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- [00:01]
Carol Massar
The thing about AI for business, it may not automatically fit the way your business works. At IBM, we've seen this firsthand. But by embedding AI across hr, IT and procurement processes, we've reduced costs by millions, slash repetitive tasks, and freed thousands of hours for strategic work. Now we're helping companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business.
- [00:29]
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- [01:15]
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Ed Ludlow
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- [01:46]
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Bloomberg Audio Studios Podcasts Radio News this is Bloomberg businessweek Daily reporting from the magazine that helps global leaders stay ahead with insights insight on the people, companies and trends shaping today's complex economy. Plus global business, finance and tech news as it happens. The Bloomberg businessweek Daily podcast with Carol Massar and Tim Stanweck on Bloomberg radio.
- [02:16]
Ed Ludlow
Space X again 17469 it's moving fast. Up almost 40. No, excuse me, up almost 30% here in the trade. Hey, one thing we wanted to point out and we want to continue with our all team coverage here. Elon Musk earlier this morning in a live stream on another one of his platforms and companies we are talking about X. Here's what he had to say.
- [02:37]
Nick Collis
There are always problems on earth.
- [02:38]
Ross Gerber
There are always problems on earth.
- [02:39]
Nick Collis
There are always things that we wish to be better that we want to solve here on earth and we should solve them. But there also have to be things that get you excited about the future that make you glad to wake up in the morning because you can't wait to see what happens next and that's the future that SpaceX wants to bring to you.
- [03:01]
Ed Ludlow
All right, that of course was Elon Musk on a livestream on X this morning. Felt kind of spacey there to stand back.
- [03:07]
Tim Stanweck
It did. It also felt very familiar. If you've read the S1 for Space X, it felt like I was, you know, reading that all over again. This is the messaging that Elon and company want to get across that waking up in the morning, you can't wait to see what happens next. The future that Space X wants to bring to you.
- [03:22]
Ed Ludlow
All right, guys, so let's bring back Bailey Lipschultz and Ludlow of course, Bloomberg News IPO reporter Bailey Lipschultz and host Bloomberg Tech on Bloomberg Television, Ed Ludlow. I mean, is this all about the future and the valuation of this. We have talked so much about the valuation of the Space X company now and is it all about future expectations, which is often what you do when you kind of buy into Elon in his story and his companies.
- [03:50]
Carol Massar
Yeah. What investors have had to understand is an already quite diverse business that has lots of different arms and then over a very distant timeline, things happening in a different order. So SpaceX still has a sort of guiding mission of making humankind a multi planetary species. One thing I would note and you know, again, all we can do is go back and read the documents. It's stated in black and white, but part of Mr. Musk's compensation package is literally tied to the goal of establishing a human colony on Mars. And so he doesn't really fully realize his stock based computer without achieving that goal. You know, let's for a second give some sympathy to the Business Week listeners somewhere around the world that is hearing that for the first time.
- [04:35]
Tim Stanweck
Yeah,
- [04:37]
Carol Massar
the problem is, is that, okay, so Space X wants to put human humankind on Mars and actually in the interim on the Moon. It's all laid out for investors, but the business in the future has nothing to do with that.
- [04:47]
Ed Ludlow
Well, what I want to ask you, Billy, come on in on this. When we go to valuation, let's say Elon doesn't do that, but is this, is Space X really largely an AI company going forward and is it about what he does with data centers in space and so on and so forth when it comes to the valuation and kind of growing into it?
- [05:04]
Well, I think Ed and I were one of the first, if not the first to really call out the fact that Space x pitched the 26 and a half trillion dollar AI story. So that's terrestrial data centers that's orbital data centers that's potentially making GROK a real rival to Claude and Chatbots. Pretty pie in the sky ambitions again. It's really when I talk to some critics, they say, well, you can't disprove a 26 and a half trillion dollar TAM because I don't know, you say it's real, everyone else kind of buys into it. But that's the vision. I think when you talk to investors and people who are Musk believers, Mars, this idea that they're going to be the Union Pacific of space and comparing Mars to California is a big part of that pitch. But the actual dollars and cents in the interim will come from the ability to provide compute via these orbital data centers.
- [05:53]
Tim Stanweck
One thing I like about California is you can just go outside and enjoy it without wearing a spacesuit. But that's neither here nor there. And I'm going to go back to this over and over again, which is what we know about 2025 revenue from space X, the segments, the reporting segments. This is what we're going to be watching in the future and remind Everybody, space about 22% of 2025 revenue connectivity, which of course includes Starlink, about 61% and then 17% is AI. In terms of the growth opportunities in those three segments, which is the one that investors are most bullish on?
- [06:28]
Carol Massar
Yeah, in the immediate term. In the immediate term they are most bullish on something that's quite recent, which is Space x. I remember SpaceX owns
- [06:37]
Tim Stanweck
Xi as of 20, early 2026, very
- [06:40]
Carol Massar
quickly pivoting itself to be a NEO cloud. In other words, renting the compute capacity on Earth, a data center that's terrestrial in nature to to Anthropic. And Google Anthropic agreed to pay $1.25 billion per month.
- [06:54]
Tim Stanweck
It's a lot of money.
- [06:55]
Carol Massar
Google more than $900 million per month. Musk has made a big deal on on the socials about these being short term. They can pull the plug after 90 days but you know, the investors are like, wow, that's so smart.
- [07:08]
Tim Stanweck
And it's also real money.
- [07:09]
Carol Massar
In the very near future you make
- [07:11]
Ed Ludlow
a real accounts receivables. Right.
- [07:13]
Carol Massar
Again, this is so difficult. I think, you know, the shares now are at a 30% gain. I don't have the ticker in front of me.
- [07:19]
Ed Ludlow
Yeah, 30% higher.
- [07:21]
Carol Massar
You know, people say okay, right. So you guys are telling us that in the future you're going to make all this money from data centers in space. And what that means in practice is a very, very big Satellite where the solar arrays are just ginormous. But actually in the 2025 financials is buried some of the answer. Connectivity, which is the bucket for Starlink is basically cash flow positive. It's a cash generating business. SpaceX has thousands of Starlink satellites in deployment around the earth. And so what the existing investors do is extrapolate out and say I can see them doing that with data centers.
- [07:55]
Tim Stanweck
I think it's also something that's really tangible for a lot of people who've experienced SpaceX. I mean I've noticed advertising on United flights, United regional jets now having Starlink, they're trying to roll it out across the entire fleet. It's a pretty incredible product that a lot of people have had access to. Unlike something like actually experiencing a launch.
- [08:13]
Ed Ludlow
Yeah, I mean I don't own a spot, you know, a rocket yet.
- [08:16]
Tim Stanweck
But you do have Starlink.
- [08:17]
Ed Ludlow
But I do know I do have Starlink and it is a pretty incredible product and we increasingly see it. If you jump on an airplane you're increasingly seeing it kind of spread out in terms of kind of more normal, should I say usage usually. You know what's interesting is Tom Keene and Scarlet Fu just had Jim Chayinos noted, Bear noted skeptic talking about among the Elon universe because he's pretty skeptical about most of it it sounds like. But he talked about Starlink being a real business worth a couple of hundreds of billions of dollars. So you know, is again, so the bet today is on that or like what?
- [08:49]
Carol Massar
So just really quick and I'll keep it really short. You know, it's interesting that Channels acknowledges the merits of that business. The issue is in this IPO process is that the prospectus set out a total addressable market of 28.5 trillion and Starlink and the launch business combined was only 2 trillion of that.
- [09:06]
Ed Ludlow
And even Ed, when we look through the notes from the sell side analysts, again not publicly published, for the most part circulated with investors, the pitch is the fact that they're going to throw off hundreds of billions of dollars in revenue from AI. The ability potentially to hit $1 trillion in sales. According to Evercore ISI at just after the end of the decade is predicated on artificial intelligence. And when you think about it, Starlink is a terrific business. It's a great business. But the multiples, if you looked at a Verizon or an AT and T or a true competitor are not what the vision would be.
- [09:38]
What are they making off of X right now?
- [09:40]
Carol Massar
Well, there is a big disconnect here, which I'm staring at my screen, I might be able to answer at some point in the next four hours. But if XAI is going to sell all of this AI software to other companies on planet Earth, why would they rent out all the compute capacity that they built to Anthropic and Google? Why aren't they using that capacity to train more of their own models? Or is it a signal that people aren't using the models, they're not being run? On the inference side, we don't really have an answer from that. But that is what the bear would say. They would interpret that signal as, yes, okay, that's a pretty profitable business potentially on paper, but what does it tell us about how much progress X is making with selling its software?
- [10:23]
Ed Ludlow
Good question.
- [10:24]
Carol Massar
That's a very near term headache that people go back and forth on.
- [10:28]
Tim Stanweck
Bailey, over the next few months we're going to be sort of glued to different analysts who've come out, who come out and say that they've initiated coverage and what their coverage looks like. Just in terms of chatter on the street among analysts. Is there a general consensus, A general view? And again, every, every bank pretty much was involved in this. So there's, there's sort of a challenge in dissecting what the banks who were involved with versus what their analysts are saying. But is there any consensus there?
- [10:54]
Ed Ludlow
We'll get initiations from the banks that underwrote this deal in 25 calendar days. So that's when we'll get the view. When you look at Oppenheimer initiating, I think they had $190 price target again, that's 12 months from now and we're currently trading at 171. So take that with a grain of salt. I think the, the big debate when you just look at the analyst community is Tesla is the most hotly debated stock from the sell side. 30 buys, 24 holds you a hold is essentially a sell, let's call what it is and nine sell ratings, which is telling clients actively short this stock. So when you're looking at an investment community that hasn't bought into the Tesla vision, and the parallels are pretty darn stark in that it's bet on Elon and sped on futuristic technologies toward the end of the decade, if not a decade out, it's going to be fascinating to see what the reception is on
- [11:43]
Tim Stanweck
that perspective and maybe it gets us to a discussion point. And we'll be revisiting this in the next few hours with you about a potential Tesla tie up with Space X. This has been banded about for months at this point.
- [11:56]
Carol Massar
So the idea that Space X would merge with Tesla has been around for some time. People still believe that that will be the case to different degrees. Some see it as being completely imminent, others see it as being something that might happen in 2027, 2028. Tesla and SpaceX have never said anything publicly about it. Right. This is all based on the thesis of some investors that have spoken publicly. But also when SpaceX merged with Xi the Friday before that was confirmed, we, we reported that, that it looked like Space X was going to merge with X, but they had looked at multiple options and one was a discussion between SpaceX and Tesla, company to company about what that merge would look like. And also in that some detail that some Space X investors basically went to Elon, those that had access to him and said wouldn't it be a better idea for SpaceX to merge with Tesla rather than X? I had a lot of debt, it was burning cash. Tesla and SpaceX are hardware companies. They're more analogous on vertical integration. In the end it's academic. You know, SpaceX merged with X and then it went public and the biggest IPO in history. But it won't go away that idea. The thing is we just don't know.
- [13:10]
Ed Ludlow
Well, I will do want to call out that an earlier interview on CBC when Chotwell did say that it would make Elon's life easier. Just reading from the transcript saying quote, there's no question that there's synergies between Tesla and SpaceX in our futures. Definitely there's a convergence of, of kind of what we're all trying to accomplish in the future. That's an acknowledgment that it is a possibility and that it does make.
- [13:30]
Carol Massar
It does also exist with tariff app which we can get to later in the hours we have together. But yeah, synergies.
- [13:35]
Ed Ludlow
But it's also you've got companies that are buying stuff from each other and creates kind of a demand.
- [13:40]
Nick Collis
Yeah.
- [13:40]
Ed Ludlow
Automatically for various Elon product.
- [13:43]
Even when you think about the fact that a big part of the pitch at Craig, if I'm wrong for Tesla is Optimus. And when you talk to people who are buying into the 2040, 2045 vision.
- [13:53]
Nick Collis
Sure.
- [13:53]
Ed Ludlow
Why wouldn't you use robots on Mars to build out the infrastructure?
- [13:58]
Carol Massar
One more immediate answer rather than getting to Mars is that those satellites in orbit that are data centers, you know, they have GPUs on board. When you're running inference, you're running the models. Excuse me, at the edge Actually, Optimus and the Robotaxi business of Tesla. There is localized compute in the brain, so to speak, of the humanoid robot. There's a chip, but there is still some element of cloud computing that's needed when you run an AI model at that scale. Good. That would be a good first customer for Starlink. For StarLink. Sorry, for SpaceX.
- [14:31]
Tim Stanweck
But I'm glad you brought up Starlink, because how are these all entities all going to communicate with one another?
- [14:35]
Ed Ludlow
Right, Exactly. And also 1 million robots on Mars, is that hitting the goal of 1 million people on Mars?
- [14:42]
Tim Stanweck
Terrell, you're opening up a real can of worms.
- [14:44]
Ed Ludlow
I am, I am.
- [14:45]
Tim Stanweck
They are not people yet.
- [14:49]
Ed Ludlow
Score. Hey, listen, folks, if you're just joining us, I'm Carol Massar along with Tim Stanweck, Ed Ludlow, Bailey Lipschultz. We are talking on a historic market day, no doubt about it. Shares of Space X climbing in their first day of trading. Company making history with a $75 billion IPO sold for 150 and it's opening trade right now. The stock, it's gone up as much as 30% in this first day of trading. Right now we're looking at a share price of 167,397 a share. That means good for a gain of just shy of 29%. And Elon, go buy dinner for your family because you're a trillionaire now. I'm just going to put it out. We continue with all hands on deck. Carol Massar, Tim Stanwick, Ed Ludlow, Billy Lipschultz, and this is Bloomberg businessweek Daily, a special edition, the Space X ipo.
- [15:36]
Tim Stanweck
Stay with us. More from Bloomberg businessweek Daily coming up after this.
- [15:44]
Carol Massar
So there's a lot of noise about AI, but time's too tight for more promises, so let's talk about results. At IBM, we work with our employees to integrate technology right into the systems they need. Now a Global workforce of 300,000 can use AI to fill their HR questions. Resolving 94% of common questions, not noise. Proof of how we can help companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business. IBM.
- [16:14]
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- [18:46]
Ed Ludlow
Carol Massar along with Tim Stanwick and of course Bloomberg Tech host Ed Ludlow. You gotta love it on a day when you look at the most read stories on the Bloomberg terminal in the past eight hours and six of 10 somehow are either about Space X are related to Space X. There's also a story about Nixon 5 crashing New York City weddings. So I'm just giving you an idea of what everybody's reading on the Bloomberg this Friday.
- [19:10]
Tim Stanweck
Well, I think I'm guilty as charged for reading a lot about Space X today. Shares as we heard from Charlie just now up 28%. They were up as much as 30 let's go ahead and call it 30.8% earlier in the session. They did open today 11% higher than that IPO price yesterday. Looking at volume, it is a lot of shares are trading hands about 336 million according to the latest instant count on the Bloomberg terminal.
- [19:35]
Ed Ludlow
Yeah, it's, it's pretty historic and fun to watch, but it feels like very orderly and kind of mellow. We were just saying, hey, we want to get to a trusted and thoughtful voice on all things Elon Musk and his universe. Max Chakin is with us. He's Bloomberg Businessweek columnist. He's host of Everybody's Business podcast here at Bloomberg, author of the Contrarian, Peter Thiel and the Rise of the Silicon Valley Oligarchs. He's here in studio along with me and Tim and of course, the host of Bloomberg Tech at Ludlow, Max.
- [20:02]
Max Chafkin
Hey.
- [20:02]
Ed Ludlow
Hey. So how are you thinking about this? You wrote a story back in April, and I think the headline on it was that Space X's IPO is Elon Musk's most Audacious product launch yet.
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- [20:14]
Max Chafkin
I mean, when I've been spending some of today thinking about the last Elon Musk IPO back in 2010, and you think about then the, it was at a not a super high valuation. The economy was not great. There were, there were, you know, relatively, I'd say, low expectations around that company. And also, Elon Musk was incredibly popular. Right. He, he didn't have this kind of political thing where, where you have a lot of people who are suddenly, you know, really mad at him, really mad at his companies tying, mad at data centers and so on. So I think in a lot of ways Space X is, is going into this market that while it's very inflated, it's hard to see where, how much room there is to grow.
- [20:59]
Tim Stanweck
But it does seem like, Max, that in recent weeks and months, the chatter around Elon's political actions over the last couple of years, what he, his relationship with the president, that has not really been the focus of the way that people are thinking about this ipo. And in fact, it doesn't seem like it's come up much in the coverage. Certainly totally. There were some protests inside the NASDAQ today, or I should say some signage outside the NASDAQ today. But I don't know I don't know
- [21:31]
Ross Gerber
how else to describe it.
- [21:32]
Tim Stanweck
How would you describe it?
- [21:33]
Max Chafkin
It was an effigy, maybe.
- [21:35]
Tim Stanweck
Effigy, Is that the word?
- [21:38]
Max Chafkin
I think he is still very much involved, you know, in, in our politics. He's. When you look at the lists of donors for 2026, he's, he's pretty high up there. He and, he and Trump, of course, are back together. Their friendship is back on. You know, SpaceX just won a couple of big contracts related to the Golden Dome. I think what's happened is that the AI story has basically swamped everything else. And that's especially true when we're talking about the sort of financial side and Wall street and everything. I mean, the bankers who have been pushing this are certainly not pitching Elon Musk's connection to the Trump administration. At least I wouldn't think explicitly.
- [22:21]
Ed Ludlow
It wasn't in the S1, was it?
- [22:22]
Max Chafkin
The AI story is risk factors, right.
- [22:25]
Anthony Hughes
Political.
- [22:26]
Carol Massar
Well, well, no, I mean, the main issue in the risk factors. Right. You just, I'm just recounting is that it also spells out as clear as day that the entire success of the plan is, is dependent on Elon Musk leading it. Right. You know, that it says if he were to go away, that would be it. And that in the last, you know, Max, Max and I risk. It's so weird. I'm like thinking back, Was it even 2024 that we wrote it or was 2025 24? I believe everyone's just trying to make sense of like, okay, what was it that Elon Musk was trying to achieve by aligning himself in that political bucket even outside of the President? You know, people ask me all the time at the moment, I mean, literally this week, is there anything about Space X going public in the President Trump's term? Don't know the answer.
- [23:22]
Ed Ludlow
Yeah, I think I asked you, like, would we be having a SpaceX IPO
- [23:27]
Max Chafkin
if President Trump not a $2 trillion. I mean, I think so much of the run up in the, in the AI market has to do with the White House's, for better or worse, the White House's policy on AI, which has essentially been let them cook. You know, let, let's, let's take rip out all the regulations, let's get data centers going as quickly as we can and so on. And so much of that is, you know, is kind of baked in to the Space X pitch. I also think, as I said, you know, the S1 says that US federal contracts are about 20% of Space X's revenue That's, that's down, it's falling, but that's still a significant amount of money. And, and as I said, they are getting more contracts. As much as this is kind of a sideline for Space X at this point because the future is Starlink. The future is, you know, data centers and space and Grok and all that stuff. The present very much is, is government contracts and they have done well during this period. I think we're talking about Elon Musk being a trillionaire. You know, I'm not sure that he's a trillionaire if he doesn't have that political adventure that he had, you know, in 2024 and 2025.
- [24:39]
Carol Massar
The one thing I would observe right is that we keep forgetting about what is SpaceX on the hook for? Space X and Starship are a massive part of America's ambition to get back to the moon. In fact, they are literally now on the hook to make starship work in a certain time frame where they're required to demo that this year. And that's so fascinating because that isn't codified in the prospectus, it's not even discussed.
- [25:04]
Tim Stanweck
How are they doing with respect to Starship?
- [25:06]
Carol Massar
Well, they've just done the 12th test flight and the, the 12th floor sort of mission, I suppose where it carried no payload of any significance was a dummy, but it was with a brand new architecture, basically top to tail. They re engineered it. And I think what Gwynne Shotwell, the President and CEO has been saying this morning is that in the coming weeks they'll do 13 and 14. The whole point of it is the economics work because it's reusable, so it's very big, can carry a lot of stuff into space. But they've never actually successfully landed both parts, that booster and the spacecraft back on Earth. And that if it's going to carry human beings is a test that they should get to soon and they haven't
- [25:42]
Max Chafkin
taken anything to orbit yet. I mean, and that for, you know, that's going to be a, that's going to be an important milestone. I mean it's important to say Ed's right, like the Artemis mission is kind of in a bind if Starship doesn't come through. But all of SpaceX is in a
- [25:58]
Carol Massar
bind if starship doesn't say one thing real quick. So you got, I'm just recounting what's happened. But in the 12th test flight they deployed dummy Starlink satellites. It's like a PEZ for, you know, for fans of the pez, Candy you have that in America, right? Yeah, obviously. Duh. Duh.
- [26:15]
Chase Sapphire Reserve Ad Voice
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- [26:18]
Ed Ludlow
For my time even.
- [26:19]
Carol Massar
I'm sorry.
- [26:20]
Tim Stanweck
You can go to the PEZ Museum in Connecticut while you're here.
- [26:22]
Carol Massar
Okay. Dear America, I'm sorry.
- [26:24]
Ed Ludlow
There is probably an Elon Pez. I don't know that it was definitely
- [26:28]
Carol Massar
a serious point to this. Basically how the Starlink satellites deploy out of starship. There's a slot, they come out the side kind of like. And they get pushed down and down and down like pez. But they did demo the ability to do it, but it was. The payload wasn't real. They were dummies. So I'm just stating that.
- [26:43]
Ed Ludlow
Yeah.
- [26:44]
Carol Massar
The record.
- [26:44]
Ed Ludlow
Does Elon have to be worried? I mean, Jeff Bezos has become rather chummy with the administration and do we have to ever worry about Blue Origin and his rockets being able to do so?
- [26:55]
Ross Gerber
Some of what.
- [26:56]
Tim Stanweck
But they're also an integral part of the Artemis missions.
- [26:58]
Max Chafkin
Absolutely worried. Although Blue Origin had a huge setback recently and so. And, and that is why that.
- [27:04]
Ross Gerber
Because.
- [27:05]
Max Chafkin
Because Blue Origin and SpaceX are competing for this lunar lander. This lunar lander part of the mission. And, and, and you know, of course, you know, Blue Origin say they're, they're going to rebuild and everything, but this. Everyone I've talked to in this world says that it's a huge setback.
- [27:21]
Tim Stanweck
We're speaking with Max Shafkin, Bloomberg businessweek columnist, the host of the Everybody's Business podcast here at Bloomberg. He's author of the Contrarian Max the Carol mentioned, Jeff Bezos. We're going to talk about Blue Origin a little later in the program. Before we do that, you've spent a lot of years covering Tesla and the way that Elon Musk has led Tesla as a, as a public company and his relationship with investors. How should investors right now look at that over the last decade or so as an. As an idea for how he'll run this company and maybe even divide his time.
- [27:52]
Max Chafkin
It's kind of different, both public that. I'm not sure how helpful the early years of Tesla are to understanding this. I think, I think Space X really looks very similar to the Tesla of the last couple of years that the post AI pivot and where, where you have this very good business that, that is kind of being pushed to the side for, for reasons that either have to do with, with Musk.
- [28:20]
Tim Stanweck
You're talking business.
- [28:21]
Max Chafkin
Yeah. In the case of Tesla, it's the autos business, which, which is this very, very successful good business. It's the thing that everyone talks about. Elon Musk popularized electric cars, you know, in the United States. But, but for two years or so it's been deemphasized. You look at it, sales have not been growing. I mean, it is in certain ways a challenged business. And then you have this kind of futuristic robots, self driving cars piece of the business. Same thing with SpaceX. But the one thing I'll say is I think that the legacy part of Space X is actually a better business than the EV business. I mean, the EV business, as dominant as it was, never reached any kind of like monopoly status. Whereas SpaceX's launch business kind of is that there are competitive competitors. There are, there are parts of the business where they have more competition than others. But you know, as we're saying, if SpaceX has a, has a huge problem, NASA has a huge problem, a bunch of satellite makers have a huge problem. They really have the market, you know, more or less cornered in that, in that piece. And then you have this futuristic stuff that, you know, even Starlink to some extent is futuristic. But of course the data center thing, which is just like pure science fiction. So Starlink is like the robotaxi. Data centers are like the humanoid robots.
- [29:35]
Tim Stanweck
Not everybody thinks it's science fiction.
- [29:37]
Carol Massar
Just very quick. All the space investors that phoned me over the last week, thanks for phoning me. Interesting that SpaceX aren't encouraging you to come on Bloomberg Television and radio. They would, they, they also would make the case that it's not analogous to Tesla, but they would also say that SpaceX should get credit right now for being a much more diversified business than we talk about. It is more than rockets and they have a good interim. But for Orbital Data center and Ludlow
- [30:02]
Ed Ludlow
staying with us, host of Bloomberg Tech Max Chaff can thank you so much. Bloomberg businessweek columnist, host of everybody's business podcast. Check it out on the weekend.
- [30:11]
Tim Stanweck
Stay with us. More from Bloomberg businessweek Daily coming up after this.
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- [32:23]
Nick Collis
All?
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- [33:38]
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- [33:51]
Ed Ludlow
Yeah, certainly we're focusing on Space X. Get it? Just we were quickly talking before we got going. And you take a look at what's going on with Tesla. We've seen it up as much as 1 1/2% today. It's been down 3% in today's session. Right now, Tim, just to gain about half a percentage point.
- [34:07]
Tim Stanweck
All right, that's Tesla. But SpaceX certainly only moving in one direction, opening 11% higher than that IPO price yesterday, up as much as 30.8% right now, up about 27.3% so far. This looks like a pretty successful first day of trading. I think it's fair to say 355 million shares as we speak of traded
- [34:27]
Ed Ludlow
hands feels pretty calm. Carol Massar, Tim Stanback, also, Ed Ludlow, co host of Bloomberg Tech, of course, on Bloomberg Television Monday through Friday at 11am, who has been all things how long do you feel like you've been talking about this ipo?
- [34:41]
Carol Massar
Yeah, I mean, goes back to when we broke the story even the end of last year that the whole point of the IPO was oh, they needed lots of money to buy chips to put in space. And as I told you a few times this month, people laughed at that report at the time, like that's not why they would ipo. And then the prospectus hit and here we are.
- [35:00]
Anthony Hughes
They need money.
- [35:00]
Carol Massar
Yeah, they need GPUs in space, but yeah, they need money for that. Yeah.
- [35:04]
Ross Gerber
Yeah.
- [35:05]
Tim Stanweck
I want to bring in Anthony Hughes, Bloomberg News U.S. equity Capital Market markets reporter. He joins us from the Bloomberg News bureau here in New York. Just steps away from us, Anthony. Pretty successful out of the gate, I think it's fair to say. NASDAQ should be patting itself on the back right now.
- [35:21]
Anthony Hughes
Yes, Tim, I think for a IPO of this size, a 20%, 30% gain is, is a pretty balanced outcome, you know, from the bank's perspective. You know, obviously you never want to see the stock go down, but you don't want to see the stock necessarily go through the roof either. So, you know, 20, 30% for a high growth company too. I mean, you want to see a decent return. So, you know, I think people will go away and think this is a Relatively balanced outcome compared to a lot of IPOs we've seen in the past.
- [35:50]
Ed Ludlow
Yeah, it's interesting. You know, we've been talking with you as well. To the lead up, Anthony. I don't know what's top of mind. What have you been thinking about as you watch the trade today and what's important here?
- [36:01]
Anthony Hughes
Yeah, well, I think we've been looking at the level of volume and, and certainly out of the gate they got about 10% of the stock paired up at the opening print there. So that's sort of something you'd like to see to make sure it's an orderly outcome. I think the main thing, I mean it can be a little bit of an anti climax in some ways the first day of trading for a stock because we've said a lot already about this company. We're just seeing basically the results today. But it's fairly orderly. First day of trading started up 11%. I mean funnily enough, if you go back to Facebook in 2012 it actually went up 11% on the opening print too, but then finished flat. So it doesn't look like this is going to happen here for SpaceX, but sometimes these early gains can evaporate as the day goes on. But it's just one day of trading and there's many days ahead and anyone who's been a long term shareholder of Tesla knows that there's some tough days and some great days, but longer term Tesla did very well and I guess a lot of people are hoping to see something similar here. Yeah, on a larger scale and this company's got such a big market cap, it's obviously hard to expect that Space X will do something like Tesla and in terms of a relative gain. But, but you know, obviously SpaceX got big dreams and sort of unlimited hopes about what they can do in space.
- [37:14]
Tim Stanweck
I want to, I'm glad you brought up Facebook. We were talking about that just a few minutes as we came live to you before SpaceX up 28% at Ludlow. We're going to get to Nick Kolis in just a second. But before we do, just remind us today who can actually sell shares. This is a really important point because there's been a lot of discussion about, okay, who are the new one? New Centi Millionaires. Who are the new millionaires and who are the venture capitalists who have made billions on this?
- [37:36]
Carol Massar
Just a few rapid fire things. There's a big difference between economic ownership of this stock and voting power. So Elon Musk has 84% voting power right? And so he's locked up for 360, 66 days. But, you know, he is going to be a big seller. And he also has a big options packet that he can exercise. And then everyone else is kind of tiered. So after the Q4 26 earnings release, 20% of the existing shares are free of a lockup. Who can sell today is basically anyone that participated in the offering. The 75 billion. And what was so interesting to hear from the buy side today is like begrudgingly their participation in the open market as buyers. You know, loads of people didn't get allocations. You know, we have so much time. We can talk about the venture funds later, but, you know, even those that are subject to lockups, the venture funds will distribute the shares back to their LPs, which are endowments, pension funds. They don't just give them cash. Yeah, but those, they won't sell the stock. You know that. At least that's what people keep telling me.
- [38:36]
Ed Ludlow
Yeah, it's longer term right there. Stay with it. Hey, we're talking, of course, with Ed Ludlow, host of Bloomberg Tech. We've also got with us Anthony Hughes, but Bloomberg news ECM reporter joining us here as well. And then let's roll into the mix. Nicolas, just joining us here on set, co founder of DataTrack Research. Good to have you here. You're an independent financial advisory firm. Would you be advising institutional investors, retail investors, to own this one?
- [39:02]
Nick Collis
Well, what we do is we try to give people a framing to understand their decision. And by that count, the simple math obviously doesn't add up. This is a very, very expensive stock relative to any rational measure of value. But we're talking about Elon Musk, who has a tremendous track record of not just success, but convincing people that success is durable. So it's not a calculus based on valuation, it's a calculus based on faith. And plenty of people have a ton of faith and have made billions of dollars with Elon Musk in the past, and they're willing to give him a pass on this one because they think it can happen again.
- [39:35]
Tim Stanweck
I want to talk connectivity a little bit with you and the focus on really telecom Starlink when it comes to this IPO, it's in 2025, it was 61% of the revenue. As I was mentioning earlier, I think for a lot of people who, you know, haven't been to a rocket launch or actually, you know, are big users of the AI tech that, that Space X has, maybe Starlink is the most tangible part of this business. That they've interacted with. In your view, that's, that's a pretty good business, right?
- [40:03]
Nick Collis
It is a phenomenal business. It is a trend.
- [40:06]
Tim Stanweck
I mean there were so many years when we were talking about, and Ed was reporting on it, the possibility of perhaps that being spun off as its own independence traded company.
- [40:14]
Nick Collis
And there are prediction market contracts on that right now. Oddly enough, it is a truly disruptive business in the classic Clayton Christensen sense of the word. It's a new technology that offers a product to an underserved community and then builds up from there. So how Amazon started with books and then blew up to everything. Starlink started with rural customers and has blown up to everything. It's exactly the playbook investors want to see. And Elon as usual, has played it perfectly.
- [40:40]
Carol Massar
I just, you know, I just recap the numbers. You know, I find that so interesting that you're saying you can't do the math. You kind of can, you know. And what a lot of the existing cap table told me for months and months was how do I start to model for the orbital data center business? And what they would say is 2025, not the revenues from Starlink, but connectivity, operating income 4 billion and the scale of deployment and rate of deployment, literally the operation of putting it into into orbit. They just extrapolate out to space based data center. Can you use faith or hope and do the same on behalf of clients?
- [41:19]
Nick Collis
Unfortunately you have to.
- [41:20]
Carol Massar
Yeah.
- [41:21]
Nick Collis
There is no other option. There are no orbital data centers in space right now. Right. So you are betting on a brand new technology. And what you're betting is the guy who brought you the past couple of interesting technologies can bring you the next one. But it is a faith based process. It is not based in any math. You can rationally model. And I was a sell side analyst for a decade. I covered the autos. I know how to do a financial model.
- [41:40]
Carol Massar
Oh goodness.
- [41:42]
Nick Collis
You know, to a very strong degree. And this is not one of those analyses so people can do whatever math they want to do that sucks on the trade, where it wants to trade and the two may coalesce that they may not.
- [41:52]
Carol Massar
Real quick without betraying confidence. Do you have faith? In other words, did you tell clients like, look, this is a trade based on faith. We have faith, make the trade.
- [41:59]
Ed Ludlow
Yeah.
- [42:00]
Nick Collis
What I've told clients is if you want to put in for the stock, I gave you a range and I just went into the numbers. The average IPO since 1980 up 19% on day one. So that's the bogey 161 for Space X is an average IPO one day pop. If you want to look at 20, 25 was a 29% pop. So 174, which is right around where I think we were trading now 173 and change. So boom, 29% is the average IPO pop from last year. If you want to look at 1999, just to go bananas, that was a 71% one day pop.
- [42:32]
Ed Ludlow
I remember.
- [42:32]
Nick Collis
So that was. We all. Yes, yes, I certainly do as well. I was working for a Steve Cohen at the time and that was an amazing year. That would be a 231 close.
- [42:40]
Ed Ludlow
But Steve Cohen be buying this.
- [42:42]
Nick Collis
Steve Collins would have gotten an allocation and probably have sold half of it on the open and be trading the other half very intelligently because that's what he does.
- [42:50]
Ed Ludlow
That's really interesting. Hey, Nick Collis is with us. Co founder of Data Trek Research at Ludlow is with us. Anthony Hughes, you've been sitting by patiently here at Bloomberg News. You mentioned though Nick mentioned SpaceX. The stock right now is up almost 28% here, 172 and change in its first day of trading. Anthony Hughes, you've been thinking about the valuation, writing about it. Got a question for Nick, for us?
- [43:13]
Anthony Hughes
Yeah, well, I think one of the interesting questions, Nick, is, you know, we do see it with a lot of these hot IPOs that they come pretty, you know, they can come. It can rise pretty sharply out of the gate and then fall off pretty quickly in the weeks and months afterwards. I just wondered, do you think there's an argument with SpaceX that, you know, perhaps it could do something a little bit differently just because there's such a need for people to be buy the stock, the index inclusion and stuff like that. Do you think that could ever be a factor here in helping to sort of put a bit more of a floor onto the stock?
- [43:40]
Nick Collis
I think that it is a factor for the next couple of weeks because we have the Q entry I think on July 5th, if I recall correctly, 15 days after pricing. So you're going to see some offset of people who are owning this stock right now, selling it to the Qs when, when it gets included in the 100 past that there seems to be probably even match and they actually did earlier lockup expirations for employees and insiders than usual. So you actually compare the additional add of stock to the queues to the unleashing of stock from the individual owners that have it right now. So it should balance out. But I will make one broad macro point very important. Most IPOs don't work. Most IPOs underperform in year one and so to beat that those odds is relatively hard. Stocks take time to season. Management's take time to season. This is not a company that has a lot of prior public experience but
- [44:33]
Tim Stanweck
the executives have a lot of prior public market experience. Elon Musk for example. I mean when Shotwell for years the CEO has been talked about, not talked about as much anymore but being like the adult in the room.
- [44:45]
Nick Collis
Yes.
- [44:45]
Tim Stanweck
And she at Space X. So I think people could push back on, on, on the experience part of this a little.
- [44:50]
Nick Collis
That is fair. The Elon thing cuts both ways at the five year chart on Tesla and tell me that things been evaluated for the last three years. It just hasn't. So there is is Tesla the model
- [45:01]
Ed Ludlow
we should be looking at Nick, in terms of for Space X or that's not fair.
- [45:05]
Nick Collis
I think it's entirely fair because both are basically on a musk premium and a massive one. Tesla is going to earn maybe two bucks a share this year. Stock trades what 200 times that. So you're talking about big valuations in both names. And I thought it was interesting you know, looking at a Tesla at 1.5 trillion and this at you know, call it 1.92. You're talking about you know, two very large companies based on one person's vision but not a lot of cash flow. That's the common factor. And you could be a season management team but I don't know any other season management team that can hold those together besides Elon's teams.
- [45:39]
Ed Ludlow
Yeah, Ed, I want you, do you have a question for Nick? Because I know Nick's going to leave us after this segment so you know
- [45:44]
Carol Massar
the lockups are so interesting and like you know we remind ourselves the over subscription actually like you know what's crazy? 4x to 5x over subscription doesn't even seem that wild to me. Like look at what's happening in China market for IPOs like 20x sometimes. I digress. There's a lot of evidence that SpaceX employees wanted to buy more shares. And the unusual difference with Space X is the secondaries market. They've had regular liquidity windows. Might that be a difference this time?
- [46:12]
Nick Collis
It certainly could be but everything's a function of price, right? If this thing goes to 400 even the most ardent insider might be tempted to sell. So it's a function of price.
- [46:21]
Ed Ludlow
I'm going to say if, if the stock tanks a little bit it makes it cheaper for Space X to buy
- [46:26]
Carol Massar
it and merge the company very, very quick. Many times Space X was the leader of the secondaries. They bought back shares from employees and we never really reported on it. And that was true at the time.
- [46:37]
Ed Ludlow
So yeah, yeah, I just think there's just like so many moving aspects of this. Nicholas, thanks for jumping in here. We really appreciate it. The perspective and data was really helpful. Co Founder, Data Trek Research of course joining joining us here in studio, we're going to continue with Ed Ludlow, host of Bloomberg Tech. Our thanks to Anthony Hughes. Be sure to check out all of his reporting on the Bloomberg and@Bloomberg.com a member of our trusted Bloomberg News team.
- [47:01]
Tim Stanweck
Stay with us. More from Bloomberg businessweek Daily Coming up after this.
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- [50:55]
Ed Ludlow
Let's get to someone who we talk to a lot when it comes to all things Elon. He's owned and sold shares of Tesla, owned several Teslas, including the Cybertruck. He's been a fan and a critic of Elon, the person Back with us. So great to have here on this day. Ross Gerber, President CEO of Gerber Kawasaki wealth and Management Investment Management, joining us here in studio. Hey, Ross, are you.
- [51:20]
Ross Gerber
I'm a SpaceX owner too. You didn't, you didn't mention that.
- [51:22]
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- [51:23]
Carol Massar
Explain.
- [51:24]
Ed Ludlow
So remind. Yes, explain away.
- [51:27]
Ross Gerber
Well, explain away. I got involved with this Wonderful deal that was presented to me four years ago to invest in Twitter and boy, oh boy, did we do great with that, huh? So I had written down that stake in Twitter to about 25% of its original investment. And then somehow XAI came and bought Twitter and then somehow SpaceX bought Xai and, and now today, you know, I've now made like over three times my money investing in Twitter. So, you know, there is a thing called luck in the world and I'm, I'm lucky.
- [51:57]
Tim Stanweck
So you've tripled your money from four years ago in investing in the take private of what is now X and owned by Xai, which is part of SpaceX, of course. What do you do with those, with that part of ownership? Do you hold on to it or do you sell it when you can?
- [52:13]
Ross Gerber
Well, I'm building a new pool, but that has nothing to do with my SpaceX. I want to continue and employ lots of people because it's fun. But no, I'm holding my space.
- [52:23]
Tim Stanweck
No, an actual pool. An actual pool. I was thinking, yeah, I'm building an
- [52:26]
Ross Gerber
actual physical pool like in the AI era. I'm taking my AI profits and doing something really worthwhile, employing people to dig holes. But that said, you know, SpaceX is one of the most interesting companies I've ever seen. And we have such a unique viewpoint of SpaceX because we work with so many SpaceX clients and we're getting more all the time. And we've really been focusing on helping SpaceX employees because it's down the street from us here in Los Angeles is kind of their main, one of their main hubs. And so, you know, I've met some incredible people over the last several months doing incredible things. These are the highest caliber engineers in the world that have made our space program because it's really United States space program just so amazingly unique and successful. So what we have in store for us over the next decade is, is really exciting.
- [53:19]
Ed Ludlow
Hey, so Ross, just want to ask you, so you own this, the stock? You're happy about that? Will you continue owning it or do you think the valuation.
- [53:27]
Ross Gerber
That's what I'm saying. I'm not selling it. You know, I got my 10 year old kid sitting here because he's out of school and when I start thinking about what his life is going to be like when he's only 20, you know, like 10 years from now, like space is just going to be something that's like, I keep making this joke, it's like easier to go to space than New Jersey you know, and so, you know, the truth is, I think it's harder to go from New York to New Jersey than it will be in space, to go to space in 10 years.
- [53:51]
Carol Massar
And Ross, to be clear, this is you, Ross Gerber personally, as opposed to Gerber Kawasaki?
- [53:57]
Ross Gerber
That's correct. I, I personally own the shares in my firm. In our own firm account owns shares. Because when the Twitter deal came by, you know, Elon really didn't want to do the deal. So we didn't actually sell the deal to our clients because I was like, I can't sell this. The guy doesn't want to do it. You know, and so they basically called us the last night and was like, do you still want to invest? Because we're actually doing this. And so I just, like, wrote a check because it was Elon, you know, but we, but none of our clients have been able to participate in this. Well, fortunately and unfortunately, because, remember, pretty bad.
- [54:31]
Carol Massar
You didn't get an allocation or submit a bid for an allocation in the IPO or, or go into the open market today. I'm being mechanical, but I'm just.
- [54:40]
Ross Gerber
No, we haven't done open market purchases of SpaceX today because our firm does not buy IPOs for very good reasons, which I'm happy to talk about.
- [54:48]
Carol Massar
Well, and then second. Well, can I ask you.
- [54:50]
Ross Gerber
Well, and secondly, we did request IPO allocations for clients of ours that are at Fidelity and Schwab because we work with both of them and they did provide. So some of our clients did get small allocations of SpaceX stock today as well.
- [55:03]
Carol Massar
So the.
- [55:06]
Ross Gerber
But those were unsolicited. You know, the clients really wanted it.
- [55:09]
Carol Massar
Yeah, the reason that's insightful is like, there are people listening to Bloomberg Businessweek or watching Bloomberg that are in the same boat, Right. And they're just thinking like, you know, what did I do here? But the hypothesis presented to me by loads of people is they didn't sell their Tesla shares to get some liquidity to participate, in part because they just see the Tesla SpaceX merger happening imminently. And so what would be the point? May I ask where you stand on that idea today?
- [55:40]
Ross Gerber
Well, I very. I tweeted again this morning. I mean, I know you did. How long does this take till they put these companies together? And then even Gwynne Shotwell today didn't, you know, poo poo the idea when it was brought to her and actually said it makes sense. So, you know, we know this is going to happen at some point. And I think a lot of that has to do with what valuations SpaceX and Tesla really are to make this combination work for both sets of shareholders. So that doesn't create a lot of, you know, lawsuits and other, you know, issues. So, so I think it's, it's definitely a foregone conclusion. Now I do agree with you that that props up Tesla stock because, you
- [56:15]
Carol Massar
know, people are like, well, I didn't say that.
- [56:18]
Ross Gerber
Well, okay, my feeling is it props up Tesla stock because people don't want to sell their Tesla if it's just going to get bought out by SpaceX anyways, you know, and so I do think that that helps Tesla, that the perception is that they will be acquired by SpaceX or merge.
- [56:33]
Tim Stanweck
So. So Ross, maybe in your view it works for investors, but does it work from an actual operations perspective?
- [56:39]
Ross Gerber
Oh, 100%. Why in fact? Well, I would argue that this is really unfair to Tesla and it's one of the real gripes I've had over the last several years is the way they took, you know, Tesla's chips and Tesla's engineers and built xai, which was the brains of Tesla's, you know, optimus robot and full self driving. And then Elon goes on TV and says this is the entire value of the company is based off if we can, can succeed with full self driving. But yet the brains of full self driving isn't owned by Tesla. Like, that's super wrong. It just doesn't make any sense that I have a bunch of robots and cars that will not work without another company's technology. So Tesla in my mind is worthless if it doesn't merge because it doesn't own the IP to the brains to their own products. Like, like it just makes no sense.
- [57:33]
Ed Ludlow
All right, speaking of the brains, the brains behind anything with Elon's universe is obviously Elon Musk. And we talk a lot about risk to the company, we talk about governance, but we also just talk about, you know, how much what he does, his brain, his oddness, if you will, some might say, you know, is what makes this company eccentricity. You are much better on this and on the governance and stock structure. Nell Minow, Value Edge Advisors Vice Chairman, joined the closed team yesterday on Bloomberg Television. Let's all listen up to what Neil had to say. Neil had to say, all of those
- [58:12]
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protections that you talked about, the ability to vote proxies, the ability to sell the stock, the ability to sue, all of those are there to reassure investors. Having independent directors on the board, all of those are there to reassure investors that their Money is being taken care of in a principled way for their benefit, not for the benefit of the insiders. And all of those have been obliterated by this offering. You know, Elon Musk has appointed himself CEO for life. He's the only one who can remove himself. Not even his board of directors can remove him. He has all the voting control. He has basically built a moat with alligators around him himself, and that's not good for shareholders.
- [58:54]
Ed Ludlow
Nel Minow, Value Edge Advisors Vice Chairman on Bloomberg Television yesterday. Ross, my understanding that you were kind of laughing as you were listening to that.
- [59:03]
Ross Gerber
Well, you know, there's no companies that have ever been run like Tesla and SpaceX in the history of public companies. And so I find her outrage to be humorous because that's basically how it's worked for Tesla for the last 15 years. And, you know, the board is not independent. They do whatever Elon says. The pay packages are approved because index funds just push yes to whatever management puts forward. So Elon's taking advantage of a system where 20% of his companies owned by robots that don't make any decisions. There's nothing worse than Vanguard for shareholder rights. So if she wants to, to complain, she should be complaining about Vanguard, not Tesla. And the fact that Elon takes advantage of the fact that, you know, there's basically going to be nobody but, you know, somebody like me who goes out on tv. But as far as trying to vote change into Tesla or SpaceX, never going to happen. So does he take care of shareholders? Yeah, they've made a lot of money, so that's taking care of shareholders any way you do the math, whether I vote proxies or not, what matters is whether I'm making money. And I've made over 100 times my money investing in Tesla. And so I just think, you know, when you invest with Elon, you have no rights. You get on the bus, you don't like the bus, get off the bus, but if you want to be on that bus, he has rewarded people who has done that, and that's why people are giving him such a ridiculously high valuation, is because he has rewarded shareholders in the past and in a way that very few CEOs have. So, you know, I get the outrage and all that. Then don't buy the stock.
- [60:41]
Carol Massar
Ross. May I just.
- [60:42]
Ross Gerber
It was very clear in the S1, you know, exactly.
- [60:45]
Carol Massar
And like, I'm just relying on recounting what was in the S1, right? The, the restriction that's placed on Musk's comp I'm just going to read it out because, you know, it's the only way the audience will, will come to have a sense of it. He has a 1 billion restricted class B shares award that's contingent A on market cap milestones. So if he achieves the market cap milestones, the shareholders get rewarded, you say, But Musk's compensation package is tied to establishing a permanent human colony on Mars with at least 1 million inhabitants. I don't want to give a long winded question, but you explain to the audience how you came to be a SpaceX investor and shareholder. That goal. What does it mean to you?
- [61:30]
Ross Gerber
It means I might have a chance of not having to pay him the billion shares, you know, so, so I kind of like that, you know, I don't think we're going to have a million people living on Mars. So, you know, that's good news if you're SpaceX shareholder. And I could give you a lot of reasons that Elon might want to argue with me about and I'm a more practical person, but I don't think you could talk a million people into going to Mars, you know, like, unless Mars looks a lot like Hawaii, I don't think people want to go there. And Mars doesn't look like Hawaii. So I don't know, I don't know who's moving to Mars. We're speaking with Ross Gerber, by the way. It's, it's, it's far away and there's no air.
- [62:13]
Tim Stanweck
Ross Gerber, President and CEO of Gerber Kawasaki wealth and Investment Management. I did make that, that point earlier in our last hour about when people compared Mars to potentially being the next California. I pushed back a little bit there.
- [62:25]
Ross Gerber
Yeah, I'm not moving from here for anything. You said if they put social this year, I move it.
- [62:31]
Ed Ludlow
I still think he's going to put optimus robots on and 1 million maybe.
- [62:35]
Ross Gerber
That's what I think. That's what I think. I think the robots are the ones doing the work in space and going to Mars.
- [62:42]
Tim Stanweck
So, so Ross, I want to put aside the question of sort of governance right now and, and these, these pay packages and just get back to your view of, of Space X shares right now. You said Gerber Kawasaki does not buy on the first day of IPOs. What restrictions do you have or have you put out? It's sort of a rules based buying when it comes to IPOs. And when would you start getting your clients in even if they're not, you know, asking for it?
- [63:09]
Ross Gerber
No, they're asking for it. They're some of them.
- [63:12]
Tim Stanweck
We've talked to a lot of wealth managers lately who have said some people want it badly, some people want nothing to do with it. Like we've examples of that recently, this week on air.
- [63:23]
Ross Gerber
Yeah. You know, and that's, we have so many clients, we have all those examples, right? What I think, because the way my firm works, you know, we don't tell people no. You know, like if a client's like, I really want to do this, we don't say no. You know, it's our job to advise our clients. So we advise them of the risks of it and then we'll execute the transactions as unsolicited if they want to, if they really want to do that. And we've, you know, would do that. Now we. I haven't done that today for anybody because I've talked them out of it, you know, because they listen to my advice, which is IPOs are really difficult, okay? And I've been trading for 32 years and I did.com and I, I trade billions of dollars. So just from my experience, it's really, really hard to make binary decisions. Like I'm putting $100,000 of my retirement money into SpaceX today and that's it. And I will never look at it for 10 years because that's just not what investors do. So if you were able to do that, I would say, okay, you know, buy the IPO, pay, pay up for it, but in 10 years you'll be happy. But nobody actually does that. What happens is they look at their account in six months and it's down 30% and then they panic and they sell it right before it goes back up. And so investors psychology and behavior makes IPOs extremely difficult because of the volatility. So I don't know what the market's going to do over the next 12 months, let's say. And you know, and then you've got a very high priced IPO that has no PE ratio and then maybe markets go down for some reason. Well, SpaceX is going to go down more than the market. And if the market stays the same or goes up, there's the potential that SpaceX stays the same or also goes up. But what I say is how much upside can you get if you buy this stock today until this company actually produces earnings which might be three to five years from now. So you've got plenty of time to get into SpaceX. So if you really, really want it, what I tell people is buy 20% of what you want. To buy today. If it's $10,000 in SpaceX, you buy $2,000 today and then you wait a month and you buy another $2,000 and you wait another month and you get in over the next five months. But what I would really say is wait till the lockups expire, Wait. There's a lot of liquidity and a lot of people want to get this liquidity. They've worked at SpaceX for a very long time and they're not going to be quitting and they're not this and that, but they want to buy a house in L A And a house in L A cost 2 to 3 million just to get in. And these people are living in apartments. You see what I'm saying? So they're going to sell some of their stock to buy a house and they're going to sell some of their stock so that they have some financial security, which is what we're advising them. But many of the employees at SpaceX are not selling their stock. And I just want to make it very clear, many of them, these are the, the people who believe in their mission and they're working extremely hard. And after meeting many of these people, I believe in their mission. And Elon gets too much credit. I just want to say this. It's not Elon Musk that's made Space X successful. It's the people there. Elon Musk is a visionary and he guides the company, but the truth of the matter is he does not really run Space X. The people running Space X are excellent.
- [66:32]
Ed Ludlow
Ross, 30 seconds left. Though we do think about succession, so does Elon. Does it become even more important on this day where we continue to see the Elon universe get bigger and bigger, that there is a succession between plan in place? Is there one that you know of
- [66:47]
Ross Gerber
just quickly see, see at Space X? Yes. I think if elon died tomorrow, SpaceX would be fine. Actually, SpaceX has great management and they've been very independent for a long time. And many of the employees, and I'm not going to, you know, say where they were divisions, they were, they don't like Elon either, okay? They, they, you know, having a mission like going to Mars or going to the moon or building a starship is what motivates people. A lot of what elon does hurts SpaceX and hurts the company. So. So SpaceX has a much better management team than Tesla when it comes to secession. And I'm much more confident about its success even if, if Elon isn't involved.
- [67:29]
Ed Ludlow
Well, some great color and context on all things Space X and Elon as he always does. Ross, have a great weekend. Thank you so much. Ross Gerber, President CEO of Gerber, Kawasaki wealth and Investment Management, joining us from Los Angeles.
- [67:42]
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