.640 --> 0:48:26.600 the fact that you know, there's basically going to be 0:48:26.680 --> 0:48:29.200 nobody but you know somebody like me who goes out 0:48:29.200 --> 0:48:32.520 on TV. But as far as trying to vote change 0:48:32.560 --> 0:48:35.879 into Tesla or SpaceX never going to happen. So does 0:48:35.920 --> 0:48:38.239 he take care of shareholders. Yeah, they've made a lot 0:48:38.280 --> 0:48:41.319 of money, So that's taking care of shareholders any way 0:48:41.360 --> 0:48:44.160 you do the math. Whether I vote proxies or not, 0:48:44.560 --> 0:48:47.279 what matters is whether I'm making money. And I've made 0:48:47.560 --> 0:48:50.279 over one hundred times of my money investing in Tesla, 0:48:50.360 --> 0:48:53.680 and so I just think, you know, when you invest 0:48:53.760 --> 0:48:56.040 with Elon, you have no rights. You get on the bus, 0:48:56.080 --> 0:48:58.279 you don't like the bus, get off the bus, but 0:48:58.560 --> 0:49:01.040 if you want to be on that bus. He has 0:49:01.160 --> 0:49:04.879 rewarded people who has done that, and that's why people 0:49:04.960 --> 0:49:08.640 are giving him such a ridiculously high valuation, is because 0:49:08.960 --> 0:49:11.759 he has rewarded shareholders in the past and in a 0:49:11.760 --> 0:49:15.400 way that very few CEOs have. So you know, I 0:49:15.480 --> 0:49:18.000 get the outrage and all that, then don't buy the stock. 0:49:18.280 --> 0:49:18.800 Russ may I. 0:49:19.400 --> 0:49:22.520 It was very clear in the S one, you know exactly. 0:49:22.120 --> 0:49:24.560 And like I'm just relying on recounting what was in 0:49:24.600 --> 0:49:28.040 the S one, right, the restriction that's paid placed on 0:49:28.160 --> 0:49:31.120 Musk's comp I'm just going to read it out because 0:49:31.239 --> 0:49:34.160 you know, it's the only way the audience will will 0:49:34.480 --> 0:49:36.239 come to have a sense of it. He has a 0:49:36.280 --> 0:49:40.120 one billion restricted cass B shares award. That's contingent a 0:49:40.239 --> 0:49:43.280 on market cat milestones. So if he achieves the market 0:49:43.280 --> 0:49:46.319 cat milestones through shareholders get rewarded. You say, but must 0:49:46.360 --> 0:49:50.600 compensation package is tied to establishing a permanent human colony 0:49:50.640 --> 0:49:55.000 on Mars with at least one million inhabitants. I don't 0:49:55.000 --> 0:49:56.520 want to give a long win a question, but you 0:49:56.560 --> 0:49:59.279 explained to the audience how you came to be a 0:49:59.280 --> 0:50:01.960 SpaceX investor and shareholder. 0:50:03.080 --> 0:50:03.880 That that goal. 0:50:04.160 --> 0:50:05.160 What does it mean to you? 0:50:07.640 --> 0:50:09.399 It means I might have a chance of not having 0:50:09.400 --> 0:50:13.480 to pay him the billion shares, you know, so so 0:50:13.560 --> 0:50:16.399 I kind of like that. You know, I don't think 0:50:16.600 --> 0:50:18.600 we're going to have a million people living on Mars, 0:50:18.680 --> 0:50:22.200 So you know, that's good news if you're a SpaceX 0:50:22.280 --> 0:50:24.680 yere older. And I could give you a lot of 0:50:24.719 --> 0:50:27.200 reasons that Elon might want to argue with me about. 0:50:27.400 --> 0:50:29.879 And I'm a more practical person, but I don't think 0:50:29.880 --> 0:50:33.120 you could talk a million people into going to Mars, 0:50:33.480 --> 0:50:37.440 you know, like, unless Mars looks a lot like Hawaii, 0:50:37.920 --> 0:50:40.640 I don't think people want to go there, and Mars 0:50:40.719 --> 0:50:43.759 doesn't look like Hawaii. So I don't know. I don't 0:50:43.760 --> 0:50:48.520 know who's moving to Marsh by the way, it's far 0:50:48.560 --> 0:50:49.760 away and there's no air. 0:50:49.800 --> 0:50:52.600 Ros Gerbert, president and CEO of Gerber Kawasaki Wealth and 0:50:52.600 --> 0:50:56.480 Investment Management. I did make that that point earlier in 0:50:56.480 --> 0:50:59.680 our last hour about when people compared Mars to potentially 0:50:59.680 --> 0:51:01.879 being then California. I pushed back a little bit better. 0:51:02.360 --> 0:51:07.080 Yeah, I'm not moving from here for anything social. 0:51:08.480 --> 0:51:10.840 I still think he's going to put Optimus robots on 0:51:11.040 --> 0:51:11.800 in one million. 0:51:11.960 --> 0:51:14.040 Maybe that's what I think though, that's what I think. 0:51:14.520 --> 0:51:17.040 I think the robots are are the ones doing the 0:51:17.040 --> 0:51:19.320 work in space and going to Mars. 0:51:19.520 --> 0:51:21.600 So so Ross, I want to put aside the question 0:51:21.680 --> 0:51:24.719 of of sort of governance right now and these these 0:51:24.760 --> 0:51:27.880 pay packages and just get back to your view of 0:51:27.880 --> 0:51:32.359 of SpaceX shares right now. You said gerber Kawasaki does 0:51:32.400 --> 0:51:35.080 not buy on the first day of IPOs. What restrictions 0:51:35.080 --> 0:51:37.319 do you have or have you put out? And it's 0:51:37.320 --> 0:51:39.920 sort of a rules based buying when it comes to IPOs. 0:51:39.960 --> 0:51:43.759 And when would you start getting your clients in even 0:51:43.800 --> 0:51:45.399 if they're not, you know, asking for. 0:51:45.360 --> 0:51:48.319 It, No, they're asking for it. There are some of them. 0:51:49.040 --> 0:51:51.400 We've talked to a lot of wealth managers lately who 0:51:51.480 --> 0:51:55.399 have said some people want it badly. Some people want 0:51:55.440 --> 0:51:58.120 nothing to do with it, Like we've had three examples 0:51:58.120 --> 0:51:59.520 of that recently this week on air. 0:52:00.440 --> 0:52:03.360 Yeah, you know, and that's we have so many clients. 0:52:03.360 --> 0:52:07.920 We have all those examples, right, what I think because 0:52:07.960 --> 0:52:09.680 the way my firm works, you know, we don't tell 0:52:09.719 --> 0:52:11.680 people no, you know, like if a client's like, I 0:52:11.719 --> 0:52:13.920 really want to do this, we don't say no. You know. 0:52:13.960 --> 0:52:16.400 It's our job to advise our clients. So we advise 0:52:16.480 --> 0:52:19.120 them of the risks of it, and then we'll execute 0:52:19.320 --> 0:52:22.120 the transactions as unsold if they want to, if they 0:52:22.120 --> 0:52:24.200 really want to do that, and we've you know, would 0:52:24.280 --> 0:52:26.440 do that now we I haven't done that today for 0:52:26.520 --> 0:52:29.560 anybody because I've talked them out of it, you know, 0:52:31.239 --> 0:52:34.200 because they listen to my advice, which is IPOs are 0:52:34.239 --> 0:52:37.120 really difficult, okay. And I've been trading for thirty two 0:52:37.239 --> 0:52:41.560 years and idid dot com and I I trade billions 0:52:41.600 --> 0:52:45.880 of dollars. So just from my experience, it's really really 0:52:46.040 --> 0:52:49.680 hard to make binary decisions. Like I'm putting one hundred 0:52:49.680 --> 0:52:52.680 thousand dollars in my retirement money into SpaceX today and 0:52:52.719 --> 0:52:54.680 that's it, and I will never look at it for 0:52:54.760 --> 0:52:57.400 ten years because that's just not what investors do. So 0:52:57.440 --> 0:52:59.800 if you were able to do that, I would say, Okay, 0:53:00.120 --> 0:53:03.000 you know, buy the ipoy, pay up for it, but 0:53:03.320 --> 0:53:06.200 in ten years you'll be happy. But nobody actually does that. 0:53:06.239 --> 0:53:07.919 What happens is they look at their account in six 0:53:07.960 --> 0:53:10.680 months and it's down thirty percent, and then they panic 0:53:10.680 --> 0:53:12.440 and they sell it right before it goes back up. 0:53:12.800 --> 0:53:18.120 And so investor psychology and behavior makes IPOs extremely difficult 0:53:18.120 --> 0:53:20.840 because of the volatility. So I don't know what the 0:53:20.840 --> 0:53:23.120 market's going to do over the next twelve months, let's say, 0:53:23.400 --> 0:53:25.799 and you know, and then you've got a very high 0:53:25.800 --> 0:53:29.440 priced IPO that has no pe ratio, and then maybe 0:53:29.440 --> 0:53:32.759 markets go down for some reason. Well, SpaceX is going 0:53:32.800 --> 0:53:34.680 to go down more than the market, And if the 0:53:34.719 --> 0:53:37.280 market stays the same or goes up, there's the potential 0:53:37.320 --> 0:53:40.160 that SpaceX stays the same or also goes up. But 0:53:40.239 --> 0:53:43.239 what I say is how much upside can you get 0:53:43.280 --> 0:53:46.600 if you buy the stock today until this company actually 0:53:46.640 --> 0:53:50.600 produces earnings, which might be three to five years from now. 0:53:51.120 --> 0:53:54.400 So you've got plenty of time to get into SpaceX. 0:53:54.440 --> 0:53:56.799 So if you really really want it, what I tell 0:53:56.840 --> 0:53:59.719 people is buy twenty percent of what you want to 0:53:59.760 --> 0:54:02.239 buy today. If it's ten thousand dollars in SpaceX, you 0:54:02.280 --> 0:54:04.799 buy two thousand dollars today, and then you wait a 0:54:04.840 --> 0:54:06.680 month and you buy another two thousand dollars, and you 0:54:06.719 --> 0:54:08.879 wait another month, and you get in over the next 0:54:08.880 --> 0:54:11.560 five months. But what I would really say is wait 0:54:11.920 --> 0:54:15.200 till the lockups expire. Wait. There's a lot of liquidity, 0:54:15.239 --> 0:54:17.600 and a lot of people want to get this liquidity. 0:54:17.719 --> 0:54:20.399 They've worked at SpaceX for a very long time now, 0:54:20.440 --> 0:54:22.080 they're not going to be quitting, and they're not this 0:54:22.160 --> 0:54:23.759 and that, but they want to buy a house in 0:54:23.920 --> 0:54:26.120 LA And a house in LA costs two to three 0:54:26.120 --> 0:54:28.359 million just to get in, and these people are living 0:54:28.400 --> 0:54:31.000 in apartments. You see what I'm saying. So they're going 0:54:31.080 --> 0:54:33.120 to sell some of their stock to buy a house, 0:54:33.400 --> 0:54:35.359 and they're going to sell some of their stock so 0:54:35.400 --> 0:54:38.279 that they have some financial security, which is what we're 0:54:38.280 --> 0:54:41.440 advising them. But many of the employees that SpaceX are 0:54:41.440 --> 0:54:43.960 not selling their stock. And I just want to make 0:54:44.000 --> 0:54:46.640 it very clear. Many of them. These are the people 0:54:46.680 --> 0:54:49.520 who believe in their mission and they're working extremely hard. 0:54:49.560 --> 0:54:52.040 And after meeting many of these people, I believe in 0:54:52.080 --> 0:54:55.120 their mission and Elon gets too much credit. I just 0:54:55.160 --> 0:54:58.239 want to say this, it's not Elon Musk that's made 0:54:58.320 --> 0:55:01.560 SpaceX successful. It's the people there. Elon must is a 0:55:01.600 --> 0:55:03.920 visionary and he guides the company. But the truth of 0:55:03.960 --> 0:55:07.000 the matter is he does not really run SpaceX. Right, 0:55:07.120 --> 0:55:08.920 the people running SpaceX are excellent. 0:55:09.040 --> 0:55:11.840 Ross thirty seconds left, though, we do think about succession, 0:55:12.040 --> 0:55:15.680 so does Elon? Does it become even more important on 0:55:15.719 --> 0:55:18.560 this day where we continue to see the Elon universe 0:55:18.760 --> 0:55:21.799 get bigger and bigger that there is a succession plan 0:55:21.840 --> 0:55:22.280 in place? 0:55:22.440 --> 0:55:25.480 Is there one that you know of just quickly. 0:55:25.360 --> 0:55:28.960 See see at SpaceX. Yes, I think if Elon died tomorrow, 0:55:29.080 --> 0:55:32.759 SpaceX would be fine. Actually, SpaceX has great management and 0:55:32.800 --> 0:55:36.680 they've been very independent for a long time. And many 0:55:36.680 --> 0:55:39.359 of the employees and I'm not gonna, you know, say 0:55:39.400 --> 0:55:43.000 where they were divisions they were. They don't like Elon either, Okay, 0:55:42.719 --> 0:55:46.480 they they you know, having a mission like going to 0:55:46.520 --> 0:55:48.600 Mars or going to the Moon or building a starship 0:55:49.600 --> 0:55:52.919 is what motivates people. A lot of what Elon does 0:55:53.160 --> 0:55:56.799 hurts SpaceX and hurts the company. So so SpaceX has 0:55:56.840 --> 0:56:00.880 have much better management team than Tesla when it to secession, 0:56:01.120 --> 0:56:04.120 and I'm much more confident about his success even if 0:56:04.760 --> 0:56:05.840 Elon isn't involved. 0:56:05.880 --> 0:56:08.520 Well, some great color and context on all things SpaceX 0:56:08.560 --> 0:56:10.520 and Elon, as he always does. 0:56:10.640 --> 0:56:13.160 Ross, have a great weekend. Thank you so much. Ross Gerber, 0:56:13.440 --> 0:56:15.719 President CEO of Gerbert Kawasaki. 0:56:15.120 --> 0:56:17.920 Wealth and Investment Management, Joining us from Los Angeles. 0:56:18.800 --> 0:56:24.279 This is the Bloomberg Business Weekdaily podcast, available on Apple, Spotify, 0:56:24.400 --> 0:56:28.480 and anywhere else you get your podcasts. Listen live weekday 0:56:28.520 --> 0:56:32.680 afternoons from two to five pm Eastern on Bloomberg dot com, 0:56:32.800 --> 0:56:36.640 the iHeartRadio app, tune In, and the Bloomberg Business App. 0:56:36.800 --> 0:56:39.680 You can also watch us live every weekday on YouTube 0:56:39.920 --> 0:56:42.080 and always on the Bloomberg terminal