The team discuss the SpaceX IPO and Broadcom results and look ahead to FeverTree, Halma and Oracle

Join the guys as they talk through the SpaceX IPO and what UK retail investors need to know if applying for shares (timing, pricing, documentation etc). Plus there's a look ahead to results from FeverTree, Halma and Oracle and upcoming podcasts.

Transcript

SPEAKER_00 0:05

Hello everyone and welcome to this latest edition of the Jerzy Fi podcast. I'm joined as usual by James and Ian. Hello, gents.

SPEAKER_02 0:14

Thanks, Dave.

SPEAKER_00 0:15

Um, just to kick things off, uh like to flag up to listeners that um on June the 24th, we've got our first ever webinar. Um so if you've got questions about Japan, about Europe, then you should definitely plug in. Uh, we've got the uh AVI Japan Opportunities Trust uh presenting everything uh uh about Japan, a very interesting topic at the moment. Um Sanyo is in their portfolio. I remember going back, you know, when I was a kid, they used to make videos and alarm clock radios and stuff. I don't know what they do these days, so this will be the perfect opportunity to find out. And of course, we'll be also joined by the um the JPM Morgan uh European Opportunities Trust. So um, some really good um insight um for listeners there. It's free, it's online at 6 pm, 24th of June. So join us for that. Um after that, what's been going on this week, chaps? And blind me, it's been uh fairly busy week, isn't it? Quite a lot of news going around. SpaceX and markets and all sorts going on there. Ian, what are you what are you seeing?

SPEAKER_02 1:12

Well, Steve, what's really fascinating for me you know, must have. So I actually saw a tweet earlier today as how do I avoid owning SpaceX? Now this is interesting because what did we say on Wednesday? We were talking about the Dow Jones indices and uh all the other indices, including SpaceX, straight away, which is really unusual. Well, there's been a bit of a change of heart here, and now it turns out SP Dow Jones, the index compiler, is saying that none of these IPAs are gonna go in for a year, which is weird because you know I know at the valuation that we're talking of 1.75 trillion, SpaceX is going to be in the top 10 of the SP 500. Same with anthropic, same with the AI, and yet none of these companies are gonna be included apparently in the next 12 months.

SPEAKER_00 2:10

It just makes me wonder. I I mean, I wonder if um SP are seeing this as um just a bit of a complete shake-up of the territory. So they've had um a system in place, um, they were talking about changing it, but simply because of the scale of SpaceX. I mean, we've we've had nothing ever before of this scale um listing in the past. So it'd be really interesting that maybe they're just thinking we've got to rip up the rule book and make a new set of rules. So that would seem to be what SP are thinking.

SPEAKER_02 2:37

Yeah, maybe. I mean, what you need to know if you're a retail investor and you want to go for it, so the IPO opened yesterday, it runs until 7 pm next Wednesday, the 10th of June, but it might close earlier if applications are more than the allocation of the stock. Official pricing is going to be Thursday, the 11th of June, and the first day of training will be Friday, the 12th of June. The ticket is going to be SPCX. We know what the price is because the company said it wants the price at $135. You can buy it if you're a UK investor, but if you're buying it in an ICE, a lifetime ICER, or a dealing account, you have to fill in what's called a W8BEN form, which allows you to own US stocks. Okay, if you're buying it's a really straightforward, isn't it?

SPEAKER_00 3:33

It's and it's all to do with basically getting dividends in the streets. Your platform is a good thing. And also that won't be relevant because SpaceX is not gonna be paying dividends anytime soon.

SPEAKER_02 3:41

Um, no, but you do need to do it unless you are buying it in a SIP, um, and then you don't need to fill in the form. It's also worth noting, some platforms are putting restrictions on dealing. Now, a friend of mine sent me something that Fidelity had sent, which is saying that if you flip your shares in the first 15 calendar days of trading, so before the 27th of June, you will be blocked from buying other new issues on the platform for several months. Okay, so do read the terms and conditions. I mean, I'm not sure. It's not just about the buying, it's just about the selling.

SPEAKER_00 4:19

I don't I don't know realistically that there's that many options, if any options, for UK retail investors to actually get in on the IPO itself. That there has been talk about Robin Hood markets might have an allocation, um, but I mean it seems to have been a bit um a bit opaque about whether that's true or not. Um so ultimately you're really looking at secondary market. Um, and what's unusual about the 135 price is I mean, normally a company will go to market and say, well, this is the kind of range we we're expecting. It might be say 140, it might be say 120, something in that range, but they come at me with a hard and fast figure. This is what we want to raise the money at. So again, it will be a test to see what the appetite is from the markets. Who don't forget um this is going to be coming on a huge valuation. So it's it's not you know, it might have lots of growth opportunity, but it's gonna be how much you need to pay for that growth. So you know, I'll be happily watching from the sidelines for the first six months, I think.

SPEAKER_02 5:13

Yeah, absolutely. No, and and if we are lucky, we might be speaking to a senior UNI Steve might be talking to a senior US analyst on this stock on Monday. So if that's if that happens, we'll get that podcast up ASAP.

SPEAKER_00 5:27

Yeah, absolutely. It's uh I mean it'd be fascinating to get you know a kind of a professional eye view into this. I mean, most fund managers are interested, they're not about to tell the likes of us and retail investors, you know, what they're planning to do. No, um, so it's gonna be all after the market, but I just I just think it's worth going to read stuff we've written on our website about the IPO and just to give you uh heads up about the kind of risk you're taking as well as the opportunity. So you need to always balance those two things. Opportunities can be grand, uh, great companies don't always mean great share prices, so you know just take that abroad.

SPEAKER_02 6:00

And meanwhile, a bit of a mixed week for tech, Steve. We had Broadcom and we had CrowdStrike, didn't we? And now here we've had Raspberry Pi.

SPEAKER_00 6:07

Yeah, I mean it's been as absolutely mixed. Uh, I mean, I think Broadcom and CrowdStrike, you you can probably argue that two that both companies have been affected by the same fundamental issue, is that they had such strong runs into results. I mean, CrowdStrike was up about 60% year to date. Uh, so they came off 10-12% or so, and realistically, it wasn't about the growth opportunity, it's mainly about already high expectations weren't pushed higher still. So investors kind of took a little bit of money off the table, and that's not to be that's not not anything in my view to be worried about. It's really a case of taking a little bit of the the kind of the pressure out of the balloon, and that's probably a good thing in the long term. Fundamentally, I think both companies look very strongly positioned for the long term, both in uh their individual market semiconductors and um and and cyber security and in the wider uh AI ecosphere as well. Uh RPI at Raspberry Pi today, you know, it hit it out of the park again. I mean, I think you you wrote about it last time, and it was just uh staggering. It keeps lurching up and lurching up and lurching up, but it does look like a really uh interestingly positioned company. 4250 now, so over two billion quids worth of companies. Is it really? Um, so yeah, again, you just have to think about valuation. Um, you know, just chasing yesterday's news isn't always a sensible way forward. So make sure you just have a look at what is the growth opportunity and how much you've been asked to stump up. Go and have a read. Again, there's a good analysis piece on our website if you want to know more about um Raspberry Pi.

SPEAKER_02 7:35

James, I'm sorry, we've been wibbling on about tech here. Um, what's been going on in your world?

SPEAKER_01 7:40

Yeah, let's talk a bit of cosmetics here. Yeah, so I just see the FCA finally, finally ended its probe into uh potential market abuse at Revolution Beauty. This one's been an absolute dog of a of an issue since coming to market in 2021. Came at 160p after today's rally, less than 5p. Um, so there's a there's a bit of a turnaround underway here. The co-founders are back, but lots of headwinds, US tariffs, the beauty markets slowing in the States, still got debt. So, you know, investors really need to do their homework before they even think about looking at this one. Um, another one that caught my eye was Remy Cointro, a bit of spirits action for you in. Um, results weren't great, but slightly better than the market expected. And the the new CEO, Frank Murrelly, uh launched the bold turnaround plan. Now he reckons he can uh grow operating profits by 100 million euros in three years, which seems quite ambitious. But um, yeah, that that spirits market read will be interesting with fever tree reporting next week.

SPEAKER_00 8:36

James, it's really interesting because uh contract's actually right back to my childhood. It used to be be one of those kind of um uh you go in your mate's house for a party and there'd be a bottle of contra in the drinks cabinet, and you you try and replace what you drink with water. But then there's been a brilliant advertising campaign recently. You may have seen it. It's a this chap who looks a bit like Burt Reynolds in the 70s, walking along the beach and just looking like the bees' knees, and his advertising contra a really good advertising campaign.

SPEAKER_02 8:59

Oh, brilliant!

SPEAKER_01 8:59

Yeah, very very retro.

SPEAKER_02 9:02

Well, um, I I'll I'll bring you down a little bit with the UK construction PMI, which uh was a bit of a shocker. SP Global put this out midweek. Um, worst reading and the biggest drop since the pandemic six years ago. Um, unfortunately, purchasing managers are facing falling workloads, so fewer contracts, they've got rising input costs and supplier delays. So they're feeling really gloomy. And dare I say, it's the house builders which have got the worst reading. So, yeah, we we've been cautious on them. The data that yeah, the the sentiment in the industry is now coming through loud and clear as well. It's an avoid.

SPEAKER_00 9:41

And what I know you've been looking at for next week, who's exciting you?

SPEAKER_02 9:45

Well, there's a few of mine actually, Steve. There's a couple of renewable trusts coming, but the big one's gonna be Halmer, FTSE 100, quality growth. Um, it's had a good year, it's had a better year than the index, but you know, today, for example, it's down what three, four percent. Um, just because it's a risk-off market, and I think people feel these things have had a really good run. I actually think it might be. Well, I'm keeping my fingers crossed anyway. What about you?

SPEAKER_00 10:12

Yeah, well, I mean, the big stories over in the US and in the tech space in particular, uh, of course, um uh Oracle and Adobe, and I've looked particularly at um Oracle. I mean, I think that the big question here is obviously part of this whole kind of um AI infrastructure um ecosystem. Um, the big challenge for investors has been about this level of capex, and it's it's recently been tapping up um huge amounts of money. Um February, I think it launched a $45 to $50 billion uh fund uh cash call. It it went it's tapping bond markets, it's tapping equity investors. So there's there's a lot going on. There's that they're really raising the stakes. Um, they're very aggressive about the opportunity, but ultimately they're you know their cash flow is starting to you know weaken a little bit, and you just have to wonder whether or not they're this the overspending to meet this demand. We don't know, we might get more of a sniff. Um come uh, I think it's after the market closes next Wednesday.

SPEAKER_02 11:07

Right, gotcha. Well, folks, that's about us. I think we're out of time for today, and it's uh weekend coming up, but watch the skies for uh a special pod from Steve and I, maybe Monday, maybe Tuesday morning, depending on uh how quickly we can get it out on this SpaceX icon.

SPEAKER_00 11:24

And also, uh Ian, as well, you're doing another pod with a with a Reit, I believe, on Monday.

SPEAKER_02 11:28

Oh, I am it's gonna be a busy day for pods on Monday, Steve. Yeah, we've got Richard Shepherd Cross from Custodian Reit coming on. Cannot wait for that. Richard is great value, it's been out of faith for years, hasn't it?

SPEAKER_00 11:38

So it'd be interesting to see what his take on that is.

SPEAKER_02 11:40

Discounts have been narrowing across that sector, and there's been MA. I think there'd be lots to talk about there. Okay, so uh with that, we'll wish you good weekend. Cheers,