SpaceX Said to File Confidentially for IPO Before AI Rivals

Summary

Bloomberg Intelligence Podcast: "SpaceX Said to File Confidentially for IPO Before AI Rivals"

Date: April 2, 2026
Hosts: Paul Sweeney & David Gura
Featured Guests: Anthony Hughes (Equity Capital Markets Reporter), Lily Meyer (Retail Reporter), Lindsay Dutch (Consumer Hardlines Senior Analyst)

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EPISODE OVERVIEW

This episode focuses on SpaceX’s confidential filing for an IPO—a highly anticipated and potentially transformative market event. The hosts and their expert guests delve into what the confidential filing means, how it positions SpaceX relative to AI industry rivals, and the implications for Elon Musk's corporate structure ambitions. In addition, the episode covers key developments at Nike and RH (Restoration Hardware), each discussed from an investor perspective.

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MAIN SEGMENT: SPACEX’S CONFIDENTIAL IPO FILING

The News: SpaceX Files for Confidential IPO (02:26)

• SpaceX has filed confidentially for an IPO, marking its most definitive step yet toward going public.
• Anthony Hughes explains the significance:

  “This is really the most definitive step you could argue for SpaceX in terms of going public, because it means that they've gone, they're serious…they've filed a hefty document with the SEC.” (02:52)

What Does a Confidential IPO Filing Mean? (02:26–03:55)

• Confidential filing allows companies to submit IPO documents to the SEC without immediately revealing details to the public.
• Most expect the IPO to happen by June 2026, but, Hughes cautions, "a lot of different things can happen" and such large deals always come with uncertainty.
• The move is "somewhat unprecedented" given SpaceX’s scale and business model.

Dual-Class Share Structure Considerations (03:55–05:05)

• Insiders (like Elon Musk) may receive super-voting shares, retaining decision-making control post-IPO.
• Hughes notes:

  “It's not uncommon. It’s not something that corporate governance purists love because it means…investors may not get to have a huge say in any changes…” (04:16)

• Comparison to founders at other tech firms (e.g., Meta); Tesla does not have dual classes, possibly reflecting Musk learning from past experiences.

Impact and Logic of Acquiring xAI (Musk's AI Startup) (05:05–06:52)

• SpaceX acquired xAI to incorporate AI capabilities, despite xAI’s high cash burn:

  “I think people have different theories on that…from all reports, it's been burning cash, so it’s not adding to the profitability…but, you know, there is an arms race for growing the AI aspects.” (05:41)

• The acquisition may affect short-term financials but potentially boosts long-term growth and market competitiveness.

Musk’s "Empire" and Merger Speculation (06:53–07:58)

• Speculation about rolling up Musk’s companies (e.g., SpaceX buying Tesla) into a single entity.
• Hughes tempers speculation, saying current focus is on the SpaceX IPO and maximizing valuation and capital access:

  “Most companies looking to go public are always trying to maximize valuation…” (07:09)

Underwriting and Investor Overlap (07:58–08:33)

• Major banks involved: Bank of America, Citigroup, Goldman Sachs, JPMorgan, and Morgan Stanley (the "big five").
• Expectation of substantial overlap between SpaceX and Tesla investor bases; future corporate consolidation possible if Musk holds super-voting shares.

Timing and Mechanics of Disclosure (08:36–09:58)

• Timeline: Public visibility into SpaceX’s financials will emerge closer to IPO launch, likely in late June.
• Why file confidentially? Allows company to adjust strategy and "test the waters" with investors before full public scrutiny:

  “Confidentiality…was really for small companies…over time it was extended to every company…it allows SpaceX to say lots of things to investors they wouldn’t otherwise be able to say.” (09:01)

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NOTABLE QUOTES & MEMORABLE MOMENTS

• “It’s a monster deal and it’s somewhat unprecedented in many aspects of this deal.”
  — Anthony Hughes (02:52)

• “Founders of tech companies that are large and fast growing do have the ability to dictate such terms…it’s not uncommon.”
  — Anthony Hughes (04:16)

• “There is an arms race for growing the AI aspects…that obviously adds a growth element…probably makes the financials not look as good in the short term.”
  — Anthony Hughes (05:41)

• “Elon Musk has demonstrated he has unlimited access to capital and this business is going to have good access to capital…that’s the benefit of size and scale.”
  — Anthony Hughes (07:09)

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SECONDARY SEGMENTS

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Nike: Investor Concerns Over Outlook and Turnaround

[13:33–18:07]
Guest: Lily Meyer (Retail Reporter)

Main Points

• Nike shares fell 14% due to a weaker-than-expected revenue outlook.
• Challenges: Ongoing issues with Converse, struggles in EMEA (Europe, Middle East & Africa), and slower recovery in Greater China.
• Inventories and Innovation:
  • Elevated inventory in EMEA, traffic disruptions due to war.
  • Ongoing innovation concerns, reliance on legacy lifestyle products, and management shakeups.
• Converse sales hit a 15-year low; Authentic Brands expressed acquisition interest.
• Turnaround leadership pressure:
  • Under CEO Elliot Hill, shares are down 35% since he started.
  • Hill reportedly expressed personal frustration at ongoing turnaround efforts.

    "He was so tired, you know, of talking about fixing the business." (17:41)

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RH (Restoration Hardware): Stock Plunge on Weak Outlook

[21:43–25:50]
Guest: Lindsay Dutch (Consumer Hardlines Senior Analyst)

Main Points

• RH lost a quarter of its value after disappointing earnings and weak outlook.
• Reasons for concern:
  • Missed top- and bottom-line estimates.
  • 1Q26 sales expected to decline; recovery hinges on new collection launch later in the year.
• Industry vs. company factors:
  • RH "plays to a very niche customer" and faces margin erosion due to high investment costs and tariffs (about 190bps margin hit Q4).
• E-commerce remains a small part:
  • RH and peers are opening new stores to provide experiential shopping.
  • Trend matches Williams-Sonoma’s store expansion.

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TIMESTAMPS: ESSENTIAL SEGMENTS

• 02:26: Launch of SpaceX IPO discussion
• 03:55: Dual-class share structure explained
• 05:09: SpaceX acquisition of xAI and AI IPO context
• 06:53: Speculation about consolidating Musk's companies
• 07:58: Underwriter banks and investor base overlap
• 08:41: When to expect public filings
• 13:33: Nike results and outlook with Lily Meyer
• 21:43: RH earnings disappointment with Lindsay Dutch

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SUMMARY

This episode delivers a thorough breakdown of SpaceX’s confidential IPO filing and what it could mean for the broader tech and AI market landscape. The discussion explores the mechanics of confidential filings, dual-share structures, and the increasingly intertwined fates of Elon Musk’s companies. Secondary segments provide sharp analysis of Nike’s turnaround troubles and the woes of high-end retailer RH, giving listeners a well-rounded outlook on today’s investment landscape.

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For additional context, listen to the episode in its entirety or catch Bloomberg Intelligence live weekdays on YouTube and your favorite podcast platforms.

Transcript

[David Gura]

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[Bloomberg Intelligence Announcer]

Bloomberg Audio Studios Podcasts Radio news. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10am Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts or watch us live on YouTub.

[Paul Sweeney]

SpaceX, the startup founded by Elon Musk, the billionaire, has filed confidentially for an ipo. This is according to people familiar with the matter. Anthony Hughes is one of our reporters here at Bloomberg. He covers U.S. equity capital markets and he joins us now. So when a company files confidentially for an ipo, what exactly does that mean and where does that leave us in terms of when this company, SpaceX, will go public and actually listen?

[Anthony Hughes]

Yes, well, really, there's a Lot of steps along the way to going public. And for a company like SpaceX, which has been around for quite a long time, it's been a long road. But this is really the most definitive step you could argue for SpaceX in terms of going public, because it means that they've gone, they're serious in the sense that they've filed a hefty document with the sec. We don't get to see it yet. Hopefully we might hear about some of the things that are in it. But this really suggests that the deal is going full steam ahead. And I think all the body language we've seen in recent, even in just the last two or three days, we've seen a number of stories about different things that are happening around the deal and it's really sort of indicated that it's full steam ahead. And everyone's pretty confident they can get this done actually by June. Now, June is a few months away. So a lot of things, different things can happen. We're in a world where different things can change. So, you know, it's worth being a little bit wary about how easy it's going to be to achieve this. But it's, you know, it's a monster deal and it's in some, it's, it's somewhat unprecedented in many aspects of this deal. So you have to take that into account.

[David Gura]

And the company is considering a dual class share structure in the IPO that would potentially give insiders such as Elon Musk extra voting power to dominate decision making. Bloomberg News has reported. Is that something that they're going to go to the regulators and get some feedback on? Because we've seen other media companies, tech companies, have this dual class stock.

[Anthony Hughes]

Yeah. So that would be very prominent in the document, will be mentioned on the COVID of the document. Likely that would be something that would be not unexpected in this situation. Especially when you have an ipo, which is going to be very hotly sought by investors. You tend to find that founders of tech companies that are large and fast growing do have the ability to dictate such terms. And that's been my experience, it's not uncommon. It's not something that corporate governance purists love because it means that if things go wrong, investors may not get to have a huge say in any changes that they would like to see. But it's not, not surprising that that's something that would happen. And for Elon, it might, For Elon Musk, it might allow him to consolidate his empire somewhat.

[David Gura]

I'm just looking at Tesla Des Spring for Tesla does not have a dual

[Paul Sweeney]

class, so maybe he learned from the first time. And it's not unusual for founders to launch an IPO like this. Metta has this dual class structure as well. And it's fittingly that we're getting this confidential IPO on the day that NASA is set to launch astronauts to the moon for the first time in 50 years. Anthony, one thing that we do know about Space X is that it acquired xi, which is Elon Musk's AI startup, you know, earlier this year. What does that have to do with this ipo? Why was that kind of a necessary step towards this ipo?

[Anthony Hughes]

Well, I think people have different theories on that. I think it probably makes sense for the funding needs of that business to bring it into SpaceX. I think some people felt that that wasn't great for it's made the business not as attractive as a whole. But at the end of the day, I think people are backing Elon Musk because of his track record. I mean, it's interesting you mentioned Tesla. I mean, it's just extraordinary that if we go back to 2010, when Tesla went public, it was, I think it was a few hundred million dollars IPO of a company worth a couple of billion dollars. I mean, we're talking about such larger numbers now. But you know, I think XAI is, you know, we're going to see some, some numbers there. I mean, from, from all reports, it's been burning cash, so it's not, not adding to the profitability of the overall business. So that, that is a concern. But I think, because, you know, we're also expected to see possibly anthropic and OpenAI go public this year. I mean, there is an arms race for growing the AI aspects, you know, growing these businesses. And you know, I think SpaceX is going to be part of that. And you know, that's obviously adds a growth element to the business as well, but it does probably make the financials not look as good in the short term.

[Paul Sweeney]

But getting there first.

[David Gura]

Yeah, exactly right. There's been reporting that Elon may be considering kind of rolling up all his stuff. You know, SpaceX may be acquiring Tesla, for example. X. Yeah, he's already done that. I mean, what do we know about that? Is he is Elon said anything about that?

[Anthony Hughes]

Well, I think there's a lot of speculation about that, but I think what we're seeing here is that SpaceX is going to go public before that happens. Most likely. I think there could be a change of plans. You never know. But there does seem to be, there could be some industrial logic in Elon Musk having all of his businesses in one listed entity. But you know, it may be for different reasons because of the way these businesses are developing and the value. Obviously most companies looking to go public are always trying to maximize valuation and make sure they can have access to capital. I mean, the thing about these businesses being so large is they have almost. I mean, for all the ups and downs of Tesla over the years, Elon Musk has demonstrated he has unlimited access to capital and this business is going to have good access to capital, which is going to allow them, to, allow them to do many things. Yeah, that's the benefit of size and scale.

[Paul Sweeney]

I know that you always look at the banks that get signed on to do this. SpaceX has lined up bank of America, Citigroup, Goldman Sachs, JP Morgan and Morgan Stanley, basically the five biggest bracket firms, the big five.

[David Gura]

So though, and they're going to have dozens and dozens of banks around the world helping them sell this thing. All I know is I'm, if I'm buying space, I'm thinking that the shareholder base is going to be a big overlap. The people who kind of are in the Elon camp, they're already on Tesla. My sense is they're going to be a very high crossover there between Tesla and SpaceX. So at some point down the road, particularly he has voting, super voting shares, he might be able to put the companies together. Yeah, I think it's a real.

[Anthony Hughes]

Yeah, I think it's a reasonable theory.

[David Gura]

What's next here? So when do we actually get to see some of the numbers, do you think?

[Anthony Hughes]

Well, so typically what happens is the filing will become public. Typically, you know, there'll be strategic decision about when that is. But if, you know, if it's the case that the IPO is on track to actually, the stocks actually on track to debut perhaps in late June, which is, you know, get in before the, before the, before the summer.

[Paul Sweeney]

Why file confidentially then? Why not just make it public?

[Anthony Hughes]

Well, because confidentiality was originally as it, when it was first that SEC created the ability for companies to file confidentially. It was really for small companies to help small companies go public, but over time it was extended to every company. So it was just something that was available to all companies. So it's something you would use. But yeah, in this case, doesn't matter that much in this situation because basically what will happen is SpaceX will now be able to go out and start meeting investors and they'll be able to use information in that filing when they're talking to investors, still in a confidential way that's not really public. But the filing of the document will allow us SpaceX to say lots of things to investors that they wouldn't otherwise be able to say. That's our understanding of the legal position there. And so it's really they'll be doing a lot of testing the waters meetings at the, you know, the meetings are supposedly starting next week and so it's really full steam ahead here.

[Paul Sweeney]

Stay with us. More from Bloomberg Intelligence coming up after this.

[David Gura]

Support for the show comes from Public. Public is an investing platform that offers access to stocks, options, bonds and crypto, and they've also integrated AI with tools that can assist investors in building customized portfolios. One of these tools is called Generated Assets. It allows you to turn your ideas into investable indexes. So let's say you're interested in something specific like biotech companies with high R and D spend small cap stocks with improving operating margins, or the S&P 500 minus high debt companies. Chances are there isn't an ETF that fits your exact criteria. But on public you just type in a prompt and their AI screens thousands of stocks and builds a one of a kind index. You can even backtest it against the S&P 500. Then you can invest in a few clicks, go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market ad paid for by Public Holdings Brokerage Services by Public Investing member FINRA SIPC Advisory Services by Public Advisors SEC Registered Advisor crypto services by ZeroHash sample prompts are for illustrative purposes only, not investment advice. All investing involves risk of loss. See complete [e-mail] disclosures small businesses are

[Paul Sweeney]

the pulse of every community. They bring people together, create opportunities and drive growth. With a widespread presence in communities across the country, Chase for Business supports small business owners at a local level that makes it possible for you to connect, learn from each other and grow together. There's a real commitment to seeing small businesses succeed. The Chase for Business team has knowledge and expertise that span a wide range of financial areas. They can help you make more informed decisions as you navigate the complexities of running your business. They'll help your business grow with individual guidance and convenient digital tools all in one place. With that guidance and your determination, you can take your business farther and help build a brighter future for your community. Learn [e-mail] business chase for business make more of what's yours. The Chase Mobile app is available for select mobile devices. Message and data rates may apply. JPMorgan Chase Bank NA Member FDIC Member Bank Copyright 2026 JPMorgan Chase Co.

[My Policy Advocate Narrator]

Here's a paradox. We buy insurance for peace of mind. Yet the very policies we trust can deliver the biggest financial shocks across America. Millions of claims are denied every year, not because people did anything wrong, but because policies quietly excluded the things that happened. The psychology of trust tells us we assume the contract is fair. But in insurance, the information gap is massive. The insurer knows every detail of what's covered. The policyholder rarely does. That's where my policy advocate comes in. For just 27 cents a day, their platform reads your policies and shows you in plain language where you're vulnerable. They're not selling insurance. They don't do that. It's about transparency, giving ordinary people the same understanding insurance companies have had for decades. Because when you know what's really in your policy, you can plan, protect and avoid surprises. Before you trust your policy to protect you, let my policy advocate tell you what it really says. Visit mypolicyadvocate.com to today, peace of mind starts with knowing the truth. My policy advocate.com

[Bloomberg Intelligence Announcer]

youm're listening to the Bloomberg Intelligence podcast. Catch us live weekdays at 10am Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app Listen on demand wherever you get your podcasts or watch us live on YouTube.

[Paul Sweeney]

Shares of Nike down almost 14% after its latest earnings report. That last quarter was fine. It's the outlook that has people a little bit concerned. Lilly Meyer is our retail reporter. She joins us actually. Is she here?

[David Gura]

I don't know.

[Paul Sweeney]

She is. Okay. I'm sorry. I thought she was going to be in studio, but I was wrong. Okay. Lily, great to speak with you. What is it specifically that Nike said that got people concerned? Because we'd been conditioned to to really understand that Nike is in turnaround mode. So it's not going to be a straight line up.

[Lily Meyer]

Yeah, exactly. And I think they're still, still fair to say they're in turnaround. What really spooked investors was they shared that the outlook for revenue for the year is just much low than the street expected. They're still having challenges with Converse. They're now seeing some challenges in emea and that's offset some of the gains in North America and in the running category.

[David Gura]

Lily, talk to us about the inventories because I know that was a big issue for this company. Hey, let us just kind of get through Weaning down our inventory and then we'll be in good shape. I thought they were making progress there and I think I probably, I'm probably representing the market here because the market, I guess, was surprised here. Talk to us about inventory.

[Anthony Hughes]

Yeah.

[Lily Meyer]

So one place that inventories came up this quarter that was interesting is they said that they're seeing some elevated inventories in emea, in Europe, in the Middle east, and they're also seeing some traffic disruption there from the war.

[Paul Sweeney]

What is it specifically with China? That's been an issue because inventories has been a problem there. But it goes beyond that. I mean, it goes to weakness in consumer spending and rising competition. But Nike has been really struggling to get its China business, its greater China business back to what it was.

[Lily Meyer]

Yeah, exactly. So I would say it's, you know, a lot of increased competition there. And this quarter they did show some improvement in greater China. I think, you know, things turned around a little bit more than was expected, but still not enough to excite investors.

[Paul Sweeney]

And one area that's really been weak for Nike is Converse. I don't know about you, but I love Converse sneakers, but. Yep, exactly. And Converse sales fell more than expected. I. You have something like a 15 year low in your stories. What is going on there? Because it has attracted some interest.

[Lily Meyer]

Yeah. So Converse has been one of the most stubborn parts of the business to turn around under Elliot Hill. So I think, you know, Nike has really relied on Converse for the Chuck Taylor, but has struggled to diversify outside of that. So they're trying to make a basketball push, but, you know, we're not seeing a lot of progress in that area. And you know, we reported yesterday that they, you know, authentic brands has expressed some interest in Converse. So we'll see what happens there. Nike has said, you know, they're still invested in Converse, but it hasn't, it hasn't turned around yet.

[David Gura]

You know, it's lily just for Nike overall, when I think of them, I think of them as just one of the great consumer product brands with just the, you know, the coolest, cutting edge, leading edge kind of products. It feels like maybe they've, they've lost that. I mean, how concerned are people that they just kind of lost the feel for the market?

[Lily Meyer]

Yeah, I mean, I think innovation was definitely a concern prior to Elliott joining. So under John Donahue, one of the biggest concerns was there was a lack of innovation. Nike was relying too much on some of their lifestyle products. So on the dunks, the Air Jordan ones, the Air Force ones, Elliot has really refocused the business around sport and he's been trying to innovate in that category. Nike had some new product come out around the Olympics. So I think that's an area to watch closely, you know, seeing how much innovation they're able to pump out.

[Paul Sweeney]

And speaking of Elliot Hill, he's been on the job for now 1 1/2 years. Is does he own everything that's happened or does he still get a little bit of a pass? I mean, I imagine that it's frustrating for investors. It's frustrating for him as well to kind of see this stop and start progress.

[Lily Meyer]

Yeah. So I think that in one of our stories today, we said that shares are down more than 35% since he started, despite him executing a new strategy. He, you know, on a call with employees, you know, said he was so tired, you know, of talking about fixing the business. I think he's definitely starting it seems like he's starting to feel some of the frustration there, the business not turning around.

[David Gura]

Stay with us. More from Bloomberg Intelligence coming up after this. Support for the show comes from Public. Public is an investing platform that offers access to stocks, options, bonds and crypto. And they've also integrated AI with tools that can assist investors in building customized portfolios. One of these tools is called Generated Assets. It allows you to turn your ideas into investable indexes. So let's say you're interested in something specific like biotech companies with high R and D spend, small cap stocks with improving operating margins or the S&P 500 minus high debt companies. Chances are there isn't an ETF that fits your exact criteria. But on Public, you just type in a prompt and their AI screens thousands of stocks and builds a one of a kind index. You can even backtest it against the S&P 500. Then you can invest in a few clicks, go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market ad paid for by Public Holdings Brokerage Services by public investing member FINRA SIPC advisory services by public advisors SEC registered advisor crypto services by ZeroHash sample prompts are for illustrative purposes only, not investment advice. All investing involves risk of loss. See complete [e-mail] disclosures.

[Paul Sweeney]

Small businesses are the pulse of every community. They bring people together, create opportunities and drive growth. With a widespread presence in communities across the country, Chase for Business supports small business owners at a local level that makes it possible for you to connect, learn from each other and grow together, there's a real commitment to seeing small businesses succeed. The Chase for Business team has knowledge and expertise that span a wide range of financial areas. They can help you make more informed decisions as you navigate the complexities of running your business. They'll help your business grow with individual guidance and convenient digital tools all in one place. With that guidance and your determination, you can take your business farther and help build a brighter future for your community. Learn [e-mail] business chase for business Make More of what's Yours the Chase Mobile app is available for select mobile devices. Message and data rates may apply JPMorgan Chase Bank NA member FDIC member copyright 2026 JPMorgan Chase Co.

[My Policy Advocate Narrator]

Here's a paradox we buy insurance for peace of mind. Yet the very policies we trust can deliver the biggest financial shocks across America. Millions of claims are denied every year, not because people did anything wrong, but because policies quietly excluded the things that happened. The psychology of trust tells us we assume the contract is fair. But in insurance, the information gap is massive. The insurer knows every detail of what's covered. The policyholder rarely does. That's where my policy advocate comes in. For just 27 cents a day, their platform reads your policies and shows you in plain language where you're vulnerable. They're not selling insurance. They don't do that. It's about transparency, giving ordinary people the same understanding insurance companies have had for decades. Because when you know what's really in your policy, you can plan, protect and avoid surprises. Before you trust your policy to protect you, let my policy advocate tell you what it really says. Visit mypolicyadvocate.com today. Peace of mind starts with knowing the truth. My policy advocate.com

[Bloomberg Intelligence Announcer]

youm're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10am Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts or watch us live on YouTube.

[Paul Sweeney]

All right, let's switch gears and look at some other companies that are on the move. And I'm paying attention to RH Restoration Hardware. The stock is pushing, plunging. It's down a quarter today, a quarter of its market value lost just this morning. Lindsay Dutch is our Consumer Hardlines Senior Analyst at Bloomberg Intelligence and she joins us now. So this is very much a play on the consumer and a higher end consumer as well. Lindsey what what do we know about RH and the outlook it's given?

[Lindsay Dutch]

Hi Paul. Hi Scarlet. Thanks for having me. Yeah, so RH missed both on the top and the bottom line when we looked at fourth quarter earnings, but I think worse is when we this year the outlook was well below expectations, including expecting a sales decline in the first quarter. That kind of tells me between the miss and the bad look for first quarter, that demand has really dropped and they're really going to count on a big spike in the back half of the year with a new collection coming to sort of drive that growth heading into 27. But the first half of the year certainly looks challenged.

[David Gura]

Lindsay, how much of this, you know, when we talk to you about your companies, one of the questions I always have is how much of this is industry wide versus company specific year?

[Lindsay Dutch]

Yeah. So for our age, I do think that it is a company specific story. When we look back at last year, they did grow sales 8%. That's pretty impressive in the environment that they were playing in. That is above the peer average. But they do play to a very niche customer and they are are striving to be a luxury brand and their moves to make waves in that space, you know, do cost a lot of money. They're investing very heavily. They're opening galleries all over the globe. And I think that there was just a lot of disappointment in this coming year that that growth might slow again and and their long term targets are well out of reach.

[Paul Sweeney]

And I'm just looking at Wayfair, those stocks are more modestly lower. Ethan Allen Interior is modestly higher. So I'm not sure there's much of a read through to some of the other furniture companies that are out there. But Lindsey, how much are tariffs a part of this story for rh?

[Lindsay Dutch]

Yes, the tariffs have played a piece here. They cost about 190 basis points in margin in the fourth quarter. Their guidance is kind of including a similar hit for this coming year. The bigger thing for this year, as I mentioned, is, you know, tremendous investment going into the business. They're expecting erosion in their margin again this year. You know, investors aren't liking that. They've kind of missed their profit goals for the past year or so and we're looking at another year of heavy investment pressure on the margin. Even if we see some of that tariff costs come down a bit, but it's definitely a factor. They've also talked about, you know, significantly moving their sourcing around, which is part of the slowdown in that first quarter, you know, reworking that and they might have a little bit of a less product to sell until we get later into the year.

[David Gura]

Lindsey, what are they doing with E Commerce? I would think if I'm going to buy a sofa, I want to go into the store and see it, sit on it, that kind of stuff. Talk to us about their e commerce strategy. How's that play?

[Lindsay Dutch]

Yes, E commerce is a very small piece of their business and the openings that they're looking at doing in Paris and Milan, they are really leaning into that experiential vibe and wanting people to come see their product in person, feel it and really understand the quality. So they are leaning into expansion. We actually see their peers. Williams Sonoma is also expanding stores for the first time in almost 10 years. So we're seeing some of these bigger furniture companies. You know, even though they are focused on growing that online presence, they really much want their customer to come into the store and see the product and they're willing to invest to do that.

[Bloomberg Intelligence Announcer]

This is the Bloomberg Intelligence Podcast available on Apple, Spotify and anywhere else you get. Your podcasts listen live each weekday 10am to noon eastern on bloomberg.com the iHeartRadio app, TuneIn and the Bloomberg Business app. You can also watch us live Every weekday on YouTube and always on the Bloomberg Terminal.

[Paul Sweeney]

If you follow markets, you know the value of long term thinking. You plan, you diversify, you prepare for volatility. But even the best strategies can't prevent every bad day. For more than 75 years, Cincinnati Insurance has helped individuals and businesses navigate tough moments. With expertise, personal attention and independent agents who focus on relationships, not transactions, the Cincinnati insurance companies let them make your bad day better. Find an agent@cin fin.com okay tech leaders,

[David Gura]

word on the street is security incidents are dropping way down. With Windows 11 PCs built in, security for the Win upgrade to Windows 11 Pro at windows means business.com

[Anthony Hughes]

the news

[David Gura]

doesn't stop on the weekends.

[Lindsay Dutch]

Context changes constantly and now Bloomberg is the place to stay on top of it all.

[David Gura]

Hi, I'm David Gura. Join us every Saturday and Sunday for the new Bloomberg this weekend.

[Lindsay Dutch]

I'm Christina Raffini.

[Paul Sweeney]

We'll bring you the latest headlines in depth analysis and big interviews, all the

[Lindsay Dutch]

stories that hit home on your days off.

[David Gura]

And I'm Lisa Mateo. Watch and listen to Bloomberg this weekend for thoughtful, enlightening conversations about business, lifestyle, people and culture. On Saturday mornings, we put the past week's events into context, examining what happened in in the markets and the world.

[Paul Sweeney]

Then on Sundays, we speak with journalists,

[Lindsay Dutch]

columnists and key political figures to prepare you for the week ahead.

[David Gura]

Join us as soon as you wake up and bring us with you wherever your weekend plans take you. Watch us on Bloomberg Television listen on Bloomberg Radio, stream the show live on the Bloomberg Business app, or listen to the podcast that's Bloomberg this weekend, Saturdays

[Lindsay Dutch]

and Sundays starting at 7am Eastern.

[David Gura]

Make us part of your weekend routine on Bloomberg Television Radio and wherever you get your podcasts.