SpaceX IPO Is Said to Be More Than Four Times Oversubscribed

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2:24Plus, global business, finance, and tech news as it happens. The Bloomberg Businessweek Daily Podcast with Carol Masser and Tim Stenevek on Bloomberg Radio. SpaceX's IPO has attracted demand for more than four times the available shares, according to people familiar with the matter. This ahead of that firm stopping to take orders. The banks are expected to stop taking orders from institutional investors after the market closes in New York at 4 p.m. on Wednesday. Wednesday? Yeah. Because there's so much demand. Yeah. Is that normal? Let's talk to Ed Ludlow about it. He's the co-host of Bloomberg Tech on Bloomberg TV.

3:00He joins us here in the Bloomberg Interactive Brokers Studio. There's nothing normal about this IPO. Yes and no. I mean, how they conducted it is unusual. but you know everything that elon musk companies do can be unusual atypical and not conform to wall street norms but like the main manifestation of that is before they went on a road show which is where management and their bankers pitch the the ipo and the ideas behind it to the investors they priced it before you don't do that usually you have a range of prices and then you go like so what do you think guys where should we price this this bad boy but they came out early with 135 at a, you know, the math is 556, 5.6 million shares at 135 a piece, raising about 75 billion, 1.8 trillion valuation.

3:48So it's kind of like, what have they been doing for six days? I don't know. Whatever they want. What have they been doing? I think that a big part of it is that the price, my latest understanding is I don't think it's moving from 135 a share. It's really an issue of allocation. So what we've reported is there are all these institutional investors. They really want in. So they're placing orders. They're like, I want$10 billion worth of shares. We reported that from the Middle East, some of the sovereign wealth funds. Yeah, Saudi Arabia's public investment fund, Kuwait Investment Authority, Qatar Investment Authority.

4:23But just because that's the case doesn't mean they'll get it. You know, what I keep hearing, and I feel pretty good about this now, I've had very interesting conversations in the last 24 hours, is that the unusual bit about this is the price, the methodology has been set by Elon Musk and Brett Johnson, the CFO. And traditionally, they're probably listening right now. If I'm wrong, phone me. But those on the other side of the table don't agree with you. The bankers usually have a bigger role to play here. Of course, the bankers have a role. But it's being done on Elon Musk's terms, which is fascinating.

4:57Of course it is. It's massive. It's the thing that we've talked about for so long. I want to take a big step back. If President Trump wasn't in the White House, if Elon didn't have kind of the positioning that he has had, it feels like, over the last year or two, even though there was some, it felt like, tension between the two at one point, I don't know, would the IPO be happening? Is there a Trump component to this, President Trump component? I don't know that there is, you know, why is SpaceX doing an IPO? SpaceX needs money. Why does SpaceX need money? They're in a growth phase where all of the things they've outlined just require capital.

5:38And actually, like, again, you know, I don't, I'm not trying to make this a victory lap for Bloomberg News and for us in particular. But like, when we broke the story that the whole rationale for going public was to raise a very significant volume of money to buy GPUs. A lot of people were like, no. But in the end, that's exactly what it's for. Elon Musk has made his views on public markets known, right? Right. And the burdens of being a CEO of a public company. Twitter's private. Well, yeah. Right. Now it's, I mean, we can try and explain that. You can buy into Twitter if you want on Friday. Right, that's true.

6:22Musk took Twitter private. He then changed its name to X. It was then bought by XAI or folded into it. And then XAI was folded into SpaceX. Basically, in the end, we got to, was it last Thursday or Friday, the Jamie Dimon session? Jamie Dimon did a virtual interview of Elon Musk. Was that wild? It was unusual. Again, it was highly unusual. But it was also the idea was it would be democratic. And Jamie Dimon outlined this, the idea that, look, I'm speaking to Elon Musk publicly live. I have questions I want to get to. And, you know, this doesn't normally happen. But in the end, after a very long response, he just said, why are we?

6:58Oh, because I need money. We need money for growth. You know, and I don't know that this year versus any other year is because of the White House. I want to go back to the valuation. I promise we talk about the valuation. Tatiana Dare, writing on our Bloomberg Markets Live blog, she's pointed out that SpaceX's targeted valuation of 1.8 trillion, roughly. nearly 100 times its revenue from sales last year uh it's extreme even by recent tech ipo standards surpassed only by rivian during the peak of 2021 you're laughing because you were there yeah 88 since the i remember living through the rivian ipo and thinking my goodness this is traumatic yeah like well now shares are close to 90 but it's also like it's just this is a different beast with space so talk about that yeah so like you know um a question that a lot of people have we just did a one hour Bloomberg live Q &A.

7:48You guys have done those, right? And it's so interesting. A lot of the questions from Bloomberg subscribers are to do with things like, how is the valuation calculated? And what happens in the future? And I don't have a crystal ball, so I don't know. But what I will say is the existing investors, many of them feel comfortable with that valuation because in their models, they basically say, okay, do I believe the total addressable market that SpaceX has outlined it's going after in its prospectus yes I do so they model for what revenues could be in 2030 or 2050 and work backwards and they and all of them are at pains to explain this to me and they're like if you do that actually where sales were in 25 and right now trading at a multiple of 100 times sales it's quite reasonable well if you believe the eventual story I think a lot of the existing investors are excited that they're about to be worth a lot.

8:43Oh, yes. This will be for many funds, the biggest returns in those institutions histories. The New York Times reporting also that more than 4 ,400 current and former SpaceX employees are set to become millionaires. Yeah. Roughly 400 of those are expected to hit$100 million or more in equity from the company. So what's going to be interesting is once the lockup expires and how much go running for the exit, right? Yeah. I mean, there's different data that we can point to and people can draw their own conclusions. So at SpaceX, what they have done is... And just got about 40 seconds. Okay. Historically, they've let Cytos sell shares in a secondary, you know, just to give them liquidity, make money.

9:23But more recently, actually in the run-up to this IPO, you've seen evidence that the employees really wanted to hold onto those shares or get hold of more. Oh, interesting. Yeah. What's your number one question 20 seconds about all of this yeah boring ed what will capital expenditures be this year and next year because if you're raising 75 billion dollars you must need it for something you're listening to the bloomberg business week daily podcast catch us live weekday afternoons from two to five eastern listen on apple carplay and android auto with the bloomberg business app or watch us live on youtube we went to this affirm media breakfast for the buy now pay later company And there was a reporter there who was just asking over and over again about agents being able to buy stuff and pay later and to what extent a firm is planning to allow for agentic AI.

10:10Yeah. I mean, it's like all the rage. I don't have an AI agent yet. No. But we are hearing a lot about them. Raindrop is all in on AI agents. The firm has built a platform that monitors agents. We're joined by Ben Heilak, a co-founder and CTO of Raindrop. He's also a former SpaceX and Apple engineer. We're going to talk about that a little bit later. Ben, what is the problem that Raindrop is trying to solve? Look, very simply, I mean, you mentioned it even in the case of Robinhood. But what we're seeing is that agents are being deployed into increasingly high stake environments. So we're talking about like medical, finance, defense.

10:48And at the same time, they're kind of being given increasing capabilities, right? The ability to do more and more autonomously. And what we're seeing already is that these mistakes are going to be, in the best case, very, very expensive. And in some cases, either soon, if not already, these mistakes are going to be a lot more than just expensive. And so that's the problem that we solve. And we think of this a lot. We use this phrase, you know, humanity's last problem. But we really do kind of consider this to be humanity's last big problem to solve. You know, part of me also wonders, Ben, it's like, so we have AI, we've got, you know, LLMs, we've got agents, and then we've got things to fix the mistakes in agents.

11:36But like, is there an assumption at some point that there will not be any mistakes, that the data is so deep and wide that things are smart? Are there always going to be like we can't totally trust everything out of AI broadly? Well, this is really interesting, right? So if you think about, you know, humans, if you think about, you know, you're managing employees, employees do still make mistakes, right? But I think that there's sort of two separate things going on. And I think one thing that sort of gets lost in a lot of the dialogue, if you're not kind of in it every single day. So when you hear labs talk about improving models like Anthropic or OpenAI, what they're actually mostly talking about is, you know, increasing the capability ceiling.

12:23So having models solve, you know, new mathematical proofs or, you know, kind of like work autonomously longer, like these sort of things. What we really focus on is working with, you know, Fortune 100 companies on raising the floor. So what is the dumbest thing their agent can do? And again, this really matters when you're talking about, you know, writing prescriptions, which there are now AI agents that are authorized to write prescriptions in some states. Right. So raising the floor was the dumbest thing they can do. And the problem is that there's often no objective answer. So it's not the kind of thing you can just gather a ton of data for.

12:58It's like different people have different preferences, different states, different, you know, there's a lot of kind of a lot of criteria that defines right or wrong. How do you use agents in your life? Well, that's a very good question. So, you know, engineer by trade. So I think, like most engineers, have shifted to the point where I barely write code by hand. And every step of that software engineering process, there are agents involved, whether that's the writing it, planning it, communicating to other people, reviewing it. Every single step, there's agents involved. And then, obviously, as a co-founder of the company, we touch all sorts of things from marketing to sales, even legal.

13:41And, you know, there are agents being involved in every single one of those those pillars. What about outside of work? And the reason I ask is because a colleague of ours stopped by our desk just just before our program. I will not name him. You all know him. But he is talking about using agents for everything outside of work and talking about, in fact, actually recovering some money from tax authorities in a certain jurisdiction right now. Something the accountant wasn't able to do, but his wife was able to do using Claude Code. And it's really remarkable because that fight, you know, a human being didn't do that, but the AI agent wasn't was able to do it.

14:18How do you use it outside of work? 100 percent. So I think that, first of all, I think that we have not really seen the mainstream adoption yet. And I think a lot of it is because of these sort of failures, to be very clear, because in order for agents to be kind of maximally beneficial, you have to give it access to everything. It needs access to your email, needs access to your calendar, needs access to buy things on your behalf. And so there's very few people, and we saw this sort of with the open call wave where people sort of just give it access to everything. There were some kind of very catastrophic failures.

14:54As far as how I use it, often if I'm buying something, whether that's furniture, whether that's whatever it is, I will often have, or for example, planning a trip, I'll actually have, I use this agent called Devin, which is made by this company, Cognition. Oh, yeah. And it'll actually, if you've heard of it, it's really, really fantastic. Again, not used as much personally yet, but I will have it spin up, you know, dig, do a bunch of research and then actually generate a website. So I did this for a trip recently. It generated an entire website I could add as a little home icon to my screen. This was maybe five minutes total.

15:30This is the thing. I'm not talking about, you know, vibe coding for days or something. Five minutes of a map of all these different locations. Some I gave it, some I told it to find. you know, where my hotel was, what my schedule should be. And so that's the stuff that really, really excites me. I should note our Bloomberg news team reporting in February that the AI coder Devin has aimed to modernize government systems. And just a couple of weeks ago, Cognition did raise$1 billion at a$26 billion valuation. So that's the company that Ben's talking about. We're speaking with Ben Heilick, the co-founder and CTO of Raindrops.

16:04So is it a case, Ben, in terms of agents that we're just going to have a whole library of different agents that we're using in our life, some at work, some in like, or how does this play out? Or is it too early to know, kind of? it's one of the really big and very very important questions so for example um how do you separate that personal and work context is going to be a very very big question right because your employer is going to want visibility into how you're using agents right um how you're spending their money especially as you know again one of the trends we're seeing um increasingly so is that companies are they want to understand what they're paying for right like uh this sort of uh you know the last year, you know, this, uh, companies have been in this phase of just spending tens of thousands of dollars per month per employee, uh, on, on AI consumption.

16:54And, you know, there's roles like, you know, engineering where maybe that justifies it. There's other roles where it doesn't. So, um, anyway, uh, uh, I, I don't, I don't know, uh, is the answer. Um, I, my own personal vision is I think we'll see, um, we'll definitely start to see some, uh, uh, centralization around, you know, like specific agents that are the ones you want to trust with more and more of your context. And there will sort of be task specific agents that still exist. That's that's what I believe. All right. Fair enough. We already know we want you to come back soon because we want to talk more about this.

17:25But we would be remiss, especially in a week where we've got the SpaceX IPO on Friday, not asking you how you are thinking about this IPO and maybe what you can share with us about your experience there. Are you going to sell if you still have equity? Do you have it? No, I don't have any equity from back then. I think SpaceX is one of the most mission-driven companies I've ever experienced. And I think that that's one thing that really gets lost, I think, when people talk about it. Like the people, at least when, you know, I think it's a very different company than when I was there. When I was there, probably 3 ,000 employees.

18:02So I was like 2016. But one of the most mission-driven companies. What I mean is that when people go to work every single day, they think about, you know, at that time going to Mars. And I know that sounds crazy, probably to a lot of people that are listening, but that's really what people thought about every single day. So, you know, I know I'm not, you know, qualified to talk about valuations and all that sort of things, but. But Ben, I just, we only have a minute left. Again, we want you to come back. But the thing is, is that company in 2016 that was mission driven to go to Mars is very different than the SpaceX of 2026 that sees a$27 trillion total addressable market where a lot of that has to do with its XAI business.

18:41Yes. Yeah, that's the thing that I wouldn't be able to answer. That's the thing I wouldn't be able to answer. I think that what I will say is like, again, I'm not qualified to speak on any of this sort of stuff, but the cool thing about SpaceX is that it kind of has this infinite market cap, right? When you think of it as a space company, at least. And yeah, from there, I have no idea what comes next. Yeah, it's just kind of fascinating. Is there anything you can share in terms of Elon? Like we cover him so much. And as many have said, you know, never count Elon out. Any thoughts there? Just real quickly.

19:15I would not count Elon out. You know, I think he's a hard guy to bet against. I would never bet against him. You know, there's not that much I can say that hasn't already been said by someone, you know, someone else. What I will say is that, you know, I think people talk about it all the time, how involved he is in really not just a figure face, you know, figurehead of the company. He is involved in engineering decisions. And again, at least at that time, it's so long ago, but he really was in meetings and critiquing things. And that was something that was always very inspiring to me when I thought about founding our company.

19:49Stay with us. More from Bloomberg Businessweek Daily coming up after this.

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21:18That's public.com slash market. Add paid for by Public Holdings. Brokered 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 disclosures at public.com slash disclosures. Get the news you need in just 15 minutes. Start your day with Bloomberg Daybreak, the podcast with a global view on the stories that matter. I'm Nathan Hager. And I'm Karen Moscow. Join us each morning for curated stories on current events, politics, business, and foreign relations.

21:55Plus one conversation on the day's biggest developments all in just 15 minutes. Subscribe to Bloomberg Daybreak for a precise, thoughtful take on the stories that matter. Listen to Bloomberg Daybreak each morning on Apple, Spotify, or anywhere you listen. You're listening to the Bloomberg Business Week Daily Podcast. Catch us live weekday afternoons from 2 to 5 Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business App. Or watch us live on YouTube. Metals from aluminum to zinc dropped after tensions in the Middle East escalated. Expectations for U.S. rate hikes weighed on the demand outlook for commodities.

22:31We are doing a deep dive, as Carol mentioned, on mining. Two familiar voices and faces to our audience. Gary Evans is back with us, chairman and CEO of United States Antimony Corporation. It's a billion-dollar market cap miner, producer and seller of antimony products. Also with us, Paul Andre Hewitt, chairman and CEO of the$1.5 billion market cap precious metal miner based in Ontario, Canada, America's Gold and Silver Corporation. Shares down about 8 % year-to-date. U.S. antimony shares up about 36 % year-to-date. Good to have you both on the program. I want to—you were both back with us in February.

23:05It was the day that you two announced this plan to construct and operate a hydromet processing facility in Idaho. I know this stuff doesn't move at the speed of like software. Yeah. Can you give us an update on how that plan is going? Yeah. So we've since then, we've done a lot of work. We're doing a lot of the engineering work. Gary and I actually traveled to Bolivia together to go look at one completely operational plant, which was extremely useful for our team. His team as well. we're able to look at the best practices they're doing and we're going to be deploying a lot of those best practices in the engineering work we're we're submitting for our own plan so the our intent is still follow through with this jv have a fully domesticated line of antimony production here in the very near future that will last decades to come not and this isn't a flash in a pan where you go yeah i know this is going to be around for a couple quarters our intent is to have this new facility, state-of-the-art facility, that will be there for four or five decades, at least, minimum.

24:02So this is a big change here for the U.S. And we absolutely need this antimony. It's so desperately needed and required. Gary, you know about this, right? You guys have the only North America antimony processing facilities, right? It's out in Montana. Tell us about what's going on here. And I am curious that since we've had President Trump really focus on critical minerals, rare earths, and so on and so forth. I mean, is the momentum continuing? Is the demand? Like, tell us what's happening. Because it feels like we talked about this nonstop for a long time. And now it feels like we moved on to AI and some different things.

24:38Where are we? Well, obviously, with watching the Iranian situation, we're using up our military goods quite quickly. Is that tapping supplies? That's happening. So as the only antimony supplier to the U.S. government, we're a sole source contract, a$240 million contract. We see the purchase orders and we're delivering now to the government just started in May. And, you know, our year in our year revenues will be a hockey stick because we are we just announced two days ago our new smelter in Thompson Falls, which the government helped fund. Right. Twenty seven million dollars worth is about a 40 million dollar facility.

25:19Um, that we started firing up furnaces in May. We have five running now. We'll go to have full capacity by the end of the month, which will be nine furnaces. Nine furnaces. Correct. And so we have an existing plant already. And now we have the new plant. We decided to not refurbish the old plant because we want to get as much production as possible. So we know we see the demand from the government and we're trying to ramp up as quick. Have you gotten that$27 million fully? Of that 27, we've received 12. There's milestones. Every time these furnaces, that's a milestone. So we'll get the rest of it by the end of the year.

25:52Why is it so hard to get a furnace fired up? These are not off-the-shelf furnaces. We had to custom make them. And so there's parts, you know, everything. There's a little, this didn't work, this valve didn't work. So you're testing them over about a three-day period. Okay. I guess what I'm wondering, though, in general, and Paul, I want you to come back in here. I mean, like I said, there has been so much focus. We were often going to the White House, the Oval Office, for the president to talk about how important it was. He went to China, talked to President Xi. Is there anything that has come out and changed since we last talked that has shown, yep, still a priority?