WEBVTT - SpaceX Tender Offer Said to Boost Value to $175 Billion-Plus 0:00:01.360 --> 0:00:05.680 This is Bloomberg Business Wait inside from the reporters and 0:00:05.880 --> 0:00:09.440 editors who bring you America's most trusted business magazine, plus 0:00:09.520 --> 0:00:13.440 gloom O Business Finance and tech news. The Bloomberg Business 0:00:13.440 --> 0:00:19.000 Week Podcast with Carol Messer and Tim Stenebeck from Bloomberg Radio. 0:00:20.440 --> 0:00:22.880 Jessa Nice for filling out the finishing out the day 0:00:22.920 --> 0:00:24.960 with some pretty good moves to the upside here in 0:00:25.000 --> 0:00:25.439 the after your. 0:00:25.360 --> 0:00:29.040 Markets, and then we'll going ahead to tomorrow jobs reports. 0:00:29.120 --> 0:00:30.560 Yes, exactly, it is. 0:00:30.600 --> 0:00:32.960 Obviously we've talked a lot about the blackout period for 0:00:33.000 --> 0:00:35.880 FED speakers this week, but we do have the jobs 0:00:35.880 --> 0:00:39.680 report coming tomorrow, so that will be very much on 0:00:39.800 --> 0:00:43.639 investors radars. Also, average hourly earnings will be a part 0:00:43.680 --> 0:00:45.640 of that report, which we know FED shared Jerome Powell 0:00:45.760 --> 0:00:48.480 and other policy makers are going to watch very closely 0:00:48.960 --> 0:00:52.640 ahead of their decision next Wednesday. And also ahead of 0:00:52.680 --> 0:00:56.760 that decision on Wednesday too, we have CPI next Tuesday fall, 0:00:56.880 --> 0:01:00.840 so still a number of indicators ahead of the Fed's decisions, 0:01:00.880 --> 0:01:02.160 so things we need to keep our eyes on. 0:01:02.280 --> 0:01:05.000 Yeah, and just taking a look at the nonfarm payrolls, 0:01:05.040 --> 0:01:08.160 one hundred and eighty five thousand is a consensus tomorrow, 0:01:08.160 --> 0:01:09.840 and that's up from one hundred and fifty thousand the 0:01:09.880 --> 0:01:13.000 prior period. So we'll keep that in mind. And average 0:01:13.040 --> 0:01:16.399 hourly earnings on a year of a year basis four 0:01:16.440 --> 0:01:18.880 percent increase, be a little bit of a decline from 0:01:18.920 --> 0:01:22.039 four point one percent last period, but still some pretty 0:01:22.040 --> 0:01:24.360 solid numbers. A little bit slower than what we had seen. 0:01:24.440 --> 0:01:27.440 But you know, I mean the unemployment rate three point 0:01:27.520 --> 0:01:29.640 nine percent is kind of the forecast there, and that 0:01:29.680 --> 0:01:32.399 sounds pretty good. But Michael McKee, he looks at it 0:01:32.440 --> 0:01:34.560 a little bit more, appeels a little bit more of 0:01:34.560 --> 0:01:35.000 the layers. 0:01:35.200 --> 0:01:37.479 That is the best to do it exactly right. 0:01:37.560 --> 0:01:40.720 So Michael, what are you going to be looking at tomorrow? 0:01:40.840 --> 0:01:44.400 And you know, when we get all this data on 0:01:44.640 --> 0:01:47.440 just kind of the labor market in general. 0:01:47.640 --> 0:01:51.720 Well, I think the market is going to focus, assuming 0:01:51.760 --> 0:01:56.200 we get somewhere near consensus number for job creation, you'll 0:01:56.240 --> 0:01:59.520 focus on unemployment and whether that goes up and why 0:02:00.240 --> 0:02:03.280 if it does, or more people coming into the labor force, 0:02:03.320 --> 0:02:06.400 which is not necessarily a bad thing, or are we 0:02:06.520 --> 0:02:07.640 starting to let people go. 0:02:07.760 --> 0:02:09.480 That'll be the primary question. 0:02:09.560 --> 0:02:12.200 And then people will be looking at average hourly earnings 0:02:12.200 --> 0:02:15.800 because they want to see if earnings growth is slowing 0:02:15.840 --> 0:02:18.840 down enough that the FED doesn't have to be worried 0:02:18.880 --> 0:02:23.200 about it continuing to contribute to inflation. We're forecast to 0:02:23.280 --> 0:02:25.400 hit four percent on a year over year basis, and 0:02:25.440 --> 0:02:29.280 the Fed thinks sustainable is about to three and a half, 0:02:29.560 --> 0:02:30.400 So getting close. 0:02:30.520 --> 0:02:33.880 Yep. So those are kind of the numbers that most 0:02:33.880 --> 0:02:35.480 people will be focusing on tomorrow. 0:02:36.080 --> 0:02:40.680 Well that report adjust anything for the Fed's decision next 0:02:40.680 --> 0:02:43.440 week or do you feel like that's pretty much already 0:02:43.440 --> 0:02:45.240 a done deal and it's more of just the forecast, 0:02:45.320 --> 0:02:47.200 the quarterly forecast, and obviously the dot plots we're going 0:02:47.280 --> 0:02:48.400 to come with that decision. 0:02:48.480 --> 0:02:52.639 Yeah, it's pretty much a done deal the Fed. It 0:02:52.680 --> 0:02:54.520 would take something. 0:02:54.200 --> 0:02:57.480 Going horribly wrong tomorrow and I'd be back on this 0:02:57.560 --> 0:03:02.160 show try to explain this time tomorrow the Fed is 0:03:02.600 --> 0:03:06.040 all but signaled they're done raising rates. It would it 0:03:06.080 --> 0:03:08.440 would require a lot for them to do something at 0:03:08.440 --> 0:03:11.560 this meeting, and probably not as much in tomorrow's report. 0:03:11.360 --> 0:03:13.040 As it would be the CPI next week. 0:03:13.240 --> 0:03:15.800 Right, So I don't think you're gonna have to worry 0:03:15.800 --> 0:03:21.320 about the Fed right out of tomorrow's report. It'll spur 0:03:21.440 --> 0:03:24.880 conversations about next year and when the fight might or 0:03:24.960 --> 0:03:27.639 might not cut rates, but not anything for next week. 0:03:28.160 --> 0:03:30.520 So the FED, I'm not sure what the right word is, 0:03:30.520 --> 0:03:34.519 but I guess they're prepared for the unemployment rate inch 0:03:34.560 --> 0:03:38.040 a little bit higher. Is there a point where it 0:03:38.080 --> 0:03:41.000 gets beyond where they're comfortable? Does it like have a 0:03:41.040 --> 0:03:44.240 five handle? And then they said, oh boy, and then 0:03:44.240 --> 0:03:45.600 they really need to be maybe a little bit more 0:03:45.600 --> 0:03:46.320 aggressive here. 0:03:46.600 --> 0:03:49.080 Well, they were forecasting four point one percent by the 0:03:49.160 --> 0:03:51.720 end of the year, so we're sort of in the 0:03:51.840 --> 0:03:52.960 range and can come in. 0:03:52.960 --> 0:03:53.640 Lower than that. 0:03:54.440 --> 0:03:57.280 But if it got above, if we had a jump 0:03:57.320 --> 0:03:58.880 like we did a couple of months ago of about 0:03:58.880 --> 0:04:01.720 three tenths and we went up to four point one 0:04:01.760 --> 0:04:04.520 percent from three point nine, or we went up to 0:04:04.560 --> 0:04:05.160 four point. 0:04:05.040 --> 0:04:06.440 Two, that would get their attention. 0:04:06.720 --> 0:04:09.360 If we got over four and a half, that would 0:04:09.440 --> 0:04:14.440 start to raise concerns there. The speed of it and 0:04:14.480 --> 0:04:17.719 the composition of it would also matter to the FED, 0:04:17.880 --> 0:04:20.039 and what else is happening with inflation. 0:04:20.560 --> 0:04:22.120 They are expecting. 0:04:23.080 --> 0:04:27.320 Unemployment to rise because their job is to squish down 0:04:27.360 --> 0:04:30.760 on demand, as if that, in theory, should lead to 0:04:30.960 --> 0:04:36.440 fewer employees needed, and so unemployment rises, but the speed 0:04:36.680 --> 0:04:39.880 would concern them if it was quick, and if it 0:04:39.920 --> 0:04:41.800 started to get too high, of course, by that time 0:04:41.839 --> 0:04:43.400 they would probably already be acting. 0:04:44.080 --> 0:04:46.440 I'm glad you're here because something I've been thinking about 0:04:46.560 --> 0:04:50.440 is the rotation for FED voting members each year. So 0:04:50.720 --> 0:04:54.040 Austin Goolsby, Patrick Harker, Luis Logan, and then Neil Kashkari 0:04:54.080 --> 0:04:56.640 currently voting members this year, but won't be next year. 0:04:56.680 --> 0:04:59.960 So then we're going to have Loredemester, Thomas Barkin, Rafael Boston, 0:05:00.160 --> 0:05:02.640 and then Mary Daily will come back as voting members 0:05:02.640 --> 0:05:05.040 for next year. How do you think this when you 0:05:05.120 --> 0:05:08.360 have those rotations, Because in recent years, especially as inflation 0:05:08.560 --> 0:05:10.960 was very elevated, it seemed like everybody had to have 0:05:10.960 --> 0:05:13.880 these unanimous votes as far as trying to tame inflation. 0:05:14.080 --> 0:05:16.360 But when you're going into a year and in stock 0:05:16.400 --> 0:05:18.520 investors are betting that they're going to be rate cuts, 0:05:18.640 --> 0:05:20.880 when you have a rotation changing like this, how do. 0:05:20.880 --> 0:05:21.560 You view that? 0:05:21.839 --> 0:05:24.040 Are things really going to be that different? Could that 0:05:24.120 --> 0:05:27.280 potentially change the expectations for how soon or later rate 0:05:27.320 --> 0:05:28.600 cuts could potentially come. 0:05:29.200 --> 0:05:32.039 I think people make too much of that. The people 0:05:32.040 --> 0:05:36.800 who are coming on are generally centrists, with the exception 0:05:36.880 --> 0:05:40.279 of Loretta Master, and she's leaving in June. 0:05:40.720 --> 0:05:44.040 So I don't know that we'll see a lot of pushback. 0:05:44.600 --> 0:05:47.840 You're right. We get a more unanimity when it's very 0:05:47.880 --> 0:05:50.599 obvious what the FED should be doing, which. 0:05:50.440 --> 0:05:52.640 For the last year or so has been very obvious 0:05:53.160 --> 0:05:55.120 that they should be raising rates. And when you get 0:05:55.160 --> 0:05:57.120 into a situation where it's a close call should we 0:05:57.120 --> 0:05:59.320 hold or should we cut rates, then you could see 0:05:59.360 --> 0:06:03.560 a dissenter to from whatever it is the FED decides 0:06:03.600 --> 0:06:05.720 to do. But I think we're not going to see 0:06:05.720 --> 0:06:12.080 any major splits among them. They're going to move slowly, 0:06:12.279 --> 0:06:16.440 even unless we have a recession, they're going to move slowly. 0:06:16.520 --> 0:06:20.039 So even if they do, it's not going to force 0:06:20.120 --> 0:06:22.800 a lot of people into an uncomfortable vote. 0:06:23.520 --> 0:06:27.160 So the University of Michigan some good football players there. 0:06:27.760 --> 0:06:28.960 So they'll tell you yes. 0:06:29.640 --> 0:06:31.960 And they also have some good economic data and they 0:06:32.000 --> 0:06:35.720 put that out and expectations and inflation outlook and things 0:06:35.760 --> 0:06:39.560 like that. Do economists do they care? Does a market 0:06:39.640 --> 0:06:41.280 really care about some of this data? 0:06:42.560 --> 0:06:45.960 The market doesn't really care about the and the FED 0:06:46.000 --> 0:06:48.560 doesn't really care about the sentiment indicator. 0:06:49.240 --> 0:06:51.600 How people are feeling. Alan Greenspan summed it. 0:06:51.600 --> 0:06:54.040 Up very well years ago when he said, we watch 0:06:54.080 --> 0:06:55.360 what they do, not what they say. 0:06:55.720 --> 0:06:57.080 I'm talking about consumers. 0:06:58.480 --> 0:07:03.240 The expectations for inflation have become moderately more important because 0:07:03.279 --> 0:07:06.880 the FED has made a big deal out of inflation expectations, 0:07:06.960 --> 0:07:09.920 being the anchor for inflation, and they don't want to 0:07:09.920 --> 0:07:13.280 see expectations rise too much, both on the consumer or 0:07:13.320 --> 0:07:17.480 market side. Market side right now is looking at two 0:07:17.560 --> 0:07:19.840 to two and a half percent inflation out four or 0:07:19.840 --> 0:07:22.520 five years, which is perfect for the Fed. 0:07:22.840 --> 0:07:26.559 But Americans are looking at four and a half percent now. 0:07:27.320 --> 0:07:32.760 The sentiment indexes people always overrate what inflation is, and 0:07:32.760 --> 0:07:34.880 if you go ask any American, they'll probably tell you 0:07:34.880 --> 0:07:38.360 now it's six or seven percent, just because they don't know. 0:07:38.320 --> 0:07:39.320 What inflation is. 0:07:40.240 --> 0:07:43.200 But even if you allow for that, it's a little 0:07:43.240 --> 0:07:47.040 bit higher than both the FED would like to see 0:07:47.120 --> 0:07:50.880 and that you would expect, given the fact that food 0:07:50.920 --> 0:07:54.920 prices have stabilized, gasoline prices are way down, and yet 0:07:54.960 --> 0:07:58.520 people are still thinking there's a lot of inflation. They're 0:07:58.560 --> 0:08:02.400 looking at price level rather than the rate of change, 0:08:03.000 --> 0:08:05.560 which the FED looks at. So there is kind of 0:08:05.560 --> 0:08:09.000 a difference there. But as long as people don't start 0:08:09.000 --> 0:08:10.680 thinking inflation is going to go so high they have 0:08:10.680 --> 0:08:13.040 to march into the boss's office and ask for money. 0:08:13.720 --> 0:08:17.240 Of course, we would never do no, could never never. 0:08:17.480 --> 0:08:20.119 Hey, you know, I was out gallivanting in the city, 0:08:20.680 --> 0:08:23.400 Midtown yesterday afternoon, yesterday evening. 0:08:23.160 --> 0:08:23.840 For your birthday. 0:08:23.960 --> 0:08:26.800 Yes, people, I did not know big birth People were 0:08:26.800 --> 0:08:28.520 out about spending. 0:08:28.960 --> 0:08:30.080 Streets were packed. 0:08:30.400 --> 0:08:32.720 You couldn't get near the Christmas Tree Rockefeller Center. I mean, 0:08:32.720 --> 0:08:35.760 people were out. It feels like the consumer this is 0:08:35.960 --> 0:08:36.880 pretty good shape. 0:08:36.920 --> 0:08:41.920 I don't know what people tell pollsters that the economy 0:08:41.960 --> 0:08:44.320 is lousy, but my situation is good. 0:08:44.920 --> 0:08:45.840 People have jobs. 0:08:45.920 --> 0:08:51.720 I mean, we have ninety seven percent employment, and so 0:08:52.240 --> 0:08:53.720 it isn't a terrible time. 0:08:54.040 --> 0:08:56.680 And it's kind of there's more and more talk of 0:08:56.720 --> 0:08:58.560 this as like poor Joe Biden. 0:08:58.600 --> 0:09:01.240 I mean, he's presiding over a good economy and people 0:09:01.280 --> 0:09:05.600 don't believe it for a variety of reasons. But things 0:09:05.640 --> 0:09:09.479 aren't bad right now. So Americans on their own, individually 0:09:09.880 --> 0:09:12.839 are quite happy to go out and buy Paula hot 0:09:12.920 --> 0:09:14.480 chocolate on his birthday exactly. 0:09:14.920 --> 0:09:17.560 That's how that's how we roll out there all right, 0:09:17.679 --> 0:09:19.880 mister McKay, thank you very much. We appreciate Michael McKee, 0:09:19.920 --> 0:09:24.080 International Economics and Policy correspondent and Jess. I mean again, 0:09:24.120 --> 0:09:27.080 the restaurants are packed, the bars are packed. The Fifth 0:09:27.120 --> 0:09:30.079 Avenue you could barely walk down. I mean that's how 0:09:30.120 --> 0:09:30.680 crazy it was. 0:09:30.880 --> 0:09:31.080 You know. 0:09:31.120 --> 0:09:34.160 We'll get actually an update on retail sales next Thursday, 0:09:34.160 --> 0:09:36.200 so the day after the FED decision for the month 0:09:36.200 --> 0:09:38.600 of November. So this will give us a read, especially 0:09:38.640 --> 0:09:40.719 on the holiday spinning. We already got a lot of 0:09:40.720 --> 0:09:43.600 that Cyber Monday and Black Friday data that we're at records, 0:09:43.600 --> 0:09:45.320 so we know it was really strong last month. But 0:09:45.520 --> 0:09:47.320 that's going to be interesting to see what that data 0:09:47.320 --> 0:09:48.280 looks like for the consumer. 0:09:48.320 --> 0:09:48.560 Paul. 0:09:48.720 --> 0:09:51.920 Yeah, and I'll shout out to the tree folks. Yeah, 0:09:52.080 --> 0:09:52.760 Rockefeller Center. 0:09:52.840 --> 0:09:53.559 It's amazing. 0:09:53.920 --> 0:09:55.079 I mean, we just worked by it. 0:09:54.920 --> 0:09:55.640 It looks awesome. 0:09:55.960 --> 0:09:59.160 We've got a tree, yes, big is that one. 0:09:59.400 --> 0:10:01.120 So if you're around the you know, the Bloomberg h 0:10:01.160 --> 0:10:02.520 you could come check out our tree in our court. 0:10:03.040 --> 0:10:04.200 Aren't cool? This is Bloomberg. 0:10:04.840 --> 0:10:08.400 You're listening to the Bloomberg Business Week podcast. Catch us 0:10:08.440 --> 0:10:11.760 live weekday afternoons from three to six Eastern listen on 0:10:11.840 --> 0:10:15.880 Bloomberg dot com, the iHeartRadio app and the Bloomberg Business app, 0:10:16.160 --> 0:10:24.839 or watch us live on Youtubey Miss space Man, please 0:10:24.960 --> 0:10:28.240 thank you anything around. 0:10:30.480 --> 0:10:36.199 Always the best tunes. 0:10:33.840 --> 0:10:37.760 The producer here, I mean pick at the music today. 0:10:37.600 --> 0:10:41.480 Always always, they always bring the musical game here. All right, 0:10:41.600 --> 0:10:43.280 just met Paul Sweeney. We are live here in on 0:10:43.280 --> 0:10:46.800 our Bloomberg Interactive Broker Studio, streaming live on YouTube, so 0:10:46.800 --> 0:10:48.320 you can hand over to YouTube dot com and search 0:10:48.360 --> 0:10:51.679 Bloomberg Radio. We're sitting in for Tim Stenwick and Carol Masser. Uh, 0:10:51.800 --> 0:10:54.680 let's talk. One of the really cool news items of 0:10:54.880 --> 0:10:58.839 the day. SpaceX tender offers said to boost value to 0:10:58.960 --> 0:11:01.679 one hundred and seven twenty five billion dollars, So I 0:11:01.679 --> 0:11:03.680 guess they're going to be tendering for some of the 0:11:03.720 --> 0:11:07.400 shares owned by employees. And the tender value again implies 0:11:07.440 --> 0:11:09.560 evaluation one hundred and seventy five billion. That's a lot 0:11:09.600 --> 0:11:13.040 for a space company, which is pretty cool. Katie Roof joins, 0:11:13.040 --> 0:11:15.319 and she's a VC deals reporter for Bloomberg New She 0:11:15.400 --> 0:11:18.040 joins us on zoom from Los Angeles. I know, Katie, 0:11:18.040 --> 0:11:20.440 you are used to numbers like this out there in 0:11:20.520 --> 0:11:23.679 Silicon you know, in California and LA and Silicon Valley. 0:11:23.840 --> 0:11:27.040 Talk to us about what SpaceX is doing here and 0:11:27.360 --> 0:11:28.320 how this is going to work. 0:11:29.480 --> 0:11:32.040 Sure, and so this is actually a record for a 0:11:32.160 --> 0:11:35.400 US private venture backed company, one hundred and seventy five billion. 0:11:35.840 --> 0:11:39.560 It's ninety five dollars a share for the tender offer. 0:11:40.520 --> 0:11:42.840 Just six months ago, they were valued at one hundred 0:11:42.840 --> 0:11:45.520 and fifty billion. A year ago, they were valued at 0:11:45.520 --> 0:11:48.720 one hundred and thirty seven billion. So this is a 0:11:48.800 --> 0:11:52.720 big increase for an already highly valued company. And it 0:11:52.800 --> 0:11:56.000 really is fucking the trend because as we've seen in 0:11:56.000 --> 0:11:59.480 Silicon Valley the last couple of years, the companies are 0:12:00.200 --> 0:12:04.120 struggling to maintain their billion dollar valuation. But people that 0:12:04.200 --> 0:12:06.480 I talk to are big believers in SpaceX. 0:12:07.000 --> 0:12:09.760 So talk to us about sort of the issues moving 0:12:09.840 --> 0:12:14.080 forward for SpaceX because they're in a unique situation right now. 0:12:16.120 --> 0:12:19.559 Sure, so they have two core businesses. They have their 0:12:19.720 --> 0:12:24.000 rocket launching business, but they also have Starlink, their internet 0:12:24.120 --> 0:12:28.080 business that's satellite related, and so they a lot of 0:12:28.120 --> 0:12:30.920 the investors tell me that the reason that they're investing 0:12:31.000 --> 0:12:35.199 is because they are really bullish on Starlink. It's our understanding, 0:12:35.200 --> 0:12:38.320 and we've reported that Starlink is eventually going to be 0:12:38.400 --> 0:12:42.040 spawn off of SpaceX and go public someday, and so 0:12:42.160 --> 0:12:44.200 a lot of the investors are trying to get in 0:12:44.240 --> 0:12:44.560 on that. 0:12:45.559 --> 0:12:50.760 Do either of you know where they launched their rockets from? No, 0:12:51.240 --> 0:12:55.400 Boca Chica, Texas? Wait? Really, yes, it's literally if you. 0:12:55.360 --> 0:12:58.040 Go to Boca Chica, it's. 0:12:57.360 --> 0:13:00.280 Literally the most southern part of Texas. Is like, right now, 0:13:00.280 --> 0:13:00.800 I feel. 0:13:00.559 --> 0:13:01.520 Like I should have known this. 0:13:01.600 --> 0:13:04.160 You shouldn't sell Texas's. 0:13:04.240 --> 0:13:08.000 I mean, who figures it's right on the border with Mexico. 0:13:08.080 --> 0:13:11.200 Apparently they're they're building all this infrastructure and they got 0:13:11.280 --> 0:13:13.600 rockets down there and it's amazing. Yeah, isn't that cool. 0:13:13.920 --> 0:13:15.840 I'm going to be down there this week, I think, 0:13:16.840 --> 0:13:17.360 going by and. 0:13:17.480 --> 0:13:22.120 Just swing Byoka Chica. So, I mean, Katie, how how 0:13:22.160 --> 0:13:25.360 often does it happen that a company will I guess 0:13:25.360 --> 0:13:28.839 give liquidity to its employees that you know, through these 0:13:28.920 --> 0:13:29.560 these tenders. 0:13:30.920 --> 0:13:33.719 So SpaceX does it more often than most. They've been 0:13:33.760 --> 0:13:37.280 doing it roughly every six months recently. But it's it's 0:13:37.320 --> 0:13:40.880 really a case by case spaces with companies. Uh, some 0:13:41.080 --> 0:13:44.400 companies don't want to do a lot of this because 0:13:45.200 --> 0:13:48.960 it makes it harder to have investor demand if they 0:13:49.000 --> 0:13:51.320 want to raise around for the company, if they've already 0:13:51.600 --> 0:13:53.679 they're already a lot of shares that have been available 0:13:53.679 --> 0:13:56.560 on the market. But what SpaceX is doing here is 0:13:56.640 --> 0:14:00.480 providing an opportunity for employees to go and buy the house, 0:14:00.640 --> 0:14:03.760 because if they don't sell these shares in a tender, 0:14:03.800 --> 0:14:07.800 they have to wait for an eventual IPO, otherwise their 0:14:07.880 --> 0:14:11.800 net worth is just on paper. So that this is 0:14:11.880 --> 0:14:15.560 really to help insiders have some liquidity, and they're able 0:14:15.600 --> 0:14:18.240 to do this because they have tremendous demand. And it 0:14:18.280 --> 0:14:21.720 goes without saying. Elon Musk, who is the founder of 0:14:21.720 --> 0:14:25.240 this business, is a very very controversial figure. He's recently 0:14:25.280 --> 0:14:29.160 made statements that have hurt advertisers on x formally known 0:14:29.160 --> 0:14:33.280 as Twitter. But we see still plenty of investor demand 0:14:33.360 --> 0:14:34.080 for SpaceX. 0:14:34.280 --> 0:14:37.600 Hey, Katy, do we know who buys these shares from 0:14:37.600 --> 0:14:38.160 the employees? 0:14:39.800 --> 0:14:43.080 A lot of them are vcs or other high net 0:14:43.160 --> 0:14:48.760 worth individuals. Accredited investors could be hedge funds, it could 0:14:48.760 --> 0:14:55.280 be broad groups of institutional investors, but it's a mix. 0:14:56.680 --> 0:14:59.600 That's interesting. So what do you think is sort of 0:14:59.640 --> 0:15:02.280 the timetable kind of moving forward here. As far as 0:15:02.280 --> 0:15:03.640 how all this ends up playing. 0:15:03.360 --> 0:15:08.720 Out, well, our understanding is that they just decided on 0:15:08.800 --> 0:15:11.640 the price, or they were on the verge of deciding 0:15:11.680 --> 0:15:14.040 the price when we got a hold of it. So 0:15:14.480 --> 0:15:18.600 the tender is just getting started. It's just underway. I 0:15:18.640 --> 0:15:20.800 would imagine that they're going to try to do as 0:15:20.880 --> 0:15:23.720 much as they can before the holidays, but I'm not 0:15:23.720 --> 0:15:26.480 sure if it will formally close before the end of 0:15:26.480 --> 0:15:26.800 the year. 0:15:27.560 --> 0:15:30.920 Katie, you're the VC deals reporter. Talk to us about 0:15:31.040 --> 0:15:36.480 your world these days, our VC companies getting funded. Can 0:15:36.520 --> 0:15:38.200 I if I have a really cool idea, can I 0:15:38.240 --> 0:15:42.040 go to Sandhill Road and raise some money? Here gives 0:15:42.040 --> 0:15:43.360 a sense of what the mornment is like. 0:15:44.560 --> 0:15:47.320 Well, if you're doing an AI related company, they're all 0:15:47.440 --> 0:15:51.000 ears and I'll be writing you checks before you know it. 0:15:51.040 --> 0:15:56.080 But for everything else, for other than outliers like SpaceX, 0:15:56.120 --> 0:16:00.640 it's been really slow this year, particularly at the growth stages, 0:16:00.680 --> 0:16:05.720 which I cover sometimes seeds stages. They're not as concerned 0:16:05.800 --> 0:16:09.760 about the broader macro environment because vcs tend to invest 0:16:09.800 --> 0:16:13.160 on a ten year time horizon, so they can be 0:16:13.200 --> 0:16:16.600 bullish about the future. But companies that raised in like 0:16:16.840 --> 0:16:20.560 twenty twenty one are often considered to be overvalued because 0:16:20.960 --> 0:16:24.320 the market you look at tech stocks, they've gone down 0:16:24.360 --> 0:16:28.040 for the most part considerably since then, and that's affected 0:16:28.120 --> 0:16:32.440 valuations throughout the whole ecosystem. So right now it's a 0:16:32.520 --> 0:16:35.920 tough time to be a startup that raised money, that 0:16:35.960 --> 0:16:39.560 wants more money. But if you're just getting started sometimes 0:16:38.760 --> 0:16:41.840 there's a room for opportunities still. 0:16:42.280 --> 0:16:44.200 For those who don't know, Katie Roof is one of 0:16:44.200 --> 0:16:47.320 our star reporters here at Bloomberg, constantly breaking news out 0:16:47.320 --> 0:16:50.040 of Silicon Valley from your purview being over there and 0:16:50.080 --> 0:16:52.440 what you were just walking us through, especially on the 0:16:52.440 --> 0:16:54.520 back of what happened with some of those regional bank 0:16:54.560 --> 0:16:56.640 issues back in the spring and a lot of those 0:16:56.680 --> 0:16:59.680 tied to different Silicon Valley banks. What is it like 0:17:00.120 --> 0:17:02.480 in the mood, in the atmosphere as far as how 0:17:02.560 --> 0:17:04.480 things have come and gone over the past nine months 0:17:04.520 --> 0:17:04.920 since then. 0:17:06.520 --> 0:17:08.520 So there's fewer holiday parties this year. 0:17:09.960 --> 0:17:11.520 Oh, we were talking about that earlier. 0:17:11.600 --> 0:17:15.480 Apparently there's a story on the terminal more pickable in glock, Katie. 0:17:17.200 --> 0:17:20.440 Yeah, So my understanding and talking to some venture firms, 0:17:20.840 --> 0:17:23.359 there's still some, but some felt that it was a 0:17:23.400 --> 0:17:26.080 bad book to throw a holiday party this year. You 0:17:26.119 --> 0:17:29.400 look at their last two years where there have been 0:17:29.560 --> 0:17:33.840 very few IPOs. The M and A is often very 0:17:33.880 --> 0:17:38.359 disappointing prices, so they're not bringing in a lot of money, 0:17:38.760 --> 0:17:42.679 and so they felt that it looked bad for some 0:17:42.720 --> 0:17:46.280 of them to be throwing big, splashy events. And Silicon 0:17:46.359 --> 0:17:49.240 Valley Bank actually used to be the sponsor of a 0:17:49.280 --> 0:17:53.080 lot of these events. Interestingly, I still see their name 0:17:53.160 --> 0:17:56.080 on some parties because they're still alive with their new owner. 0:17:56.240 --> 0:17:59.719 But I would imagine that it's a different scenario than 0:17:59.760 --> 0:18:00.879 it was two years ago. 0:18:01.520 --> 0:18:04.200 And are the VC funds are they Are they still 0:18:04.200 --> 0:18:07.480 out there fund of raising or is that also kind 0:18:07.480 --> 0:18:08.400 of slowed down? 0:18:09.480 --> 0:18:12.360 Sure, And so I think again it's a split between 0:18:12.680 --> 0:18:15.760 the stages. So the earliest stages, a lot of them 0:18:16.320 --> 0:18:19.520 have had great returns and have continued to raise new 0:18:19.520 --> 0:18:22.879 funds for seed stage investing. But what you're seeing is 0:18:22.880 --> 0:18:27.320 a lot of the crossover funds, the pre IPO investors 0:18:27.760 --> 0:18:31.000 really got burned in this market, and so what we're 0:18:31.040 --> 0:18:33.800 seeing is some of them struggling to raise new funds 0:18:33.880 --> 0:18:39.159 or raising smaller funds or trying to change their strategy 0:18:39.240 --> 0:18:42.960 to invest in either the earlier stages of VC or 0:18:43.040 --> 0:18:45.639 just go back to investing in the public markets if 0:18:45.680 --> 0:18:46.919 that's what they were doing before. 0:18:48.080 --> 0:18:48.439 Yeah. 0:18:48.480 --> 0:18:51.680 Interesting, it's just a tough time. I think people just uncertain. 0:18:51.720 --> 0:18:54.200 I'm just looking at the NASDAC, you know, still ten 0:18:54.240 --> 0:18:58.240 percent off of the high. So if your evaluation sensitive, 0:18:58.240 --> 0:19:00.479 that kind of number kind of gets your attention here, 0:19:00.520 --> 0:19:02.320 Katie Roof, thanks so much for joining us. Katy Roof, 0:19:02.600 --> 0:19:05.600 VC deals reporter for Bloomberg News, joining us on zoom 0:19:05.600 --> 0:19:09.040 from the awesome office. 0:19:08.720 --> 0:19:11.480 For Pemburg in I've heard about. I gotta go visit 0:19:11.520 --> 0:19:12.000 sometimes soon. 0:19:12.080 --> 0:19:12.880 Yeah, looking very cool. 0:19:12.920 --> 0:19:15.040 It's out there in Century City, a nice part of 0:19:15.119 --> 0:19:18.000 town there overlooking Bellair Country Club. I believe is the 0:19:18.040 --> 0:19:20.760 one kind of splash. It's what you would expect from 0:19:20.760 --> 0:19:22.160 Bloomberg News in La. 0:19:22.280 --> 0:19:24.240 I'm still thinking about what you told me about South 0:19:24.280 --> 0:19:25.160 Texas where the launch. 0:19:25.240 --> 0:19:26.439 Oh, Boka, Chica, we'll go. 0:19:26.600 --> 0:19:28.399 So I'm gonna be. I'm gonna be down South Texas 0:19:28.440 --> 0:19:29.600 this week and officiating a. 0:19:29.600 --> 0:19:31.480 Wedding, so I don't know how you get there. 0:19:32.520 --> 0:19:33.159 I'll figure it out. 0:19:33.440 --> 0:19:35.600 Flying to Houston and then I think you drive. You know, 0:19:35.680 --> 0:19:37.440 you can just keep driving. All right, We're gonna have 0:19:37.480 --> 0:19:39.280 more coming up. S and P five hundred ended up 0:19:39.280 --> 0:19:41.960 the date up eight ten. This is Bloomberg. 0:19:42.880 --> 0:19:46.480 You're listening to the Bloomberg Business Week podcast. Catch us 0:19:46.480 --> 0:19:50.520 live weekday afternoons from three to six Eastern on Bloomberg Radio, 0:19:50.720 --> 0:19:54.000 the Bloomberg Business App, and YouTube. You can also listen 0:19:54.080 --> 0:19:57.200 live on Amazon Alexa from our flagship New York station. 0:19:57.640 --> 0:20:03.240 Just say Alexa playing Bloomberg eleven. 0:20:03.600 --> 0:20:12.240