SpaceX Is Said to Target $75 Billion in IPO at $135 Per Share

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2:04I think the schedule is for the SpaceX IPO roadshow to start tomorrow. I haven't seen a schedule, but that's what I'm hearing.

2:12Scarlet Fu:Yeah, but this IPO is kind of progressing unusually. Yes. It's so mammoth. And the company can kind of call the shots on everything. And our reporting shows that SpaceX is offering shares at one hundred thirty five dollars each. If it gets that, Elon Musk's net worth would be just shy of a trillion dollars. It put him at nine hundred eighty eight billion dollars. All right. Here's the problem. If you're an investor looking at this IPO, you don't have any research. There's no research from Wall Street except for Bloomberg Intelligence. George Ferguson joins us here. He's a senior aerospace analyst at Bloomberg Intelligence.

2:46He's got a monster primer research report on SpaceX. So if you have access to the Bloomberg terminal, you can find it there under the aerospace dashboard, BI Go. And it tells you everything you need to know about this company and how it stacks up relative to the cops and kind of the market opportunities and all that kind of stuff. That's the research. And you won't get street research for a while. So this is it on Global Wall Street. George joins us now. Now, George, what do you think the message is going to be from Elon and company regarding this company? Because, boy, it is an expansive company with an expansive vision.

3:25What do you think the message is going to be? Yeah, look, I think it's all about AI in the future and the optimal way to deliver it. Right. And so I think that the space business, the lift business, really supporting that satellite constellation Starlink, which is all about communications between the Earth's surface and low Earth orbit. I think that's interesting, but it's not, I think, a huge value proposition, right? You're trying to, you'll be competing with terrestrial providers that I think can do much better in populated centers. So I think the big, big, big sort of opportunity here would be if data centers are going to work in space and AI is a big thing in the world, you're going to be able to, from the surface of the Earth, shoot your data requests into space and data centers in space will work out all those things you need to know via AI and get it back to you.

4:17I think you're betting on that in the long run if you're buying into this, into the SpaceX IPO.

4:24Scarlet Fu:George, we talk about how your title is aerospace defense and airlines analysts. What kind of company is SpaceX now? What is the comparable company? What group should be considered a peer to? Yeah. So, I mean, when we built our valuation and thought about what was potentially, you know, plausible given current markets, we really had to do with some of the parts, right? So I went out and looked at the rocket business against those peers like Rocket Lab. My colleagues, John Butler, went out and looked at Starlink based on some peers as well and then Mandeep Singh did it based on AI. The biggest value that actually came out of Rocket Lab, sorry, came out of the rocket business which is a little bit surprising to me and but I still think sort of the you know the long-term play here is the data center in space and AI.

5:18So but we had to combine again analysis and all those industries to really come up with what we thought maybe a plausible valuation, albeit extremely lofty valuation would be. Is there an expectation, George, that Elon may look to just kind of consolidate all of his holdings within SpaceX, i.e. roll up Tesla into SpaceX? Is that something that when you talk to investors that they think is possible, likely? I hear noise like that. I mean, look, I think, you know when i look at the current spacex i see i see the reason to put these three companies together again sort of the launch business gets your satellite constellations up in the air he's got the largest satellite constellation starlink by far is the largest of any satellite constellation low earth orbit so the launch business gets those satellites up there uh it serves starlink and then and then again as ai uh comes in if you're going to put the data centers in space you've got to drive down the cost of getting things into orbit.

6:21And again, your launch business matters. And you obviously need communications to get to it. So I see how all three of those fit together. I don't see how Tesla fits inside that mold. Now look, I think all three of these are together because AI needs a fair amount of financing right now. We're seeing that all around the marketplace, right? AI companies are looking to raise funds, to build data centers, build out their models, make sure they're super competitive. So look, I think Elon could do, you could see him do things for financing reasons that may not make sense from a company level reason.

7:01Again, right now, I see the reason these three are together because they seem to be supporting each other.

7:06Scarlet Fu:So George, when SpaceX is a publicly traded company listed on the NASDAQ under the ticker SPCX, and it needs more money to fund its AI build out, how's it going to get that money? Is it going to sell more stock? Is it going to go to the debt market? What are you thinking? Well, I mean, right now they're not selling all the stock. You know, they're not listing sort of the full value of this company on the exchanges. But so my sense is they probably could sell more stock to raise money. And then I think it just, you know, it opens up the ability to go into public markets and take public debt and sort of, I guess, maybe get out of the venture capital world a little bit.

7:50But look, I mean, I guess we'll see. It still seems like a really hard—it's not a company that you're going to bank, right? The major banks of the world aren't going to show up and say, we'd like to finance you. The metrics just aren't there for that. Some very speculative bond investors could potentially get involved. It still feels like largely an equity fundraising kind of story to me.

8:15Scarlet Fu:Stay with us. More from Bloomberg Intelligence coming up after this. at Brookfield you can own wealth that's measured in generations for 125 years we've built long-term wealth through expertise discipline and a clear vision for the future providing investors access to alternative strategies built for what's next Brookfield own what's next learn more at brookfield.com this is not an offer to sell or investment advice investing involves risks including loss of capital 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.

8:57One 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 &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 build 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 slash market and earn an uncapped 1 % bonus when you transfer your portfolio.

9:35That's public.com slash market.

9:55Scarlet Fu:If your best finance people are doing expense reports, chasing receipts, or spending time on month-end close, it's time to get Brex AF, a gentic finance that eliminates that work before it starts. Learn more at brex.com slash AF. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10 a.m. 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. We continue to look for details on this gigantic IPO coming out from SpaceX. The latest reporting indicates that the company plans to offer shares at$135 a piece.

10:38Scarlet Fu:It wants to raise $75 billion in its IPO. And, you know, the fact that it's kind of pinpointed a price already makes it different than your typical IPO, where companies announce a price range as they get ready to market the shares during these investor roadshows. Let's bring in Gautam Mukunda. He is a lecturer at the Yale School of Management. He's also a contributor to Bloomberg Opinion. And he's written about governance at SpaceX, or perhaps lack of governance at SpaceX. And Gautam, I want to start with this idea that SpaceX's IPO is shaping it to be kind of a departure from the norm. And you say that that's the case with its governance as well.

11:15Scarlet Fu:What have you spotted in the paperwork that is filed that really shows its defying convention? They basically surrounded Elon Musk with rights and privileges and special voting shares and rules and things like that, that make him, you know, the phrase I use in the column was he's now the god king of SpaceX. Like No one in the organization has any ability to put a break on him. No shareholder has any ability to put a break on him. A lot of CEOs have been doing a lot to concentrate power in their own hands, but I don't think I've ever seen anything quite like this. Gotham, it kind of makes sense.

11:49My guess, if I were an investor taking a meeting here for this IPO, all I want to hear is from Elon Musk and what his vision is and how he thinks he can get there and achieve profitability. I don't care what the CFO says. I don't care what anybody else says. I just need to dial in on Elon because it's a bet on Elon. Maybe that's now reflected in the governance. No, I think that's right. And look, if you are a major institutional investor and you decide to go in on SpaceX, you do it because you are bought in on the story of Elon Musk. And you might have lots of reasons to buy in on that. You might have made a lot of money on him.

12:20There are two problems with that logic. And it's important to highlight both of them. The first one is a lot of the people who are investing in SpaceX are not people who are buying into the story of Elon Musk. their index fund, people who hold index funds, people in their 401ks, who are just going in because it's in the index and because all of these institutions from, you know, including NASDAQ, that are supposed to put boundaries and guardrails and protect investors like that, investors who, because they're in index funds, literally cannot protect themselves. All of them have fallen down on the job and decided that they're not going to do that.

12:55So that's the first problem. But the second problem, which is just as important, which is however brilliant you think Elon Musk is, even if you think he is the greatest business person who's ever lived, there's no such thing as a person who is so brilliant they don't get better when other people test and push their ideas. And this is a structure that's designed to make sure that no one has the ability to force Elon Musk to be the best version of himself and not the worst one.

13:21Scarlet Fu:Well, I mean, SpaceX is not unusual in that it's giving its leader a free hand. You point this out that Google's 2004 IPO kind of codified this dual class shares into the tech industry meta, or then Facebook did something similar. So in that way, this is a tried and true formula for big tech companies. Yes and no. There's a great phrase in medicine that's worth remembering here, the dose makes the poison. A lot of companies did this. They created these dual class structures. They did a lot of things because the financial markets and sort of pressure from Wall Street had made it impossible for them to manage companies for the long term.

14:01They realized that that was toxic. They looked, say, at Boeing and said, we don't want to be Boeing. We don't want to be GE. We want to be a company that actually creates value over the long term. And so they They created these structures to allow that to happen. That was the problem. We have now taken this to the point where the solution looks, in a very great sense, to be much worse than the problem. So 30 seconds left, Gautam. The index issue, how serious is that for investors, do you think? I think it's an assault. So in this particular stock, it is not devastating, although it's not good.

14:37What was very serious for investors is it is an assault on the integrity of the capital markets. It's the guarantee that you will be treated fairly, that this is not just a way for insiders to extract money from index investors and from people from people who are not who are not, you know, sort of as sophisticated as they are. Right now, this is structured as a transfer of wealth from like investors to early stage space holders. That's wrong. And it's that it is it is really a frontal assault on the thing, one of the pillars of American capitalism that has made it so successful.

15:11Scarlet Fu: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 &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.

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16:27Scarlet Fu:Ask yourself, what are your best people spending their time on right now? Expense reports, receipt chasing, month-end close that takes weeks. You become what you spend on, and that's not what you're building toward. Brex is the intelligent finance platform that eliminates that work before it starts. AI agents that handle the manual stuff automatically, so your team can spend their time on what actually compounds. It's time to get Brex AF. Learn more at brex.com slash AF. Ryan Reynolds here from Mint Mobile, with a message for everyone paying big wireless way too much. please for the love of everything good in this world stop with mint you can get premium wireless for just 15 a month of course if you enjoy overpaying no judgments but that's weird okay one judgment anyway give it a try at mintmobile.com slash switch up front payment of 45 for three-month plan equivalent to 15 per month required intro rate first three months only then full price plan options available taxes and fees extra see full terms at mintmobile.com you're listening to the bloomberg intelligence podcast catch us live weekdays at 10 a.m 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 let me take you all the way back to the summer of 1991 i was in the chase manhattan bank summer that credit training program and we were assigned a company to do a full credit report on and do a presentation that company for me was medtronic medical device maker.

17:58So I followed the company kind of ever since because when you put in a ton of work on a company, it tends to stick in your brain. Other folks cover the stock as well. They reported some numbers. I thought they looked pretty decent to me. The stock is up 5 % today, but it's down about 19 % year to date. This is one of the leading medical device makers out there. So let's pay attention to what's happening there. Matt Hendrickson does. He's a senior echoed analyst at Bloomberg Intelligence joining us live here in our studio here. Matt, talk to us about Medtronic. What did you hear from them in their earnings release?

18:23Yeah, I mean, so going in ahead of the call, the question was for one of their key technologies, whether it was a market slowdown or a competitive dynamic. The previous company reporting, Boston Scientific, talked about slowdown, turned into what was going to happen when Medtronic reported. They reported very positive, 124 % growth in this one segment, eased a lot of concern ahead of the call. That's why you're seeing the bump this morning. And so turning into their fiscal 2027 guidance shows signs of upside in the future because of that momentum in that segment. A medical device maker like Medtronic, how much are they impacted by healthcare policy out there?

19:06It seems like it's such a, hey, you guys have to figure out what the earnings are going to be and all that kind of stuff. But you also have to have an opinion on kind of how policy is going to unveil over the next several years yeah it's it's it's it's tough it's always a labyrinth it's a black box what's going on in cms and the fda um med tech is a little bit less impacted by it you're going to have procedure volumes you have the aging demographic they're going to have knee procedures done they're going to have heart surgery done things like that um recently it's more been the glps um and so i remember two three years ago when glps first came out everyone thought med tech was dead they were able to maintain procedure volumes now with the rise of oral glps that is kind of coming back so what's the thinking there what's the the thesis um basically it's easier to take a glp orally um as a pill versus uh injecting yourself therefore all need fewer knee replacements there's there's there's data out there that's showing that it's health it aids with cardiovascular cases um things like um you know healthier knees things like that so less procedures there um what we saw in 2024 2025 is that cases were steady throughout the whole if not growing interesting um but once again we're getting into that new case of uncertainty going on i was talking to buddy mine he's a doctor that fixes knees and ankles and stuff like that he says pickleball has been a boon to his business his office is packed with people my age coming in with torn up knees and ankles because they were playing pickleball you're not the first one to say that because i mean think about it they're just so they're so eager to get out there and they forget that they're in their 60s and 70s and next thing you know crack and then got to get to the surgeon so who does medtronic compete against in their business so well medtronic is very diversified and so we can talk about the cardiovascular space the spine space neuroscience um for particular this case pulse field ablation um which was not there in 1991 yeah it's a it's a new technology for cardiac ablation.

21:07The two main competitors is Boston Scientific and Medtronic. And it turned into that question when Boston reported growth numbers that were lower than expected, what was going to happen to Medtronic. And so today was a kind of a clear that hurdle at least. Do these medical device companies like Medtronic? Are they aggressive on the acquisition front? Is that a growth driver for them? Because I always joke with Sam Fazelli, his pharma companies, every Monday morning we wake up, there's another pharma deal. It's a huge way for them to drive that innovation. Basically, they acquire the innovation to be able to maintain their revenue growth trajectory in the future.

21:44So it's huge. The difference that we're starting to see in medtech side versus the pharma side is that they're targeting the private companies earlier in their series financing before they become publicly traded. While Sam was probably talking about a lot of the publicly traded companies that have been acquired over the last few months. So what's the call on Medtronic here? I'm just looking at the ANR function on the Bloomberg terminal. It's kind of streets kind of split here. I got 17 buys, but 14 holds here. So what's kind of the, is there something the streets looking for to say, okay, I can jump on board here?

22:19I think people are waiting for, it's always been an execution story for Medtronic and it's always been kind of Lucy pulling the football from you and they would have one or two great quarters. they always talked about the great innovation and the innovation always has been promising for you know whether it's pulse field ablation there's a few other ones that we can go into the nitty gritties of at another time but all this technology that is disrupting the standard of care but for whatever reason the sales team or just the execution wasn't there so they would always have to revise something after the third quarter and then things would then retrace from those kind of momentum that they had earlier um it's kind of so basically there is that a little bit of i don't want there's some that i don't want to try to kick the football for lucy just to pull it from me yep um and so they've had a bunch of good quarters it's going into they know they issued fiscal 2027 guidance that's showing that momentum from fiscal 2026 um a lot of it has to do with the pulse field ablation segment of their business that's showing some strong momentum so we'll see what happens come August with the fiscal first quarter calls coming out.

23:25Scarlet Fu: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 &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.

24:04But on public, you just type in a prompt and their AI screens thousands of stocks and build 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 slash market and earn an uncapped 1 % bonus when you transfer your portfolio. That's public.com slash market.

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