WEBVTT - Shameful Secret Heart 0:00:02.720 --> 0:00:07.240 Bloomberg Audio Studios, podcasts, radio news. 0:00:11.240 --> 0:00:13.320 H Matt, it's nice to be back in studio with you. 0:00:14.560 --> 0:00:19.040 Yeah, we've we've we've each had a series of adventures. Yeah, 0:00:19.079 --> 0:00:22.079 the car crashed into my house. You went to Ireland's insane. 0:00:22.200 --> 0:00:23.680 Those two events are not related. 0:00:23.840 --> 0:00:25.400 No, it would be rader they were. 0:00:25.480 --> 0:00:26.960 I'm a year older, two. 0:00:26.760 --> 0:00:29.760 Weeks old there, but yeah, across the mouse A happy birthday. 0:00:29.440 --> 0:00:31.680 Thank you. It was last Monday. 0:00:32.120 --> 0:00:38.360 My birthday is, it's around, it's coming weird, it's fine, 0:00:38.479 --> 0:00:40.000 social Security number is. 0:00:41.479 --> 0:00:43.239 Some people are so caged about their birthdays. 0:00:43.440 --> 0:00:48.400 I guess I shouldn't be. It's like, don't don't be ashamed. Birthday, Katie, 0:00:48.600 --> 0:00:50.920 thank you. Everyone's on your birthday is just Katie. 0:00:51.000 --> 0:00:52.880 Yeah for me and Matt, just you can send. 0:00:52.760 --> 0:00:56.000 Them to we have We have a close to overlapping birthday. 0:00:56.320 --> 0:00:56.600 Yeah. 0:00:56.880 --> 0:00:59.800 You and I had like birthday parties a day apart once, right. 0:01:00.120 --> 0:01:03.080 Yeah, I went to your birthday party. 0:01:03.240 --> 0:01:03.440 Yeah. 0:01:03.520 --> 0:01:05.480 I was going to say the number leap the number. 0:01:07.800 --> 0:01:09.880 That was fun. Okay, I didn't go. 0:01:09.880 --> 0:01:12.440 To yours because I was like in the far reaches 0:01:12.480 --> 0:01:14.520 of New Jersey, but I heard it was a wild time. 0:01:14.680 --> 0:01:16.560 You should have gone, I should have gone. Well, my 0:01:16.640 --> 0:01:19.240 baby showers there, so you should go to that. 0:01:19.360 --> 0:01:22.040 Yeah, yeah, wild fire trucks. 0:01:22.720 --> 0:01:25.399 No, maybe, I don't know, depending. 0:01:25.000 --> 0:01:29.840 On depending how he Wow and Welcome to The Money 0:01:29.880 --> 0:01:32.520 Stuff Podcast, new weekly podcast where we talk about stuff 0:01:32.520 --> 0:01:36.679 related to money. I'm Matt Levine and I write the 0:01:36.680 --> 0:01:38.800 Money Stuff Call for Bloomberg Opinion. 0:01:39.440 --> 0:01:42.040 And I'm Katie Greifeld, a reporter for Bloomberg News and 0:01:42.080 --> 0:01:43.560 an anchor for Bloomberg Television. 0:01:52.360 --> 0:01:55.040 I got so many emails from people being like, are 0:01:55.080 --> 0:01:57.960 you on vacation, because it's like a bit yea that 0:01:59.080 --> 0:02:01.400 every time I go ahead becation, Elon Musk does some 0:02:01.480 --> 0:02:04.920 wild thing and it's not like literally only when I 0:02:04.960 --> 0:02:06.640 go on vacation. And in fact, I was not on 0:02:06.760 --> 0:02:08.080 vacation last week, but you were. 0:02:08.160 --> 0:02:11.760 Yeah, you were ready and waiting to. 0:02:10.960 --> 0:02:14.799 To write about the SpaceX ip Yeah, which they made 0:02:14.800 --> 0:02:16.560 the public filing for an IPO that is supposed to 0:02:16.600 --> 0:02:17.400 go in like a. 0:02:17.400 --> 0:02:21.800 Couple of weeks like mid June. Yeah, there's a it 0:02:21.880 --> 0:02:25.240 was interesting to see all the different numbers. Is you said, 0:02:25.320 --> 0:02:28.960 it seems like the AI is taking up a lot 0:02:29.000 --> 0:02:29.560 of cash. 0:02:29.680 --> 0:02:33.040 Yeah. Right. The basic financial situation here is like they have, 0:02:33.120 --> 0:02:36.160 you know, a kind of goodish business of flinging satellites 0:02:36.160 --> 0:02:39.880 into space and more importantly like charging people for satellite service. 0:02:40.120 --> 0:02:42.320 They have had until recently a sort of money pit 0:02:42.440 --> 0:02:45.400 for building a front of your AI lab that is 0:02:45.440 --> 0:02:50.280 not necessarily the most renovator generating front of youer AI lab. 0:02:50.760 --> 0:02:54.000 But now they've sort of switched, like like a little 0:02:54.000 --> 0:02:56.760 too late for the IPO filing. They're now like a 0:02:56.760 --> 0:02:59.720 AI infrastructure company that basically rents data centers through anthropic 0:03:00.120 --> 0:03:02.399 you know whatever. Yeah, they've spent a lot of money 0:03:02.400 --> 0:03:06.560 on AI. They've made more of their money on space. 0:03:07.480 --> 0:03:09.239 But to me, the interesting thing is that sort of 0:03:09.320 --> 0:03:13.120 projections they talk about their total addressable market, which is 0:03:13.200 --> 0:03:16.919 a number you throw around for here is like where 0:03:16.960 --> 0:03:20.280 we could make money, and you know, they say, we've 0:03:20.280 --> 0:03:23.440 idented about the largest dam and human history or whatever, 0:03:23.720 --> 0:03:26.120 twenty eight trillion dollars. But almost all of that is 0:03:26.240 --> 0:03:29.519 enterprise AI. Right. The perspective begins with twelve pages of 0:03:29.560 --> 0:03:32.800 photos and illustrations of rocket launches and Mars colonies, and 0:03:32.840 --> 0:03:35.600 then it's like we're gonna do enterprise AI. Yeah, and 0:03:35.960 --> 0:03:38.120 there's like a near term play of we make money 0:03:38.640 --> 0:03:41.120 actually sending rockets into space. And then there's like a 0:03:41.160 --> 0:03:44.240 medium term play We're gonna make trillions of dollars doing 0:03:44.360 --> 0:03:46.920 enterprise AI, even though we just started that a couple 0:03:46.960 --> 0:03:48.920 of months ago. And then there's like a long term 0:03:48.920 --> 0:03:51.520 planet we're gonna build Mars colonies. Right, it's like a strange, 0:03:51.560 --> 0:03:54.560 like you know, U shaped curve of space and then 0:03:54.600 --> 0:03:57.400 AI and then more space. There are projections of like 0:03:57.400 --> 0:03:58.720 how we're going to make money. It's like this is 0:03:58.760 --> 0:04:01.320 an AI company, and I don't know if that's the 0:04:01.440 --> 0:04:04.560 story that investors are hearing are interested in, but it 0:04:04.640 --> 0:04:06.640 is sort of the when they look around to be 0:04:06.720 --> 0:04:09.320 like how can we justify a two trillion dollar valuation, 0:04:09.440 --> 0:04:11.760 it's like, well, we're gonna sell a lot of enterprise 0:04:11.800 --> 0:04:12.600 AI software. 0:04:12.720 --> 0:04:14.560 Yeah, this is what we're going to do in the meantime. 0:04:14.680 --> 0:04:15.920 Before before the. 0:04:15.880 --> 0:04:19.080 Mars colony becomes vilt that in orbital data centers, which 0:04:19.120 --> 0:04:21.200 are now like they have gone from like a glimmer 0:04:21.240 --> 0:04:23.680 and Elon Musk's side to everyone being like, oh yeah. 0:04:23.640 --> 0:04:25.320 Urbal data center like a thing that you say with 0:04:25.320 --> 0:04:26.120 the straight yeah. 0:04:26.000 --> 0:04:28.440 Exactly exactly, like I have laughed the first time. 0:04:30.400 --> 0:04:32.160 Well, yeah, of course, where else would you do with them? 0:04:32.200 --> 0:04:34.640 It makes sense. Yeah, it's gonna be interesting. This is 0:04:34.680 --> 0:04:36.920 also something else we've talked about on the podcast is 0:04:36.960 --> 0:04:42.720 the Elon Musk premium that Tesla shares enjoy and I 0:04:42.720 --> 0:04:45.680 I wonder if that's going to transfer to SpaceX. 0:04:46.000 --> 0:04:51.000 They have, you know, like a eighteen billion annual revenue 0:04:51.080 --> 0:04:54.160 run rate lose money, like then like all of the 0:04:54.240 --> 0:04:56.960 numbers that are being talked about for the IPI or 0:04:57.080 --> 0:05:00.320 load a mid one trillions to like two trillions to there, 0:05:00.480 --> 0:05:04.279 that's a hundred times revenue for a money losing company. 0:05:04.920 --> 0:05:06.600 I think that's an Elon Musk premium. 0:05:06.880 --> 0:05:10.280 It sounds like it quite a large one. Yeah, that's fair. 0:05:10.360 --> 0:05:12.080 I make fun of Elon Musk, but like if you 0:05:12.360 --> 0:05:16.599 put money into SpaceX, you have more money now like 0:05:16.920 --> 0:05:20.719 necessarily on a like profit basis, but on a valuation basis. 0:05:20.760 --> 0:05:21.840 Like people have made a lot of money with the 0:05:21.839 --> 0:05:25.560 Elon Musk and so there's a reason that people keep 0:05:25.560 --> 0:05:27.800 putting a premium on investing with them, and like you know, 0:05:27.920 --> 0:05:30.240 like like will that eventually run out? Will people like 0:05:30.279 --> 0:05:32.880 who buy on the IPO be disappointed that like it 0:05:32.920 --> 0:05:35.280 doesn't justify a two trillion dollar valuation like Marrie, I 0:05:35.279 --> 0:05:37.440 don't know, but there's going to be an Elon Musk premium. 0:05:37.640 --> 0:05:39.680 Even if this is a super disappointing IPO, It'll be 0:05:39.680 --> 0:05:40.640 an Elon Musk premium. 0:05:40.680 --> 0:05:43.000 And it'll also be in a bunch of indexes and 0:05:43.080 --> 0:05:45.240 be in a bunch of it. There's a lot of consternation. 0:05:45.880 --> 0:05:47.479 I was thinking about this, Like I had an email 0:05:47.480 --> 0:05:50.440 from one person, you know, like a regular retail investor. 0:05:50.520 --> 0:05:52.240 I put money at the SMP. Is there anyway for 0:05:52.279 --> 0:05:55.800 me to short Elon Musk And the answer is like, sure, 0:05:55.839 --> 0:05:57.680 short space AX if you want to get your you know, 0:05:59.080 --> 0:06:01.240 and then it goes up to and you lose your shorts. 0:06:01.560 --> 0:06:04.200 I totally understand, and I think I'm more sympathetic than 0:06:04.279 --> 0:06:06.960 most people to the idea that, like the big indexes 0:06:07.080 --> 0:06:10.360 have to include SpaceX on an accelerated basis. Like I 0:06:10.400 --> 0:06:12.720 think that's right. Like I think when you're like the 0:06:12.839 --> 0:06:15.600 S and P or the Russell three thousand or even 0:06:15.640 --> 0:06:18.039 the Nasdaq one hundred, like you are more or less 0:06:18.040 --> 0:06:21.120 saying we are the stock market, right, or at least 0:06:21.160 --> 0:06:23.279 we're the large cap companies, or like in the ass case, 0:06:23.279 --> 0:06:25.359 we're like the big tech companies. Listen, on ethic, Like 0:06:26.160 --> 0:06:28.920 it would be a dereliction of their job to not 0:06:28.960 --> 0:06:34.360 include in their index a gigantic return driving, super high 0:06:34.400 --> 0:06:37.440 profile company that is a public company, Like they just 0:06:37.480 --> 0:06:40.280 have to include SpaceX, Like I totally get it. And 0:06:40.480 --> 0:06:42.520 people are mad because they're like waving their rules and 0:06:42.520 --> 0:06:45.080 it's like they're waving their rules. They're really mad and 0:06:45.120 --> 0:06:48.280 they're waving their rules to include this giant company. And 0:06:48.760 --> 0:06:52.120 I'm very sympathetic to it, but I will say that 0:06:52.440 --> 0:06:54.560 so many people are mad about it that there should 0:06:54.560 --> 0:06:57.279 be a competitor index that's just like the S and 0:06:57.279 --> 0:06:59.840 P five hundred without Elon Mosk. Right, my general view 0:06:59.880 --> 0:07:03.920 is like if you are a passive index investor, you 0:07:03.960 --> 0:07:06.760 can't like have standards. You can't be like, oh but 0:07:06.960 --> 0:07:08.840 this company is bad, Right, that's not how it works. 0:07:08.880 --> 0:07:11.720 Like you're you're taking the market's judgment. That's the market's judgment. 0:07:11.760 --> 0:07:14.200 Is that SpaceX is worth two trillion dollars, then, like 0:07:14.640 --> 0:07:15.280 that's the markets. 0:07:15.600 --> 0:07:16.960 So you signed up, that's what you sign up for. 0:07:18.000 --> 0:07:20.760 But like just empirically, a lot of people don't want 0:07:20.760 --> 0:07:22.120 to sign up for that, and so you should give 0:07:22.120 --> 0:07:23.800 them the other thing, Like it doesn't matter, Like it's 0:07:23.800 --> 0:07:26.200 like esthetically displeasing to be like, wow, that's an index 0:07:26.200 --> 0:07:27.680 fund with that Elon mus but the best people want 0:07:27.760 --> 0:07:28.040 give it to. 0:07:28.320 --> 0:07:30.600 It's like ex China, you know exactly. 0:07:30.600 --> 0:07:32.720 It's like ESG indexes where it's like most of the 0:07:32.760 --> 0:07:34.720 s and P five hundred but not the bad companies, right, 0:07:34.760 --> 0:07:36.400 Like you do the same thing with Elon Musk. Yeah, 0:07:36.400 --> 0:07:38.280 it would sell like hotcakes. 0:07:39.120 --> 0:07:41.920 Well, and if it didn't, that also too would be interesting. 0:07:42.080 --> 0:07:43.720 Like all of this hand ringing. 0:07:43.560 --> 0:07:45.840 Was just that, right. Part of the hand ring is 0:07:45.880 --> 0:07:47.960 people are mad about like their index funds being invested 0:07:47.960 --> 0:07:50.000 in Elon Musk. Yeah, this drives me a little nuts. 0:07:50.040 --> 0:07:52.840 But like part of it is active manager being like, well, 0:07:52.840 --> 0:07:57.400 we're benchmarked to these indexes, and SpaceX is going to 0:07:57.440 --> 0:08:02.800 be a huge driver of under or over performance, right, 0:08:02.840 --> 0:08:05.400 Like either it'll go up a lot or it won't, right, 0:08:06.080 --> 0:08:09.600 And the only way for us to be safe in 0:08:09.720 --> 0:08:11.920 keeping our jobs is to like, I don't know, hug 0:08:11.960 --> 0:08:14.280 the index on that one, right, and if like we 0:08:14.680 --> 0:08:18.800 buy no SpaceX and ten xes, then we will look 0:08:18.880 --> 0:08:21.960 terrible against the index that we're benchmarked too. Yeah, your 0:08:22.040 --> 0:08:24.640 job is to actively manage when they're supposed to get 0:08:24.680 --> 0:08:27.440 it right. But then unless people are really mad about it, 0:08:28.600 --> 0:08:31.080 and it's going to be the most like attention getting 0:08:31.120 --> 0:08:33.440 company in the index until it open a goes public. 0:08:33.559 --> 0:08:37.160 It's interesting to point out that we also saw Russell, Yeah, 0:08:37.360 --> 0:08:40.319 make the decision to fast track sure SpaceX, Like. 0:08:40.320 --> 0:08:42.560 It's like the Russell three thousands. Every company they have 0:08:42.640 --> 0:08:44.040 to it's crazy. 0:08:44.440 --> 0:08:47.520 But it's probably worth pointing out that Nasak did win 0:08:47.559 --> 0:08:52.319 the listing for the SpaceX IPO after they agreed to 0:08:52.440 --> 0:08:55.040 let SpaceX in early to the NASAQ one hundred. 0:08:55.360 --> 0:08:56.800 I know, but I don't like, I don't think that 0:08:56.840 --> 0:08:59.439 these index providers, I mean, like maybe past that because 0:09:00.000 --> 0:09:01.840 playing three dimensional chests or whatever. Like, I don't think 0:09:01.880 --> 0:09:03.480 these index providers are, oh we have to kiss up 0:09:03.480 --> 0:09:06.400 to Elon Musk. I think they are consulting with the 0:09:06.480 --> 0:09:10.600 users of the indexes, index ones and investors generally, and 0:09:10.640 --> 0:09:13.400 they're like, is this a public company? Yes, well then 0:09:13.440 --> 0:09:15.000 it should be in the list of public companies. I 0:09:15.000 --> 0:09:15.320 don't know. 0:09:15.480 --> 0:09:18.320 Yeah, Well, the fact that it isn't just nastact is yeah, 0:09:18.480 --> 0:09:19.400 add credence to that. 0:09:19.520 --> 0:09:23.920 People are mad about indexes monking with their float requirements, 0:09:24.000 --> 0:09:26.320 and in fact it looks like SpaceX's float will be 0:09:26.400 --> 0:09:29.040 it's actually available, free float will be pretty low for 0:09:29.080 --> 0:09:31.560 the first six months or so, like a lot of 0:09:31.559 --> 0:09:34.360 shares will be subject to lock up, and so only 0:09:34.520 --> 0:09:36.640 in the order of five percent of shares will trade. 0:09:36.640 --> 0:09:38.720 And so if you force all the index ones to 0:09:39.800 --> 0:09:41.560 squeeze into that five percent of shares are going to 0:09:41.559 --> 0:09:43.719 push out the price a lot. I don't know how 0:09:43.720 --> 0:09:46.200 binding that is. A lot of the indexes have like 0:09:46.240 --> 0:09:48.120 float adjustments where it's not like you have to buy 0:09:48.120 --> 0:09:50.800 the entire free float. And also the biggest index of 0:09:50.840 --> 0:09:53.319 the S and P which is not going to add 0:09:53.360 --> 0:09:55.800 it for six months or Yeah, so it'll be they'll 0:09:55.800 --> 0:09:57.640 have more free float by then because the lock ups 0:09:57.640 --> 0:10:01.240 will explare. But yeah, like the there's gonna be a 0:10:01.280 --> 0:10:03.959 lot of index or day five in the case of 0:10:03.960 --> 0:10:05.920 the Rustler, day fifteen in the case of the NAZAC, 0:10:05.960 --> 0:10:07.760 which is when these when that will be eligible for 0:10:07.800 --> 0:10:09.880 the index. There'll be a lot of like index demand 0:10:10.040 --> 0:10:11.640 and not a lot of supply, and that could be 0:10:11.800 --> 0:10:13.120 have weird dynamics for prices. 0:10:13.280 --> 0:10:16.040 Yeah, you pointed this out in one of your columns. 0:10:16.080 --> 0:10:20.720 But fifteen days, I mean fine, five days does seem 0:10:20.760 --> 0:10:23.640 a little quick, like it'll it feels like it'll still 0:10:23.679 --> 0:10:25.120 be funky at that point. 0:10:24.960 --> 0:10:27.120 When a company goes public like s and P five 0:10:27.240 --> 0:10:29.679 hundred funds are not buying in the IPO because who knows, 0:10:29.720 --> 0:10:34.040 and I'll be added to the SMP. There's gonna be significant, 0:10:34.120 --> 0:10:38.640 like Russell and Nazac, index demand for this company very 0:10:38.679 --> 0:10:42.840 predictably within three weeks after, you know, one to three 0:10:42.840 --> 0:10:45.520 weeks after the IPO, and so you know, like we'll 0:10:45.640 --> 0:10:49.480 hedge funds be buying in the IPO to deliver in 0:10:49.520 --> 0:10:52.120 their index arm strategy. Yeah, and so there's going to 0:10:52.160 --> 0:10:56.080 be essentially index demand for these shares in the IPO, 0:10:56.559 --> 0:10:58.800 and that's like a little unusual, right. I don't really 0:10:58.800 --> 0:11:00.520 know the numbers, but like people have said, seventy five 0:11:00.520 --> 0:11:02.839 billion dollars of stock coming in the IPO, which is 0:11:02.880 --> 0:11:05.760 a giant IPO. Yeah, the valuation is one thing, but 0:11:05.760 --> 0:11:08.520 then the amount of stock being issued is huge, and 0:11:08.600 --> 0:11:10.840 some of that is going to go to institutional investors 0:11:10.840 --> 0:11:13.320 who like the stock and go to meetings and build 0:11:13.360 --> 0:11:16.480 some valuation model and come to some price and put 0:11:16.559 --> 0:11:19.280 in an order at a price and get allocated the stock. 0:11:19.720 --> 0:11:22.320 But some of it is going to come from really 0:11:22.360 --> 0:11:24.600 like price in sensitive demand, which is like, you know, 0:11:24.640 --> 0:11:26.959 thirty percent or whatever the deal is going to retail, 0:11:27.000 --> 0:11:32.680 and retail is like generally in offerings is assumed to 0:11:32.679 --> 0:11:34.680 be priced and sensitive, right, Like the retail just prices 0:11:34.720 --> 0:11:36.439 at what the institutional prices. And so if you have 0:11:36.480 --> 0:11:37.880 thirty percent going to retail, you have a lot of 0:11:37.880 --> 0:11:40.840 price and sensitive demand, and then some of it is 0:11:40.880 --> 0:11:43.520 going to effectively go to index funds, which are like 0:11:43.559 --> 0:11:44.960 effectively priced and sensitive. 0:11:45.120 --> 0:11:47.560 Yeah. Well, we brought up with the seventy five billion dollars, 0:11:47.600 --> 0:11:50.839 and definitely the amount of the float that's available is 0:11:50.880 --> 0:11:53.760 also one of the reasons why people are upset about 0:11:54.679 --> 0:11:56.600 sort of the rules being bent here because I think 0:11:56.600 --> 0:12:01.880 that's like five percent. Yeah, but think about that absolute number, 0:12:01.960 --> 0:12:04.840 like seventy five billion dollars. I feel like the percent 0:12:05.520 --> 0:12:07.800 becomes a little bit less meaningful. 0:12:07.880 --> 0:12:12.760 Well depends if there were eighty billion dollars of index demand. 0:12:13.160 --> 0:12:15.680 That would be a big deal, I don't think, because 0:12:15.760 --> 0:12:18.120 it's not. The S and P day one and the 0:12:18.160 --> 0:12:20.800 indexes all have like adjustments. The index inclusion is not 0:12:20.840 --> 0:12:22.560 based on the entire market gap, but it's based on 0:12:22.559 --> 0:12:24.199 some multiple of the. 0:12:24.160 --> 0:12:28.160 Foot something I was just thinking about. So this IPO 0:12:28.240 --> 0:12:32.160 is expected by June eleventh, it's expected on a Thursday. 0:12:32.559 --> 0:12:35.199 What are we going to do well? I don't know, 0:12:35.480 --> 0:12:39.240 live podcast. Yeah, we should come out with a really. 0:12:38.960 --> 0:12:41.280 Strong start trading as we walk in here. 0:12:41.360 --> 0:12:43.360 Yeah, Jeese Louise. 0:12:43.920 --> 0:12:45.240 Maybe we can get them to move it up. 0:12:45.760 --> 0:12:48.840 Yeah, I mean, just tom him a. 0:12:48.840 --> 0:12:50.880 Price on a Thursday. I think so, and then I'll 0:12:51.040 --> 0:12:52.720 trade on Friday, so it doesn't matter. 0:12:52.760 --> 0:12:55.080 I need to think about this. We were trying to 0:12:55.080 --> 0:12:56.080 plan it for television. 0:12:56.120 --> 0:12:58.840 I have a governance a little bit. The governance is crazy. 0:12:58.880 --> 0:13:01.040 It's not that crazy because you know, we talked about 0:13:01.040 --> 0:13:03.520 the Elon Musk prenant. It's like the governance of this 0:13:03.559 --> 0:13:05.400 company is Elon Musk can do whatever he wants, right, 0:13:05.480 --> 0:13:08.040 he has eighty five percent voting control his super voting stock. 0:13:08.040 --> 0:13:09.720 He also gets to a point more than you know, 0:13:09.800 --> 0:13:13.679 fifty one percent of the directors regardless of his voting power. 0:13:13.679 --> 0:13:16.280 Because he has the special stock, he doesn't have to 0:13:17.080 --> 0:13:21.000 He's no obligations to like give the SpaceX any corporate opportunities. 0:13:21.080 --> 0:13:22.600 So if he wants to start a new AI company 0:13:22.679 --> 0:13:24.760 or a new space company, you just do it, and 0:13:24.800 --> 0:13:27.360 he can't be sued for like preaching his fidy SIA duties. 0:13:27.559 --> 0:13:30.280 He can basically not be sued for securities fraud. If 0:13:30.280 --> 0:13:31.880 you super securities fraud, you have to do it in 0:13:31.920 --> 0:13:34.480 Texas State court. And there's all this stuff and you 0:13:34.520 --> 0:13:36.920 really can't sue for like preaching forty sharded is you 0:13:36.960 --> 0:13:38.800 need to have three percent of the stock to do that, 0:13:38.840 --> 0:13:42.400 which like there's tens of billions of dollars, and you 0:13:42.440 --> 0:13:45.320 wouldn't do that if you didn't like Elon Musk. So 0:13:45.320 --> 0:13:48.080 it's really just there's no checks on him whatsoever. And 0:13:48.559 --> 0:13:51.840 I do think that that is how SpaceX has been 0:13:51.920 --> 0:13:54.840 run up till now. He has worked out well for shareholders. 0:13:54.880 --> 0:13:56.800 I think a lot of the sholders of SpaceX are 0:13:57.120 --> 0:13:59.400 There's some quibbles about the ex high merger or whatever, 0:13:59.400 --> 0:14:02.120 but the most the shareholders of SpaceX are pretty happy 0:14:02.120 --> 0:14:04.400 with how Elon Musk is round the place. Yeah, And 0:14:04.480 --> 0:14:08.760 I think that Elon Musk and a lot of investors like, yeah, 0:14:09.040 --> 0:14:11.120 just letting Elon Musk do whatever he wants is the 0:14:11.200 --> 0:14:13.520 right way to run this company. And the stuff that 0:14:13.600 --> 0:14:17.120 happened to Tesla in Delaware where he got sued for 0:14:17.200 --> 0:14:21.640 getting paid too much. Was not the right way for 0:14:21.720 --> 0:14:25.680 Elon Musk to be governed, and he should get to 0:14:25.720 --> 0:14:28.600 do what he wants. And they are fixing the mistakes 0:14:28.600 --> 0:14:31.800 of Tesla by going public this way with SpaceX. I 0:14:31.840 --> 0:14:35.600 think that's a reasonable analysis. But I also think that 0:14:35.680 --> 0:14:37.800 as we just talked about, a lot of people who 0:14:37.840 --> 0:14:40.880 will buy the stock in the near term are index funds, Yes, 0:14:40.920 --> 0:14:45.960 and they don't like that. No, that's not their kind 0:14:46.000 --> 0:14:46.360 of thing. 0:14:46.760 --> 0:14:50.400 If you don't want SpaceX exposures, just buy an ESG fund. 0:14:50.440 --> 0:14:51.720 It seems neat. 0:14:51.680 --> 0:14:54.400 The ESG and Elon Musk relationship is interesting, right because 0:14:54.400 --> 0:14:56.440 it's like, you know, he has in many ways very 0:14:56.480 --> 0:14:58.720 environmentally friendly and in other way is not so ESG. 0:15:00.000 --> 0:15:04.760 It's not so much there's this really bizarre precedence setting 0:15:05.560 --> 0:15:09.320 management friendly governance of this company. And they were like, yeah, 0:15:09.320 --> 0:15:11.880 that's what people want investing in SpaceX. That's what you 0:15:11.920 --> 0:15:14.760 want to be. Like, what about the index ons, index ones? 0:15:14.920 --> 0:15:16.600 Like the deal with indix ons is they don't get 0:15:16.600 --> 0:15:18.440 what they want, they get what the market wants, right, 0:15:18.600 --> 0:15:21.600 So that's that's the deal they're signing up for. But 0:15:21.680 --> 0:15:24.640 it is a real new president now public companies are 0:15:24.680 --> 0:15:28.280 governed and if it goes well, what we saw with 0:15:28.280 --> 0:15:30.760 the Elon Musk like Winshot pay package is that every 0:15:30.800 --> 0:15:33.520 other texto is like, I want a trillion dollars if 0:15:33.560 --> 0:15:36.040 the people copy the Elon mus president because everyone wants 0:15:36.040 --> 0:15:38.240 to be Elon Musk. And so I think you'll see 0:15:38.240 --> 0:15:41.000 other companies go public with no constraints on their CEOs 0:15:41.040 --> 0:15:58.520 and like not all old Elon Musk. So Robin Hood 0:15:58.560 --> 0:16:01.400 like announced they're gonna let you like hook up your 0:16:01.560 --> 0:16:04.080 AI agents to our trading account and you'll have a 0:16:04.120 --> 0:16:06.480 special sandbox where they can't lose all of your money, 0:16:06.640 --> 0:16:09.160 but they can lose as much money as you give them. Yeah, 0:16:09.200 --> 0:16:11.600 and then you can like type in a box like 0:16:12.720 --> 0:16:15.400 they have some examples, like an active trader can backtis 0:16:15.480 --> 0:16:18.000 the mean reversion strategy to see how it performed historically 0:16:18.040 --> 0:16:20.280 and to play it automatically buy over sold stocks and 0:16:20.320 --> 0:16:21.880 so when they revert to the means, So stuff like that, 0:16:21.880 --> 0:16:23.440 you can like type in a box like, hey, here's 0:16:23.440 --> 0:16:25.200 a trade idea, and then your bot will do it 0:16:25.240 --> 0:16:27.240 for you. And I read about this this week, and 0:16:27.280 --> 0:16:29.360 I what I said was like you and I have 0:16:29.440 --> 0:16:32.720 talked and I've written about how eventually every trade will 0:16:32.760 --> 0:16:35.160 be an ETF. Yes, and like the ETF will be 0:16:35.200 --> 0:16:39.440 like the universal rapper for trade ideas. And now I'm like, 0:16:39.480 --> 0:16:42.840 now I'm wrong. It's not that it's agents. Agents will 0:16:42.840 --> 0:16:45.160 be the universal rapper because like you'll be able to 0:16:45.160 --> 0:16:47.720 think up whatever trade the idea you want, and instead 0:16:47.760 --> 0:16:51.880 of like laboriously piecing together stocks and options and what 0:16:51.920 --> 0:16:54.120 not to implement it, you'll just type the idea and 0:16:54.160 --> 0:16:56.360 then your agent will do the laborious piecing together. 0:16:56.560 --> 0:17:00.120 Yeah, I think it makes sense for trades. But and 0:17:00.200 --> 0:17:02.760 if you're just you want to buy indexes. 0:17:02.600 --> 0:17:04.600 Indexes, fine, yeah, yeah, but what has happened in the 0:17:04.680 --> 0:17:06.760 last few years is that like ETFs have been not 0:17:06.800 --> 0:17:09.600 just a rapper for index fund buy on hold ownership, 0:17:09.960 --> 0:17:12.280 but also long short pair trade. 0:17:12.040 --> 0:17:14.880 Strategy, stock auto call, all. 0:17:14.800 --> 0:17:17.480 Sorts of nonsense. Yeah, and all that nonsense is going 0:17:17.560 --> 0:17:20.720 to just be agentic AI and ETFs will be index 0:17:20.800 --> 0:17:23.480 fense again. And like, you know, it's a little. 0:17:23.280 --> 0:17:26.200 Sad for me, but I mean this is in your 0:17:27.160 --> 0:17:29.920 for you, this isn't your vision of the world. There's 0:17:29.960 --> 0:17:32.200 a lot of steps to make that happen. 0:17:32.280 --> 0:17:35.840 Yeah, we're early days of agent Rabinhood trading. In fact, 0:17:35.880 --> 0:17:39.000 they don't. They only have stocks right now, Like eventually 0:17:39.040 --> 0:17:42.640 it will be your agent can do options and crypto 0:17:42.680 --> 0:17:45.120 and prediction markets and then all the reil fund will happen, 0:17:45.160 --> 0:17:46.119 but for not stocks. 0:17:46.440 --> 0:17:51.280 And uh, it's also credit cards, right, like you can 0:17:51.320 --> 0:17:53.639 instruct the agent to make purchases. 0:17:53.880 --> 0:17:55.960 Yeah, which it was just not a thing that only 0:17:56.040 --> 0:17:58.840 Robinhood has been working on. But neither is the record 0:17:58.920 --> 0:18:02.600 stuff like public had a Bignoun's been about agentic brokerage stuff. 0:18:03.000 --> 0:18:05.480 But bid Yeah, like your credit card. You can like 0:18:05.520 --> 0:18:08.159 type in a box like buy me these sneakers if 0:18:08.160 --> 0:18:09.439 they get cheap, and then it'll do. 0:18:09.520 --> 0:18:11.520 It's just fun. I feel like you can imagine a 0:18:11.600 --> 0:18:15.480 myriad of ways where this goes wrong. Yeah, sure, especially 0:18:15.920 --> 0:18:17.920 I mean trading, yes, but also with the credit card. 0:18:18.040 --> 0:18:21.119 Sure, I think like you can set like hard limits 0:18:21.119 --> 0:18:22.639 on which the bot can spend. 0:18:23.200 --> 0:18:26.040 That's true, But even still I could see the bots 0:18:26.080 --> 0:18:28.240 being like, I don't know, this is a really good deal, 0:18:28.320 --> 0:18:29.720 maybe we should just go for it. 0:18:30.119 --> 0:18:32.640 Well, I think the idea is that the limits are 0:18:32.640 --> 0:18:36.600 not internal to the bot. They're on the credit card. Yeah, 0:18:36.640 --> 0:18:38.840 we're on the broker's account. If you say the bot 0:18:38.880 --> 0:18:40.879 can have ten thousand dollars on my robin Hood account, 0:18:41.320 --> 0:18:43.720 then like in theory, if your robin that if that 0:18:43.920 --> 0:18:46.120 pot gets to zero, then the bot has to stop. 0:18:46.560 --> 0:18:49.840 I do like your your vision of the world where 0:18:50.000 --> 0:18:55.040 this replaces all these one click trade ETFs. It seems 0:18:55.080 --> 0:18:58.720 like for the time being that Robinhood itself has less 0:18:58.760 --> 0:19:02.960