SPACEX IPO: PRICED AT 100X ITS REVENUE

The SpaceX IPO is the biggest in history, and the price tag makes no sense.
Here is the trillionaire maths before SPCX trades.

SpaceX is listing at around 1.77 trillion dollars, the largest IPO ever and seventh by market cap on day one. The problem: that is roughly 100 times its revenue, only Starlink actually turns a profit, and Elon Musk keeps about 85 percent voting control through a separate share class. 

We get into whether this is a genuine moonshot or just another AI-era share grab, and why your index fund might be buying it for you whether you like it or not.

00:00 The first trillionaire
00:50 A 1.77 trillion price tag
02:30 Only Starlink makes money
04:00 How Musk keeps control
05:30 The AI bubble and the dip

#SpaceXIPO #SPCX #ElonMusk

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Transcript

0:00

SpaceX is going public. Um, and there's gonna be a valuation of $1.75 trillion, which- Vietnam dollar dollars? No, actual dollars, USD. Which is, uh, quite a lot. Uh, and also compared to the actual earnings of SpaceX, that seems like a really, really high valuation, which have a lot of, a lot of people scratching their heads going, "Where's, where's this coming from, and why?" People banking hard on the moon being mined and having a lot of stuff inside it. They're gonna be super upset when they, like, get through the surface, and then this little clanger comes out. It's like, "What you doing?" Do you know what I mean? It's like, "There ain't nothing inside here." Just go home. Leave me alone. Yeah, yeah. Um- Get, get, do one. But I mean, that, that is part of, uh, what, what they're kind of planning or they're trying to entice investors with. So before filing a- an IPO and going public, they have to file something called an S1 prospectus. Usually this is, like, a really boring legal text document. Um, however, the SpaceX one, so the first 14 pages are just photographs of rockets as you do. And then they use, um, the phrase"extend the light of consciousness to the stars" over and over again many times throughout it. But there's all these kind of wacky things in there. So you have asteroid mining, you have data centers in space, manufacturing in, in space, uh, point to point transfer where I guess they're gonna have rockets flying people from one place to another around the world, which seem- I've heard about that … yeah, which seems a bit, a little bit far-fetched. Um, and it's the kind of thing, I'm sure a lot of these things could happen in the future, but if I invest in SpaceX today, will those things happen and I get my money back within my lifetime? You know, it's like maybe not. Well, it does make me quite excited of the idea of living in Vietnam and being able to nip back for a Greggs sausage roll. Yeah, some of that really high grade meat that they put inside with the weird gray- Yeah … gray color and texture. Yeah. Can't you just skip it and, you know, create teleportation or, or something else? But yeah, it's… I, I mean, I, I, I think Elon Musk is probably the biggest personal brand on the planet. It's like most of that money is just because it's Elon. Oh, yeah, and a lot of people, a lot of investors will invest just because it's Elon Musk. Uh, I guess a huge amount of just retail Robinhood investors. Um, but I mean, of course, the thing is this is, it's under the name SpaceX, but, um- Uh, Grok or xAI became a, a part of SpaceX not long ago. So really it's a huge It's like a huge sort of conglomerate of various companies, 'cause within that you have SpaceX, Grok, and a couple of other things, and really out of all of that, it's only Starlink that's actually turning a profit. Um- Right … Grok, just like every other AI company, is operating at a loss. Um, and even, even for market cap, this 1.75 trillion, that's like, uh, 100 times the actual revenue of all those companies combined. So where these numbers are coming from, it, uh, I, I don't know. Um, 'cause if we, if you looked at it compared to other companies when it, when it goes in, it'll be something like seventh in terms of market cap at 1.75 trillion. But if you actually look at it in profit, it's like more than 200 further down the list, and it's just this really wacky thing. They also managed- Mm … to get it fast-tracked into the NASDAQ listing. And so basically, as soon as this thing goes public, if you, if you own something in, uh, NQ, uh, NAS100, whatever, uh, you then automatically own some SpaceX and Grok- Right … and everything else that is involved with that. Which, so people just buy it without having a choice in some ways, which is wild. Smart business, isn't it? And then I think out of the back of it, Mr. Musk will be able to, like, obviously not sell any of his shares, but borrow money against them, right? Yeah. Is that not how they work it? So you can borrow money against shares, and therefore you don't have to pay any tax, because you can't pay tax on debt. So then eventually when shares are sold to pay the debt, it's just paying off debt, right? Yeah. Um, there's that side of it. And then there's just the side of complete control as well. So usually you'd have shares in a company and maybe one share, one vote. But the way he's done it is he's split it up into, I think, three different categories. But the two main ones, you have A, which is public, one vote, one share. Ship my chip category. Yeah. Basically. But then you have category B, which is, uh, Elon's category, and so each of his shares carry 10 votes, meaning he'll have, like, 85% control of the company, no matter what. Um- And, and if, if we remember at the same time that it's xAI, it's not, it's not solely SpaceX. And so it's just another AI money, money-raising thing potentially,'cause- Mm … everyone else is doing it at the same time. So, uh, Google just made an offering with Gemini. I can't remember how many billion dollars they raised, uh, selling shares. And at the same time, Anthropic and OpenAI are due to go public soon. Um, or they've expressed for interest or filed to go public, et cetera. And so it… the way I see it is like all of these companies are just going, "Okay, AI's like the, the hot topic right now. We'll just sell a load of shares and make some money." Uh, but, but the really bad thing is these are all at like such high market caps and valuations that if the inevitable crash does come, not saying that it's a complete bubble, but every new technology you have the hype phase, then a, uh, some kind of correction and pullback. And when that happens, that's gonna be a huge portion of the stock market that goes because it's all gonna be AI. So you'll have those four plus, I don't know, things like NVIDIA and, uh- Mm-hmm … yeah, it's just crazy. So you heard it here first, ladies and gentlemen, buy the dip. Buy that dip. When it comes. When it comes. Just wait, just hold onto your pennies and then buy that dip when it come. There's a top tip for our seven new subscribers that we've had in the ni- last 30 days. Welcome. Welcome to the Temporally Scripted family, and we appreciate you. Yeah, leave a comment. It'd be good to hear from you. Yeah. Fantastic. And, um, anything else on this, uh, IPO, or are you already in? You got your bag, you're ready to go? Uh, yeah. I definitely have nothing, nothing going in this whatsoever. Again, obviously not financial- Our share portfolios- … looking good. Right? But yeah, not financial advice, as we would never give that on Temporally Scripted. But yeah, until the next one, thank you for joining us, guys. Don't forget- Okay … like, subscribe, and we'll see you next time. Thank you, Adam. Bye, everybody.