I'm a March baby.
to see her. I love celebrating with close friends, but there was one cloud over the trip planning.
“She was worried about the cost, so I shared my favorite tip for making travel more affordable.”
While you're away, you can list your space on Airbnb and make some extra cash. If your place is just sitting there empty, that's a missed opportunity. And with Airbnb's co-host network hosting is now easier than ever. You can hire a vetted local co-host who has hosting experience to take care of your home and guests. A co-host can handle all the details so the stay runs smoothly. They can do everything from creating your listing, handling guest communication,
to offering onsite support while you're away. So if you're ready to host, but need a little help, find a co-host at Airbnb.com/host. 2025 had some of the lowest points in my life, which is saying something. It also had some of the best moments of my life as a new mom. It was a lot. Thankfully, I have a great therapist who helped me with the ups and the downs. Our sponsor Rula helps match everyone with a great therapist. While keeping therapy affordable,
Rula partners with therapists and psychiatrists nationwide enabling you to find your personalized solution and the right therapist for you, based on your needs, preferences, and state requirements. And Rula isn't just affordable, the experience is tailored around you. Because they know that finding the right therapist can make all the difference. Rula makes it easy to find a mental health provider who is accepting new patients and appointments are available as soon as tomorrow.
Thousands of people are already using Rula to get affordable high-quality therapy that's actually covered by insurance. Visit Rula.com/mn to get started. That's r-u-l-a.com/m-n-n. You deserve mental health care that works with you, not against your budget. We had a heat wave
which put me in the mood for some ice cream. Since it was the first pint of the season,
I went with burnt sugar vanilla from gingers. I mean, it is heavy. Gingers use a square so I could order online and skip the wait. No lines, no stress, just grab and go deliciously. Now I paid online, but they use square as their point of sale in restaurant orders as well. It just makes the process so easy. So if you're looking for a way to smooth out the customer experience at your restaurant, why not give square a try? Square works for one location
“shops, pop-ups, mobile service businesses and multi-location franchises. Take payments at a key-ask”
counter website or with your phone all synced in real time. And right now listeners get up to $200 off square hardware. When you sign up at square.com/go/m-n-n. That's squ-a-r-e.com/g-o/m-n-n. Run your business smarter with square. Get started today. I'm Nicole Lappen. The only financial expert you don't need a dictionary to understand. The biggest IPO in history is coming and this is not a drill. Elon Musk's rocket company has filed with the SEC. The roadshow is reportedly launching the
week of June 8th and the company is targeting evaluation of up to $1.75 trillion, aiming to rate 75
billion in a single public offering. So exactly how historic is this? Well, right now the record
holder is Oli Baba, which raised $22 billion in 2014. So if SpaceX goes as planned, that would be 3x larger. Some analysts are rejecting that the scale and the single deal could exceed the total proceeds of every US IPO in 2024 and 2025 combined. SpaceX CFO Brett Johnson has reportedly told the team of banks working on this deal that retail investors like you and me will be a bigger part of this IPO than any other in history. Elon himself wants to reserve up to 30% of the offering for retail.
The industry normed is 5-10%. Whether that's genuine appreciation for his supporters or a brilliant marketing move is a conversation for another day. But the fact that you're even being invited
“to the table is a really big deal. But how should we treat this IPO and also IPOs in general?”
Because the machine behind a public offering is complicated. It's political and in the
Opinion of some very smart people, it's a system that is rigged.
democratize access to companies that are making insider's rich. And if you're thinking about
“participating in the SpaceX IPO or any other IPO for that matter, you do need to understand the”
game before you start playing. By the way, if you don't want to wait until the IPO to invest in some of the busiest private companies out there, clients of my firm private wealth collective do get an allegation to the SpaceX IPO. I mean, I'm going to explain exactly what that means later.
But if you're interested in getting access to more investments, you can always book a free intro
call using the link in the show notes. Okay, so we do know what happens at the end of the IPO. You ring the bell and then retail investors combine the stuff, right? But what happens before that is where the cracks of the foundation really do show. Two IPO, first a company has to hire an underwriter. These are typically investment banks like Goldman Sachs, Wilkins Stanley, JP Morgan, who are tasked with managing the IPO process itself. New job is basically to do due diligence
on the company to help determine its valuation and to really build the bus. They do take a fee typically three to seven percent of the total money raised. So on a $75 billion deal like SpaceX, that fee could be well into the billions. Then the company files a registration statement with
the securities and exchange commission or the SEC. This is the company's full financial disclosure
to the public. It includes revenue, profits, losses, who owns what and how the money raised will be used. This is a public document when SpaceX files its prospectus, you could read it,
“you should, by the way, or at least have AI give you a summary, and that's honestly what I'm”
going to do with him being real. Next, the roadshow. This sounds way more fun than it actually is. This is where the company and its bankers go on tour and pitch institutional investors. These are the big pension funds, the mutual funds, the hedge funds out there. The roadshow usually runs about 10 to 14 days, and the goal is to gauge demand and to build what's called the book. It's a list of investors who want in and at what price. The night before the IPO officially launches, the company
and its underwriters set a final IPO price based on the demand. That price is what institutional investors pay. Remember that? It is important. Then the next morning, the stock begins trading on the exchange, either the New York Stock Exchange or the NASDAQ. The NOSC is the older, more traditional exchange company is like Walmart, Coca-Cola, Pfizer, or listed on the New York Stock Exchange. The NASDAQ is home to major tech names like Apple, Microsoft, Meta, Google.
It's on a totally clean categorization. The NYSE has some tech names like Uber and Dell, but generally tech is listed on the NASDAQ. Both are totally legit exchanges. The choice usually comes down to the company's profile and the fees and the services each exchange offers. SpaceX has not conferred its exchange yet, but given its tech forward profile, NASDAQ would be a natural fit. Now, we know the major point of all of this IPO rig. A morale is to raise money.
Going public is one of the most powerful ways to raise a massive amount of money. That's,
and again, SpaceX wants $75 billion. That kind of fundraising is nearly impossible in the private market. But there are other perks of going public to, like liquidity for early shareholders, founders, employees, early investors, have often waited years to cash out on their equity. An IPO creates a liquid market where those shares can finally be converted to cash. IPOs also help with credibility and currency. Being a public company comes with a layer of
prestige, but also accountability. Public companies can also use their stop as currency for acquisitions of four employee compensation for partnerships. SpaceX is going to benefit from all free buckets of those perks. They want cash to build data centers in space. They want to fund Starship Development, they want to expand Starlink, their satellite internet service, which is a major part of the business. After an IPO winter, there are a lot of big IPOs anticipated
in the next few years, not just SpaceX. Open AI andthropic data bricks, stripe, are all reportedly
“planning IPOs. And so it's an important time for tech employees to really understand what happens”
to their equity in an IPO process. And lawyers might get equity in the form of stock options, which represents the white to buy shares at a fixed strike price or in RSU's. RSU's are restricted stock units. They invest every time and then they convert to shares. When your company is private, those equity stakes exist mostly on paper. An IPO is theoretically the moment they become real money. But you can't just passion immediately after the IPO, if you're an employee,
there is a lock-up period. The lock-up period is a contractual agreement typically 90 to 180 days that prevents insiders like employees, founders, and early investors from selling their shares
After the IPO.
the price would absolutely crater. The lock-up period gives the public market time to find the
“SOT's true value before insiders flood it with supply. Most IPOs have 180 day lock-up period.”
So if SpaceX lists in July, let's say employees likely can't sell until January up the earliest. And there's some nuance here. By the time the lock-up expires, the stock price couldn't be higher, lower or completely different from where it opened. So to SpaceX employees, you're going to want to have a plan before that window actually arrives, not just the day up. Before I get back to the retail investor side, just three quick things. I absolutely begging you to familiarize yourself
with. If you're sitting on employee equity ahead of any IPO. Number one, figure out what you owe in taxes before you sell anything. Depending on how your equity is structured and when you exercise, the tax bill can be significant. And it can hit before you've actually sold us in share. Number two, once the lock-up expires, you'll be subject to blackout periods around quarterly earnings releases, which can limit when you actually are allowed to trade. Number three, think very carefully
about concentration risk. If the majority of your network is in one company's stock, selling a meaningful portion after the lock-up, even if it means paying taxes, might be the right financial loop for you. All right, retail investors. Us. Our IPOs, the solution to democratizing wealth
“or will the system work against you. You remember our friend Bill Gerley, he shared his thoughts”
on money rehab. Bill is one of the most respective venture capitalists in Silicon Valley. He's been an outspoken critic though of the traditional IPO process for years.
Here's what he said on the show. I mean, automated trading was implemented in the late 50s
and match supply and demand is understood by any first-year comp size student or first-year finance student. And yet that's not how they allocate. It's not how they determine prices, not how they allocate shares. Regardless of the big money IPO or any IPO that's traded up or down, the right fair thing to do on an initial offering is to let price win and to allocate shares based on whoever's willing to pay the highest price. It's how every stock opens for trading every
single day like these techniques are known. And it's how direct listing works. And ironically,
“it's how an initial coin offering works. So that's how anyone in the crypto world would match”
supply and demand. And we've just gotten used to that not being the case in the public markets. And these stocks are all mispriced because here's another huge journey. The next morning things like an hour to open. They're opening it the way you do a direct listing. That next day they do match supply and demand. And the reason there's a gap is because they didn't do it the night before. It's really sad. I'm surprised. I'm personally surprised that more people are
not astonished at it. And I'm surprised that people aren't embarrassed by it. But the long-term clients of the investment bank get a free one-day pop. And then they give some of that money back through over-priced trading. So the money flows back to the investment bank. Bill's central argument is this. Underwriters deliberately underpriced IPO shares. This creates a massive first-day pop, a surge in the price when trading opens. It sounds like it's a great thing. But it's
actually not. When shares are priced at, let's say, $33 a share and trade at $111 on day one, that 250% gap goes straight into the pockets of institutional investors who bought at the IPO price and then sold into the frenzy. By the way, that isn't a hypothetical example. Those are big mous numbers. Big MOA public at $33 a share and it closed its first day of trading at $111 per share.
That is the biggest first-day drop of any billion-dollar plus IPO in US history. The offering
was over-subscribed by 30 times. Bloomberg reported that the company and its early shareholders effectively handed over more than $3.5 billion in value to investors who got IPO allocations. The story is the opposite for retail investors, though. At the same time, I'm recording Ms. Figma is down 77% since its IPO highs. That means that retail investors, regular investors, who got in after that big pop, they lost a vast majority of the money invested. This is why
Bill Gurley says the system is rigged, and I absolutely see what he means. Which is why I had been building some things to try and level the playing field. An IPO isn't the welcome optimization tool that it used to be, so I created a new tool, my firm private wealth collective.
If you want access to private companies like an institutional investor, we ca...
with that. If you're wondering about investing in an IPO, our fiduciaries can help you make the
“right decision for you. And if you're an employee at a company going public, yep, we can absolutely”
help capitalize on that moment as well. Intro calls with our fiduciaries are absolutely free. So there's no reason not to give us a call and just see how we can help. Again, the link to book a call is in the show notes. In the meantime, if you're thinking about investing on IPO day, not just
for SpaceX, but for any company going public, I'm going to give you a framework. First,
understand that the IPO price and the price you'll pay are different things. Retail investors unless specifically allocated shares in the offering by at the market open. That price has already baked in all the institutional excitement. You're not getting in at $33 as in the Figma example. You're getting in at whatever the market thinks the stock is worth after institutional investors have already made their boobs. Second, use cloud or chat or whatever your favorite AI tool
is these days to peruse the registration statements from the SEC. I mentioned this earlier,
“it's called the S1. I know it sounds really dry and honestly, it's not dry. But it is super”
super helpful and with the AI shortcut, I promise you're not going to be bored to tears. The prospectus is going to tell you the company's actual revenue, actual profit, or loss, actual growth trajectory, and a full list of risk factors. SpaceX, for example, is reportedly
generating around $15 to $16 billion in revenue with roughly $8 billion in profit. By any measure,
a real and formidable business. But a $1.75 trillion valuation puts it at over 100 times earnings. That is pricing in an extraordinary amount of future growth. So, just know what you're paying
“for. There it watch the Lockup expiration. One of the single most reliable patterns in IPO investing”
is that stock prices often drop when the Lockup period ends. That's when Insiders fled the market with shares and lists supply demand balance shifts sharply. Figma stock dropped more than 40%
in the weeks following its debut before the Lockup period even expired. The Lockup period is disclosed
in the prospectus, so put it in your calendar. SpaceX may be a genuinely extraordinary company, the largest IPO in history going up against a volatile market with a Musk brand that is in equal parts, magnet, and lightning rod. It will be a spectacle no doubt. But of course, keep listening to money rehab, so you know what the red flags are and the green flags are. For today's city can take straight to them bank. I'm going to talk about paperwork just one last time. Before
the SpaceX perspective drops in late May, try to schedule a calendar reminder to check out the use of proceeds section and the risk factor section. Most retail investors skip vote. The use of proceeds section tells you exactly what the company plans to do with your money. If the answer is mostly paying down existing debt or providing liquidity to early investors, that is a yellowish flag. It is a much better sign to seek capital being deployed back into the business. The risk factor
section is where companies are legally required to be brutally honest about what could go wrong. And for SpaceX, those risks include Elon's concentrated control, government contract dependency and competition from emerging launch providers. There are so many tools to make this information easily accessible and if you use them, you'll have an edge.
