Why do some companies wait to IPO?

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natural resources industries. From deals and disputes to compliance and counseling, clients turn to Stole Reeves for their most complex business challenges. Learn more at STOEL.com To infinity and beyond! From American Public Media, this is Marketplace. In Los Angeles, I'm Kyle Riznall. It is Thursday. Today, this one is the 21st of

May. It is always to have you along, everybody. I am just going to read from the SpaceX S1 that

came out last night. That's the first form that companies have to file with the securities and exchange commission to start the process of going public. Our mission, it says, is to build the systems and technologies necessary to make life multi-planetary to understand the true nature of the universe

“and to extend the light of consciousness to the stars. So Elon Musk and the gang are taking”

a big swing indeed. This is the first look under the financial hood of the rocket company, which also owns the social media platform X, as well as XAI. It's coming before it's expected

IPO next month, which could wind up with a 1.75 trillion with a $T dollar valuation. This is the first

and a string of mega IPOs that are lined up. Open AI as soon as this fall, perhaps, and thropic after that. Point is, this hasn't happened before. Companies hitting the public markets for the first time with such enormous valuations. Marketplace is making McCarty Carino, starts a soft. When the web browser netscape went public in 1995, it was barely a year old. At 11am this morning, the company stock went public and Wall Street went bonkers.

That kicked off the dot com boom, says J. Ritter, an economist at the University of Florida. There were lots of startups that went public. I could very early stage where it wasn't at all clear who their survivors were going to be. That created a risk for retail investors, but also opportunity to get in on the ground floor of tech companies that would build unimaginable fortunes like Google and Amazon. In the last few decades, they've been delaying going public.

SpaceX is 24 years old. Open AI is 10. Anthropic is only 5, but all have mature businesses generating billions in revenue. It means gains have accrued to a smaller group of private investors

“and venture capital firms, and that important details about these company's business models”

have been less transparent. It says Minmo Gang, a professor of finance at Cornell. Once you go public, companies can no longer cherry-pick what pieces of information they want to disclose. While these companies have booming revenue, Gang says they're not likely to be profitable in the near future because they're spending so much on hardware. But there's a lot of pent-up demand to invest in the technology. People are increasingly using every day,

says Analyst Daniel Newman at Futureham Group. These are companies that could legitimately take almost all of the markets liquidity for a short period of time because there's going to be so many funds institutions and retail investors that are all going to participate. All be part of this. A lot of individual investors have already been trying to scoop up shares ahead of the IPO

on the secondary market, not always through official means. When investment banker offered his

Bay Area home for sale in exchange for anthropic shares. I'm making McCarty Carino from Marketplace. Wow, that is a big swing indeed. Wall Street today stalks up oil down. Stop me if you've heard that one before. We will have the details when we do the numbers. The average price of a new car in this economy at the moment sits right around $50,000. So the news from Stellantis this morning was interesting market share-wise. The global carmaker with more

than a dozen brands, Fiat Pujo, Jeep Dodge and Chrysler among them says it's going to introduce nine new models that'll sell for less than $40,000. Daniel Aquaman has more now on

strong incentive to buy new cars. A used car was a lemon, a junker was about to explode.

“So automakers offered new cars at every price point. But Mercer says car quality has improved”

so much that customers who want something affordable can now safely buy used higher end models. So the entry-level competition is no longer Carola versus Versa. It's Carola versus a used canry. Well, I would now buy the bigger car in pretty much a equivalent shape for the same amount of money. And so some automakers have abandoned their most affordable models altogether. Says David Wiston, an auto analyst with Morningstar. There's a lot more profit in selling

a high-linder than there is a Carola. And there's been more demand for that high-linder too, says Aaron Keating of Cox Automotive. We do continue to see a consumer that is looking for the larger, more technologically advanced vehicles. But major price increases on those big new SUVs are starting to push some consumers to the brink. Says Tyson Jammany of JD Power.

“Plus, automakers are eyeing the possibility of lower cost competitors hitting the market.”

They're thinking, you know, what happens if Chinese automakers enter the U.S.? What happens if a lot of the competitors build plants in the U.S. and can start avoiding tariffs or, you know, future tariffs or whatever it is? Jammany says Delantis may want to equate American consumers with its affordable models before any of that happens. I'm Daniel Acrement for Marketplace. We're going to talk about trade quite a bit in the second half of the program.

Big picture trade war, kind of stuff. But the reality is all that big picture

stuff is made up of a whole lot of more granular stuff, which for us right now is element number 74 on the periodic table tungsten. It's a metal that's critical to all kinds of industries, especially manufacturers that need to cut other kinds of metal. Most of the tungsten used here comes from China, which controls a give or take 80 percent of the world's supply. And the trade discontent between the two countries has sent tungsten prices up 300 percent over the past year,

or so that's according to the CRU group. As Marketplace Justin Ho reports, though, that tungsten inflation has less to do with tariffs than it does with another weapon in the global trade war, export controls. A big reason why tungsten is unique is that it has a very high resistance to heat. So that makes it ideal for handling the temperatures required to melt other metals without it melting itself. That's Chris Blanche, CEO of Maverick's Manufacturing Partners, a company

near San Diego that makes components for the energy and defense sectors. Blanche says tungsten's commonly used as the electrode when welding parts for those sectors. All of our aircrafts, missile systems nuclear, right, so that the nuclear power plants for submarines and aircraft carriers, they'll use a lot of this particular kind of a process using tungsten. About once a month, Maverick's Manufacturing Partners will order a 10 pack of tungsten electrodes, which are the

thin rods that go into welding tools. But last fall, the company noticed that prices were starting to rise, so Joe Thompson, the company's chief operating officer, loaded up on a year supply. Because at that time, it wasn't really a huge cost, right? But we can stock it. Thompson says that ended up being the right call. Prices of those 10 packs have more than triple than the time since. In part, because there's a lot of demand from the defense sector.

tungsten's used to make torpedoes and armor piercing ammunition. Nicholas and Asi, with CRU groups, says that's partly because of the Iran war. And because Europe's spending more on defense. If we look at the particular example of Germany, we see that Germany is reconvert in part of the manufacturing operations into military projects. But the reason why prices of skyrocketed this year also has to do with supply,

since China controls so much of the market. China has implemented expert restrictions, meaning that only those who get a license, can actually sell tungsten overseas.

China's trying to hang on to its tungsten, along with other critical metals, to safeguard

its own interests, is liafahi, senior China economists with capital economics.

“But equally, the other key thing is that it's being used as a bargaining tool in a way of”

kind of causing pain to the U.S. and the U.S. is allies. That's partly because of the Trump and Biden administration's tariff policies. But it's also because the U.S. has been using its own export controls on China. One of the key things that the U.S. has been doing to restrict

to make this semiconductors. There are efforts in the U.S. and elsewhere to find more sources of tungsten. But Damian Ma with a think tank Carnegie China says that mines are a risky proposition that would require more than the private sector. This is why China has succeeded is that they've applied

basically economy-wide industrial policy to get these strategic metals, because the markets

were not really going to be investing in these areas. The U.S. has awarded money to companies to study the possibility of domestic tungsten mining, but any new source would be at least a year

“as a way and until then, companies are beholden to whatever China decides to do. I think the world's”

waking up to the fact that if anyone, country, controls the commodity, it's a high risk with the whole world. That's Brendan Moore, co-inner of Wolftooth Components, a company near Minneapolis that makes bike parts. He uses tungsten tools to whittle down blocks of aluminum into pedals, skiers,

and other components. Moore says the company spends a few thousand dollars a month on these tools,

and over the past year, prices have nearly doubled. A few thousand dollars isn't life-changing for a machine shop, the size of ours, but it's significant, significant enough that you see it in the numbers. Moore says the company can resharpen the tools, so they last longer. But beyond that, there's not

“much else we can do. But just another one of those things where aluminum prices going up or anything else”

electricity going up, we largely just have to eat it in the short term. Moore says he really doesn't want to pass the cost on to his customers, but if tungsten stays expensive, he might have to.

I'm Justin Howe, from Marketplace.

Well, let's see. We've talked about spaceships with SpaceX. Cars too, with Stalantis. Now how about boats? Fishing boats in particular in the say 20 to 30 foot range. Here's today's installment of our series, My Economy. My name is Matt Ashkryther. I'm the owner and operator of a small scale fishing company on Oahu Hawaii. I'm still somewhat in the transition to it. I started about five, six years ago going out for fun on the weekends.

I was in the army for about eight years, and then I got out of that in 2019. And I was teaching middle school. Last year I moved more toward full-time fishing. Originally the goal was just to cover expenses and then make a little bit of money and then last year I was trying to at least pay for the mortgage. And then my wife is a teacher. She pays for the rest right now. Right now is the very beginning of Oahu season. A lot of what I catch I sell to local families.

Sometimes when I have more than I can unload myself, I take it to the auction block over on the Honolulu. There are lots of other fishermen who go out and try to make a living by fishing commercially. A lot of them have other jobs too. Contractors or they'll do construction or kind of whatever work they can to supplement fishing because as fun as it is and as good as it can be, a lot of times when the fish are biting good, then everybody's catching which pushes the

“price down. In another time there's not much biting and you have to put a lot of time and a lot of”

resources into just getting a few. It's gotten a master's in diplomacy and military studies and in cyber security but I don't really want to do either of those things after having studied them. Being able to sell your catch is super satisfying. I don't know if I'll ever get to the point where I'll be able to like make a full living off of it and definitely won't ever get rich doing it but as long as I can get by doing something that I love

that's kind of all I need. There you go, right? Much as credler fishing for a living in a while in Hawaii. This series only works with your stories, so share them with us if you like marketplace.org. It's where you can do that.

So how do you win? First though, let's do the numbers.

“Now industrial's up 276 today, 6%, 50,285 and as that get a 22.10%, 26,293. Yes,”

P500 gained 12.2%, 7,4 and 45. The federal government is going to be investing $2 billion in

companies developing quantum computing. The money is coming from the chips Act signed by President Biden International Business Machines will get a billion dollar investment for the quantum venture IBM engine related to 12.4% on the day chip maker global foundries. It's roughly a third of that and at almost 15% today. Deer and company reported its second quarter profits were down thanks to sluggish demand for heavy farm equipment. We talked about the

farm economy the other day. Deer down five and two tens of one percent you're listening to market place. This marketplace podcast is supported by Intuit QuickBooks. If you're trying to grow

your business, Intuit QuickBooks Workforce can help you lead your business with confidence clarity

in a way that makes sense for you. As a sponsor at Marketplace's My Economy, QuickBooks Workforce recognizes that no one person or business's finances are the same. As your needs evolve, QuickBooks Workforce evolves with you, bringing together the core HR capabilities businesses expect with the flexibility to adapt to your specific needs. QuickBooks Workforce combines human intelligence and AI-powered tools so you get smart automation without ever losing control. It's been less

time reconciling and more time deciding what to do next. Your processes get streamlined and you get precious time and energy back to move forward proactively. Move from reactive to proactive with

brand new tools by making the switch to QuickBooks Workforce today. Your Marketplace's My Economy

at Marketplace.Works/My Economy and learn more about how QuickBooks can help your business grow at QuickBooks.com/workforce. That's QuickBooks.com/workforce. Support comes from Helen and Law, representing executives and professionals in severance negotiations against the nation's largest corporations. Helen and Law results that make a difference. HALU and E and Law.com This is Marketplace. I'm Kai Rizdahl. It's a week now since President Trump's meeting with

“Chinese President Xi Jinping. The results of those talks were honestly a little vague but”

more talks do seem to be in the offing. As of right now, we have been in a trade war with China for eight years and we cover it a lot. Today though we're going to do trade policy writ large and we're going to do it by talking about a book by Sumaya Keynes. She's a calmness to the financial times and chat bound. He's a senior fellow at the Peterson Institute for International Economics. Their book is called How to Win a Trade War, an optimistic guide to an

anxious global economy. What was the program? It's good to have you on. Good to be here. Thanks for having us. What one of you please just so we all have the same definition here? Tell me what a trade war is. Yeah, well that's a big question. I think most people think of trade wars as Trump style tariff attacks and what we are saying is that trade wars are much broader than that, right? So trade wars involve parties weaponizing trade flows,

using trade to coerce other actors make others do what they want. It's a scary world other. I was told Chadbound that one cannot win the A trade war and yet here humans may are having written a whole book about it. Help me out here. Well, I was actually one of the

“people who used to say such a thing. I think I said in the me on this program actually.”

I think I have, but that was the old world and unfortunately we're in a new world now, where we have to fight a trade war. You're not allowed to say I don't want to play in this game. And given that, the way to win is to do the best that you can. Sometimes that's to minimize your wounds, but we think there's actually more opportunities there than that that you can actually do better if you actually learn how to fight. Well, go on one of you because we all know that trade

wars are not great and it's not going great. Yes, so there are essentially two big trade wars happening right now, right? You've got the trade war that President Trump started on everyone, but then you've also got the slower burn trade war that China is essentially fighting with the rest of the world. And this is essentially what Trump is distracting from, right? By fighting trade wars with everyone else, he's distracting from that big problem. So step one of winning a trade war is

identify the right trade war. But also logistics win real wars, right? And so winning a trade war means doing the prep means identifying where you're weak, identifying where you're strong, considering all the weaponry, so stockpiling, giving companies handouts in this world of

else is fighting dirty and so unfortunately we've got to learn how to as well. Chad, does it ever

strike you or does it ever occur to you how amazing it is that we're here? You're a guy who's

been his whole life on on trade and trade policy, right, in academia and in the government and and here you are now literally in the middle of a trade war. It really does. It's it's some level a little bit surreal. We've thought so hard about how it is that you actually do need to use things like subsidies into industrial policy, stockpiling and tariffs to get yourself out of these situations. It is a little bit weird to realize that yeah, I'm now saying this, but it's the

reality that we're now in and China is really a big part of this story and these are some of the

“tools that you have to figure out how to use effectively when you're going to engage with China”

in a trade war. The thing is though, Simea, you know, so let's go back before Trump won, right,

before the original steel and aluminum tariffs and the previous 40-ish, maybe 80-ish years, it's not like global trade was great, but there were rules and there were things that people did and didn't do and it kind of seems like they don't apply anymore, right? Yeah, and I think that's for a couple of reasons, right? I mean, the obvious one is that President Trump is not a rule abiding guy, right? It's not, it's not his personality type, but also we've got China system and

there are certain aspects of it that are just not really compatible with the rules that we have now. The rules of the trading system are supposed to constrain the way that governments give money to their companies to give them handouts to give them a competitive advantage. Now the problem is that the way China gives out subsidies is incredibly opaque, incredibly hard to pin down and so those old rules just didn't work and for a while we tried, but we just have to accept

the world we're in right now. Chad, I don't want to go too deep on the great man theory of history, but you and Sme had a piece in the New York Times the other day about the reason summit between President Trump and President C, and YouTube basically I'm paraphrasing,

correct me if I'm wrong. This is never going to work with those two guys in charge, basically.

They're not seeking to get to a solution, I think, on this problem, and so what we argued is you probably do need to have a different approach between these two economies and one of it is to recognize, especially on the case of the Chinese side, they have built up so much market dominance in manufacturing sectors. We all know now these examples of rare earths and permanent magnets that U.S. companies are relying on to be able to make things here at home

“that you have to do something about that, right? You need to reduce those dependencies somehow”

and right now those two players really they've got a short term truce. We're not going to raise tariffs on you if you give us some of those rare earths and permanent magnets, but they haven't come to a resolution between themselves allowing us to reduce that dependency on the United States side. And what we would propose is an a way to actually tackle that kind of problem to prevent it from spilling up and escalating in a way that it did really last year, which was the root of some of the

problems in the relationship between the two countries. Just to jump on that, in an ideal situation, the U.S. would say, look, we're going to borrow less money, we're going to do policies at home that means that the trade deficit would fall. The Chinese would spend a bit more themselves, they would import a bit more, but for that to happen both Trump and Xi would need to have personality

“transplants. I think was the line in New York Times piece, right? It's not going to happen,”

and so again, we can't wish that we were in that perfect world, we've got to be pragmatic, and maybe the best we can do is manage the fall out as these two leaders, countries really thinking about the longer term, are trying to reduce their over dependencies on each other. Okay, so look, not to quibble with the choice of the the satellite earlier, the book's called "How to Win a Trade War," an optimistic guide to an anxious global economy. When do we get to the

optimistic part? Yeah, this is my confession. Okay, so I think it is optimistic, in that we're really not trying to throw up our hands and say, oh, isn't it all terrible, and you know, well, it's, well, it's me. There are things you can do, there are ways to fight a trade will better, where we are a bit pessimistic, is how long it's going to take to get to something stable, right, and that could take a really long time. If you look back at the 20th century,

of stable system, and you know, fingers crossed that we don't need that again.

“Chad Mountain, you get the last word. Decades and decades, that's a bit daunting.”

It is, but again, I'm with Samaya, we have to be optimistic about this. We do have a lot of lessons

from economic evidence, from history, about how to manage the challenges that we are facing right now,

how to do things better, and that's where some of the optimism comes from. Right now,

“I think we're in a place where we're not doing that well, we can do it better. Here's a guide to show”

us the way. Chad Mountain, Samaya Cains, their book is called "How to Win a Trade War." Thanks, you two, appreciate your time. Thanks for having us. All right, we got to go too much talking trade, not enough time for a final. Our daily products team includes Livy Burdette, Andy Corbin, Rio Hall and Horst, Sarah Leeson, Sean McKennery, Michaela Sam, and Sophia Terenzio Will story is the supervising senior producer

and I'm Kai Riznall, we will see you tomorrow, everybody. This is APM. Hi, I'm Morgan Sun, host of Closal tabs from KQVD, where every week we reveal how the online world collides with everyday life. You don't know what's true or not, because you don't know

if AI was involved in it. So my first reaction was "Cah-Hah" this is so funny, and my next reaction

“was "Wait a minute, I'm a journalist, is this real?" And I think we will see it to a streamer”

president, maybe within our lifetimes. You can find Closal tabs wherever you listen to podcasts.