SpaceX Just Filed to IPO — The Numbers Are Ugly

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talks with Tehran are in the final stages. Brent proved declined even though Trump also said, quote, "We're going to do some things that are a little bit nasty, if a deal wasn't made." Treasury yields also stumbled. Tehran rallied ahead of Nvidia's earnings more on that later. And finally, speculation swirled all day in anticipation of IPO filings from SpaceX and open AI. We will get into that right now. SpaceX has officially filed

to go public. In a prospectus filed with the SEC yesterday, SpaceX said it will list on

the Nasdaq under Ticker, SPCX. The company is looking to raise $80 billion or more, which

would make it the largest IPO in history. The prospectus offers the first peak into SpaceX's financials before the company goes public on June 12th. So, lots of numbers to discuss here. Today, we're speaking with Patrick Boyle, professor at King's College London, former hedge fund manager and host of one of the most popular finance YouTube channels. Patrick, thank you so much for joining us again on the show to discuss again. SpaceX, the filing

for which literally came out about 15 minutes ago, 20 minutes ago. So, we've had that amount of time to get up to speed on it, but there are some interesting things here. I'll just

start with some of the financial data that we learned, $4.7 billion in revenue in Q1226,

$4.3 billion in net losses in Q1, revenue grew 15 percent from last year. But, plenty

“other things that we could talk about, where would you like to start what strikes you?”

Yeah, I mean, to be honest, it's a fairly interesting IPO document. I mean, I'm sure you saw the first 15 or 20 pages were photographs of rockets, which is a little bit unusual. And somewhat reminiscent of the WeWork IPO document where there were lots of photos in there. Other things that were interesting, the company is lost $37 billion since inception. There's lots of stuff. There's some new business stuff in there. There's talk about point

to point travel, where people will be able to travel from place to place on rockets rather than airplanes. There's talk of, I believe I saw in orbit manufacturing, or at least manufacturing on the moon, but I've noted down in orbit. I'm not sure. That's correct. Asteroid mining is another business that they expect to make money from as well. Yeah, I mean, when we spoke with you on this topic, one of the things you point it out is that

the financials here are just a little bit concerning, especially if you're looking at a company that's going to go public at $2 trillion, that's at least what people are expecting. Close to two trillion. Yeah. One thing that struck me is they are losing money, but they also included their adjusted EBITDA, which they reported was over $1 billion in Q1226. And I couldn't help but notice the fact that they, in order to get to that number,

“you have to add back almost two and a half billion dollars in depreciation and amortization costs.”

Which to your point is their whole business because they're building rockets. Yeah, because it's the cost of the rockets, you know, there's huge orangie to build the rockets. And then the depreciation, you know, they put all those star-link satellites up there. They last about five years and then they fall out at the sky. And so that is your depreciation.

Like this, like you want to look at basically, you know, is it profitable or is it on the path to profitability? It doesn't seem to be. There's other stuff in there as well. I don't know if you

“noticed that Elon Musk will get, I think 85% of the voting shares. There's, you know,”

for, he doesn't like as we know, shareholder lawsuits. And so that has to go to arbitration. And so essentially, if you're buying, like this, this is very much an IPO for the Elon Musk fan. Like you're not necessarily that worried about profitability. You know, it's sort of, you know, it's what it used to be sort of rockets. Now it's rockets Twitter, AI in space, you know, space manufacturing, transportation by rockets and asteroid mining. And not all of these businesses are

functioning at the moment. Yeah. Even if you look at the, you know, the Starship thing. The Starship, they're talking about, what is it? Sorry, I've got the numbers down here. But basically, they're talking about hourly launches of Starships in order to get. I think something

“like a million tons of stuff into space per year. At the moment, you know, I think the next Starship”

test is tomorrow. It's never gone into orbit. It's never carried any cargo. I think it's going

to carry some dummy SpaceX satellites tomorrow. But this is, you know, this is very much a vibes based IPO. Like it's, it's four people who are excited about Elon Musk. It's not really for for people who are going to scrub through the numbers and ask questions about profitability. Yeah, just on that point, some of the company statements that we saw at the top of the document, the mission of this company is to, quote, ensure species level redundancy and that the light of

consciousness will not be tied to a single planet. It's also to, quote, understand the true nature of the universe to ensure that humans don't have the same fate as dinosaurs. By the way, that that phrase, the light of consciousness is mentioned 10 times in the filing. And AI is mentioned over a thousand, 200 times in the filing. Just looking at profitability again, they break out each of the businesses into space as a business connectivity, which is like satellites and AI. Space

lost $662 million in Q1 connectivity turned a $1.1 billion profit. And it seems that actually

the satellite business is pretty good. AI lost two and a half billion dollars. And that really struck

“me that maybe this AI thing is perhaps the problem. And I think that's per quarter isn't it that”

last? That's the quarterly number. Yeah. What do you make of that those numbers? So yeah, you're looking at and I think that was growing as well, like the the last from AI is growing. And the whole story of space, it's no longer about space flight. It's kind of about this data centers in space idea. You know, there are a lot of people who've done research. It's not clear why it would be cheaper to put a data center in space than somewhere on the Earth. It might

be cheaper to put one on the bottom of the sea. You know, it's not clear why this is necessary, but I think it's a mistake to ask too many questions about this. You just have to do what you're failing, you know. So this, I mean, what do we think this will mean for this IPR? I mean, they're looking to raise $80 billion bit against IPO in the history of business. But it sounds like you are not really convinced at all. I struggle to be convinced. I likes the idea

of space travel. I'm excited by sci-fi stories in general. But I mean, looking at these numbers, possibly this seems insane, what do you think this means for the IPO? Do you think that this stock will actually perform well? You know, firstly, I think they're kind of rushing out out largely because it's burning so much money, right? Like 37 billion in losses since inception. And you know, you know, the VCs and whatever only want to keep putting more money in for so long.

And there's a very hot market right now. You know, S&P is near highs. And people are excited by Elon Musk stuff. They're also excited about AI. And I think, you know, Elon for years said that

he would never take SpaceX public until he had reached Mars. I think told I was like a colony on Mars.

drying up for this sort of stuff. You know, this is worth a lot and they want their money back. On top of that, you've got big IPOs coming from open AI and coming from anthropic. And even,

you know, there's an argument, you know, they basically want to get out first because the

question is will there be appetite, you know, if investors have to liquidate something in order to buy these new things at what point do they not necessarily want to buy the next AI thing coming out.

“So I think to a certain extent, this is a race to get this stuff out before the others.”

For the people listening who are fans of SpaceX and who plan to maybe purchase this IPO or believe in the company, I mean, what is your honest bullcase for this company? Like in what world, what would it take for this company to make sense and for it to be, you know, a profitable unsustainable business that is worth investing in? Well, a much lower price to start with, but that's, that's now what's going to happen, right? Because of course, this is the whole thing

with investments. Like it's, you're buying a thing and the question is how much are you paying for the thing? Yeah. And this is the most out there valuation of any company. You can think of like it's way beyond the valuation of Nvidia and Nvidia is hugely profitable with massive margins, SpaceX just isn't it's, you know, it's a money furnace, right? Especially with all this, you know,

“X-A-I, the AI company, you know, I think you pay 250 billion for it, like SpaceX bought that from”

Elon Musk. Then within a few weeks he announced that the tech stack within X-A-I was not working, basically it wasn't very good and it had to be rebuilt from the ground up and he said, "Well, that happened with Tesla as well." And it's like, yeah, but you just, you just got people to pay

250 billion dollars for this, right? They bought it from you. And so, you know, this is, you know,

the thing is, would I bet on the price falling? I mean, in the long term, yes, just because I think it's, you know, the sort of gravity can only be overcome for so long. But, you know, there's the funny thing, as last time we spoke with spoke about the NASDAQ inclusion. So 15 days after the IPO, passive investors, whether they like it or not, will become shareholders. And that is an incentive

“even to get in the IPO, because you know, 15 days later there's sort of some new backholders to take it”

off your hands. In the long run, like any company, the value of any company, is the cashless, like you're buying cashless, you're buying the profits of a company, you know, is there a version

of the world where it could become profitable? Yeah, but it doesn't look like an amazing business

at the moment. Like, it's a wonderful, it's a cool science experiment, but that doesn't mean that, you know, it's not obvious how you convert all of this stuff into dollars and cents. You mentioned earlier the other company that is set to go public, which we actually just learned is going to go public as of yesterday. That is open AI. There were questions over whether this was going to happen. Even the CFO was saying that we needed more time, that the company needed more

time before it goes public. But apparently now that the Elon trials out of the way, they are going to go public just before we let you go. I'd love to just get your top line thoughts on Open AI as a business, your expectations for this IPO. And then hopefully we can have a longer conversation about it at some point too. Yeah, I mean, you know, once again, all of this AI stuff, it's really early in this business and it's really hard to know who the winners and losers

will be. You know, so the question with Open AI would antropic with any of these is, so are they the sort of Google of search, you know, or are you investing in the Yahoo or the AOL or whatever, you know, because being first doesn't necessarily make you the big winner. It's not something that I'm excited about just because it's kind of a role of the dice and the the Open Prairie kind of thing. You know, also it's not obvious, even if AI is a huge productivity

booster, it's reasonable to think it could boost the productivity of all the people using it, but that doesn't mean they get to charge that because there's sort of 10 models out there. They're all reasonably equivalent to each other. And so the question is will AI be a winner take

Uber, you know, where there's sort of, you know, in every part of the world, there's Uber and then

“there's a few other ones. And the problem with if there's always a few other ones, you never really”

get to crank up your prices. And so people benefit from the affordable taxi rides, which is great,

but the companies themselves never get that profitable. So with these huge valuations,

the assumption is that one of these things is going to is going to win the whole market, and it's going to be able to charge an awful lot of money for their services in the future. Very exciting time in the IPR markets. I mean, it's just incredible what we're going to see this year. It is for years people have been saying, you know, there's no companies going public. In fact, they were all going private, right? And also people said, you know, all these companies,

they're hoarding cash, they're not investing. Now we've got all of, you know, big tech are spending a fortune on building data centers and all of this stuff. And we've got all of these

“companies going public. So you're people, yeah, but the scale of them is going beyond anything we've”

seen before. So people are getting what they want, which is the opportunity to invest in this stuff and these companies investing in stuff rather than hoarding cash. Yeah, big when for the bankers that are underwriting these companies too. Patrick Boyle is a professor at King's College London and a former hedge fund manager and he is the host of one of the most popular finance YouTube channels. Patrick, thank you so much for joining us again.

Appreciate it. Yeah, thank you for having me on. After the break, Nvidia reports earnings. And by the way, we're heading out on tour next week so for more info and to get tickets to a show near you, head to propertymarkets tour.com.

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restrictions may apply. Hi, I'm Maria Sharapova host of the Pretty Tough podcast. Each episode I sit down with high-achieving women to discuss the pursuit of excellence without apology. This week on the show, comedian and best-selling author Chelsea Hamler gives her tips on independence and age and gracefully. I would argue that 50 now that I am 50 and I understand life more than I did when I was 30 or 40 is that you get so much more wisdom and you get so much

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separate people who stay stuck from people who keep growing. Listen wherever you get your podcast or watch on youtube.com/yourrichbff. We're back with Proxy Markets. In video posted earnings last night and the entire economy was watching the chip company had beaten earnings expectations for 18 of the previous 20 quarters and this

time was no different. Total revenues came in at over $81 billion up 85% from the same period last year

and beating analyst expectations in video also authorised an $80 billion stock by back and a massive

impressed the stock whipsword after hours. So here to give us a breakdown on videos earnings. We are speaking with Zed Francis, CIO and co-founder at Convexitas. Zed, thanks so much for joining us.

Just some of the numbers here. $81 billion from revenue up 85% year over year. The data center

revenues up 92% year of the year, just these numbers are just astounding. Give us your initial read on these in video earnings. Yeah, I mean, ultimately in video has turned into an established veteran company in comparison to what it was handful of years ago. So as you alluded to, the

“beaten arrays is basically what's baked in the cake. That's what everybody's expecting at this”

point because that's what they've been doing in the past. And we see this stock moving but kind of benign, ultimately. I'm a volatility guy at the end of the day. And the options market was pricing in a five and a half percent move in Nvidia on these earnings. And the entire range of after hours, where I would see well inside of that. So I think we're kind of the point where Nvidia is the new Apple. Almost a boring event, even though it used to be the main show for

the last handful of years. Right. Yeah, in that sense, I mean, the fact that they are authorising

80 billion dollars in new buybacks, they're raising the dividend from one cent to 25 cents per share.

I kind of see that and I love that. It's like they're owning the fact that they are an established profitable company. And it does seem quite Apple-like in that regard. Did that stand out to you? The fact that they are author turning that money to the shareholders? Yeah, I mean, it's a very interesting sector, right? Because ultimately, these semiconductors are viewed as hyper-cyclical, but Nvidia has kind of disrupted that concept over the last handful of years. Right. And it

“bring up Apple because I think it's a reasonable parallel. Like Apple started as hardware”

then started building their network and started building services. So even though hardware is the main driver of Apple's business in terms of the top and bottom line, there's more confidence in reoccurring revenue from that business than a traditional cyclical hardware company. And Nvidia is trying to follow the game plan and has recently been successful over the last couple of years to establish that concept with the market as a whole. And the reason they're kind of able to do that

is they're the highest value ad in their space. And a decent amount of why folks are purchasing, you know, their chips here, so somebody else outside of them, you know, having this spread and comparison with us, the market in terms of the value ad is also software. So they're, they've been trying to make that pivot to have the market view is more reoccurring revenue business rather than a pure cyclical, which traditionally the semiconductor space is better. Yeah, what is, what is the

argument on that front? Because, I mean, on the one hand, they're just printing money right now, but so are many of sort of the memory stocks, sort of the sand disc, there's an example. And the concern there is, you know, there's a gold rush for data centers right now. Everyone's trying to build a data center. Once they're built, though, maybe that's it. At which point, what is Nvidia going to sell? Is that a concern for the company? Is that something that they

are addressing and talking about? Yeah, and so you bring up a permanent point. It's very much a barbell industry within the same exact sector. So, you have Nvidia trying to become less cyclical. They're definitely the least cyclical of the group. And the memory guys on the other side are the most cyclical. So what, what does that mean in terms of valuation and how you think about the business? Well, Nvidia has more four castable revenues in the out years. Beyond, you know,

years one, two, three. And so because of that, years ago, they were the first mover in terms of

valuation because people gain confidence in the, you know, out years, you know, the years three plus and their ability to produce those revenues. And thus, you get a higher valuation. If it folks believe that a decent amount of your ability to produce those earnings is actually reoccurring, then you're naturally going to get a higher valuation, which is exactly what happened with Apple again, from kind of 2013 through life. It went from a team's P stock to a, you know, mid-20's

plus simply because the confidence of those reoccurring revenues were grown. And in video,

“it's trying to follow that path opposite side, those memory folks. Yeah. They have a clip, right?”

You know, it is a purely commoditized business. For right now, they're on the right side of the supply demand dynamic, where they're raising prices dramatically expanding those margins. But the market's belief is there is a hard cliff where eventually they'll go back, you know, to where

a 12-ish. But ultimately, that's because well, we have confidence in the next 18, maybe 24 months of

“earnings. But after that, very, very little confidence. So it's all about discounting what we know”

right in front of us versus that longer term, kind of DCM valuation of something with reoccurring revenues. What do you make of the Nvidia valuation at this point? I don't have the multiples in front of me, but the stock's training at around $220 a share. It's up 18% year to date. It's up 66% in the past year. How are you feeling about the valuation at this point? Yeah, I mean, it's a forward valuation in mid-20. This is about in line with the S&P, technically a little lighter than the

market as a whole. So it still has a little bit of that cyclicality priced into it. But I would say it's in the reasonable realm. You know, where we're, you know, largest company in the world. It's tough to grow exponentially, even though they continue to do so in the short term when you're this large, where the memory folks are on the opposite. It's the expectation of that massive decline in earnings

“has successfully been pushed out over the last, you know, six, seven weeks. And that's why we've”

seen massive moves in those specific stocks. But they're always going to be hyper cyclical

where the earnings that you're going to, you know, hopefully, you know, earn as a shareholder are right in front of you rather than over the next, you know, a couple of decades. Yeah. Final thing that is kind of interesting, no shipments have chips to China this quarter for Nvidia. They shipped four, four and a half billion dollars in the year before. I mean, this in context with Jensen Huang jumping on the plane with President Trump going to China. I believe that was last week.

I think that's right. Do we learn anything on the China front is China going to be a business foreign video? Is it not where are we on this? Well, I think we're a little in between whether not China's actually receiving the end product via different routes rather than directly, then might still be happening on the side. But that is a potential growth engine, right? If we actually get some more level headed relationships with China, then may reopen that market directly

for them. But I wouldn't be surprised if they're getting a decent amount of that revenue through other sources. Z Francis is the CEO and co-founder of convexitas Z. Thank you so much for breaking down these Nvidia earnings. We appreciate your time. Thanks for having me. More news in the world of financial corruption, Trump and his family have been granted forever immunity from investigations and audits by the IRS. This comes after Trump with Drew his 10

billion dollar lawsuit against the IRS for allegedly disclosing tax information without information.

Now, per a pledge from the Department of Justice, the US government will quote be forever bored and precluded from prosecuting or pursuing tax claims against Trump or his family. In the words of the DOJ, Trump has been forever discharged from any tax crimes. Now, at a certain point, there's just not much commentary. I can even provide here. I mean, I can tell you that this is corrupt. I can tell you that this is what dictators do. I can

tell you that this appears to be illegal. And if it isn't, then it should be. But you already know all of that. I mean, there's nothing more that I can reveal by analyzing what the headlines are already telling us because the headlines speak for itself. Trump has taken control of our government. He defunded the IRS. He defunded the DOJ. He fired the SEC director who tried to investigate his insider trading. He personally canceled a 160 different white collar crime investigations in one

year. Those white collar crime prosecutions have hit a record low this year. And now, he has coerced the DOJ into banning the IRS from investigating or auditing his tax claims for the rest of time. Forever was their term. So, do I really need to argue why that's bad? Do I need to present my case

“on why that shouldn't be happening? I don't really think so. I think either you hear these facts”

and you acknowledge them, or you hear these facts and you ignore them, or you say they're not a big deal, or you just deny that they're even true. So, the only thing that I can really do here in

what happened, to tell you the headlines. And that's what I'm doing. I'm telling you what happened.

“And in the context of markets, I can explain why this is bad. It erodes faith in the system of”

markets that creates this belief that for a certain set of people, the rules of markets and regulations

do not apply. And in this case, that is true. And it also just makes Americans assume correctly,

“by the way, that the system is rigged. But I hesitate to even make that argument, because I just”

don't see how you could conclude that this kind of corruption is anything but bad for everyone.

And so I end this episode to tell you, I have nothing to add here. This is just another day

“of unprecedented corruption in the Trump administration, the likes of which we have seen over and”

over and over again. You either acknowledge what is happening, or you don't acknowledge it. But I am not going to be the one to make you care. Okay, that's it for today. This episode was produced by Claire Miller and Alison Weiss, edited by Joel Passen, and engineered by Benjamin Spencer. A video editor is Brad Williams, or research team is Dan Schlan, Isabella Kinsel, Cristina Don Hugh, and Mia Sauvario,

and our social producer is Jake McPherson. Thank you for listening to Proftly Markets from Proftly Media. If you liked what you heard, give us a follow. I'm Ed Alson, tune in tomorrow for a conversation about taxes with Ray Maddoff.