SpaceX To Target $75B in IPO at $135 Per Share

24:46Take a listen. And it also is very competitive. There's hundreds of different managers out there. I remember when I started at Makai Shields, we were 89 out of 91. And within three years, I was very proud we got to be number one. But that's a lot of people to compete against. And you get your scoreboard every day. But more importantly, strategically, there was the mindset of why do people buy? Why do they sell? And can you front run that? Can you predict if the premise, if you're thinking of investments as maybe as short movies, and how's a movie going to end? And if your premise is that this happens and this happens, who am I going to sell it to and where are they going to buy it?

25:39And so part of that could be liquidity. Part of it can be the stats. Why isn't somebody going to buy the four times levered software company that's growing at 11 %? Sure, they're going to be upset that they didn't buy it at 20%, but it was five and a quarter or five and a half times leveraged back then. and the mindset was different. So I think that, and if that looks attractive, for instance, just using an example to what else is in the market that's yielding 10 % or 9%, there's going to be enough takers in that. So having that mindset's always been attractive and helpful. There's also the, you look at something like COVID, and okay, how are people going to behave?

26:25There was usually, I remember, in mutual funds that when people got redeemed, they would sell what they could sell quickest or what was most liquid. I always tried to sell my semi-liquid product because I know I could never sell it in another week if this continued. So there's just different strategies to think about. So if you fast forward to now, at Golden Tree Asset Management, how do you perceive the mentality right now in the masses or in the funds that you go up against? Sure. So there was a bigger question we were talking just a few moments ago about the perspective on credit, particularly total return credit.

27:06And there's probably frustration because some other asset equities are participating significantly in credit, broadly speaking, is in the low single digits. So there's frustration and anxiousness. How do I how do I capture returns against that backdrop? You have great current yields. and still value when you subtract out versus defaults that justify being in credit. Just to have everybody participate, this is a great time to bring in our question, which is how you're positioned in credit for the remainder of this year. And I would love for you all to weigh in, defensive, neutral, or risk on. From your perspective, how are you positioned?

27:53I mean, right now, do you want to take more risk? Are you looking for yield, or are you looking for defense ahead of greater opportunities? So when we spoke in January at Davos, I mentioned how the setup was poor for credit and good for equities. Historically, when you've had stretch valuations in a mid-cycle where the economy is expected to grow at 2 % or better, your returns in credit are less than the coupon. And that's exactly what's happened so far. In contrast, usually that's a great environment for equities, and that's what's happened. And even if you look at the equal weight at S &P, it's certainly beginning to catch on.

28:35So it's been a more broader rally, particularly the last few weeks, even in the face of Iran on again, off again conversations. Credit has still been, is still languished. And we expect that to continue. Now, that's not to say that it can't have a better second half, but I do think there's some pockets of opportunity. But this is historically a tough time to be in credit in terms of in the cycle. Because of inflation and growth, that doesn't really benefit the instruments. It's just how it's priced. It's price as if defaults are going to be low and that the corporate earnings are going to, and that they're more likely to disappoint.

29:22You're not getting paid to increase corporate earnings or for earnings to surprise on the upside. And you're being heavily penalized if they surprise on the downside. In the equity market, there's still some acceptance or excitement if you're taking up numbers. There are some opportunities, like you said. Where's the distress? Where are you finding them right now? So it's very situational. There's the expected distress, which is in software, where the business model is getting called into question. Then there is also in telecom, another business model that's getting called into question. And there is an interesting relationship between the public equity.

30:06As you look at a Comcast, I think that's hitting a new low as we speak. a 52-week low, if not, it's certainly close to that. Charter's probably in the same camp, Cable 1 in the same camp. But yet some of the debt isn't. So I think that's kind of an interesting relationship. The debt and what happened, I guess, recently with Altice with threatening a transaction, I think it's all a ploy for negotiation, but it probably brings people to the table sooner, if it works. It's the same team that brought you Ballish, and we respect them an awful lot. But it kind of went nowhere when there was a bunch of, I guess, potential transactions being contemplated that didn't get to the finish line from the equity.

30:52So playing the debt equity structure in creative ways is one way that you're playing with it. Right, and within industries. I think the equity in cable is much easier. it's hard to see that the equities don't work, or excuse me, don't work, and the debt works. So I think that relationship is kind of interesting. I'd say the same thing in healthcare, which seems like it's been a source of funding for technology stocks. And there are certain companies like Tenet, which strike me as very reasonable value. Sure, there has been some volume issues, but the valuation seemed very credible. top-notch management team.

31:30And I think the equity market, excuse me, the credit markets would finance the entire market cap. More broadly, you started by talking about the frustration felt by a number of credit fund managers because right now, this isn't an asset class that tends to work that well or give that many, that give outsized returns given the scenario we're in. And yet people are pouring trillions of dollars into AI infrastructure. Does that worry you, excite you for the potential down the line? Well, when you look at, the devil's in the details in terms of what the terms are. But when you look at who's backstopping it, they seem like good credits.

32:10And people tend to think of two and three years out, not five or ten years out. And it looks like for two to three years out, you're getting overcompensated for the risk. On the other hand, you're dealing with terrible technicals. They don't seem to run out of product. and I think even this Google financing is suggesting that they want to make sure to be out in front of the financing in terms of the equity. And there's almost, or not almost, there is an arms race going on. And the issue is, will the infrastructure investment be justified or will this be more like underwater cable, which was a good thing until it wasn't.

32:50Do you have a take on that? Are you embedding a sort of thesis into your investments? I'm somewhat agnostic, but history would have a bad record in terms of overinvestment for industries that have very high payouts. Whether it's riverboat gambling to something like undersea cable. So, you know, it's not a great precedent, but there's... It's not a great precedent, but there's an argument that, you know, I understand the arguments now, and I think our view is to be very deliberate to have additional assurances by the users that they're committed to these projects. Would you rather invest in the high yield part or the investment grade part with the all-in backdrop, the idea that it tends to be lower duration, shorter maturity in the high yield, but higher risk, investment grade, longer duration, but tied to very risk?

33:49So my guess is at different points in this funding, you're going to get high yield type of spreads in the investment grade market. So the issue is, you know, what you do in between them. So I think it depends, you know, on the pricing. But I think you'll get at least every other stretched or overfinanced industry I've been part of, you usually have been able to get excellent protection. with below investment grade pricing at some point. So now what do you do in between there is the issue. But it's going to get there at some point. So you just dance and cable and pick up some distressed software and wait to invest in this area until it falls out of bed?

34:36No, no, because if it's two or three years, that's a lot of return to give up. But to be deliberate about what you're getting versus the opportunity of what you might be getting. And, you know, at least I'm incredibly fickle on these topics. So I could, you know, in a month or two, could just have a different perspective with more evidence. How do you remain nimble at a time when you're going in and out of sometimes less liquid instruments? First is you've got to assume you can't be nimble in less liquid instruments. And lower prices brings in illiquidity. Higher prices brings in confidence. So that's kind of the way the credit markets work.

35:17just trying to ask as many questions and focus on what we think are the key variables. In something like AI, you can be overwhelmed by so much. So to try and look at some of the larger issues and just focus on that and be deliberate. Because there's so much supply, the idea of you're going to run out of opportunities isn't a real, that's not realistic. there's going to be something to do in this space, particularly as it continues to be successful. Right now, would you rather be in public securities or private securities, just as a rule, I mean, in terms of the interest, the demand? So when we look at asset classes, probably the asset back to asset class, we find the best value, which is a private asset class.

36:06So we're finding good value there. In private credit, there's some of the more anxious capital, the open-ended private credit funds. are out of the market. So that leaves the funds and other players in private credit who are more deliberate being the main buyers of private credit. So we're seeing good value there. We're seeing good value in some of the out-of-favor sectors, which is always the case. I mean, by definition, out-of-favor sectors are at discounts. So I'd say it's eclectic, but we certainly are seeing better value in private credit today than we've seen in the last 24 to 36 months.

36:45Are you getting paid for the illiquidity premium? That's always after the fact comment. But it seems like you're getting better paid. In the absolute, when I think of things, I think it's, if I were to say out of 10, maybe a six, you know, six and a half. So it's above average, but not by much. Right now, we're looking out for a year where a lot of people keep talking about inflation and inflationary risks. and this is one of the reasons why credit hasn't been as much of a sweet spot. How do you price that in? I mean, at what point do you just start to increase the sleeve of equities and create some protection on the downside and kind of hope for the best with a couple of security selections?

37:32Inflation is probably the biggest risk in the market. And it's impacted because it's impacted rates much more credit than it has equities, which I'm surprised at, but it just is what it is. And if you look in the 70s, equities did better than credit. So if you're looking at a bad environment, at least that's one example where equity outperformed credit. It's very much data dependent. It's also what's going to happen with the war. You know, if you look at one of the big surprises so far this year is oil has been relatively calm in relative to what expectations. Most people thought if you got past Memorial Day, it would be 125, 135.

38:21But yet we're in the mid 90s. So I think it's, you know, that's a factor that seems to, you know, be developing. So it's hard to draw a line in the sand on that. This is cognitive dissonance every single morning. We talked to a lot of people, and we were speaking with Mike Worth of Chevron the other day, and he said, we're going to end up with shortages. If this keeps going, in the next couple of weeks, we could start seeing shortages in the United States. Diesel inventories are at the lowest level since 2003. And then you get an equity strategist on, a credit strategist on, we're not looking at that.

38:58That doesn't matter. How do you think about that? So I've kind of processed it a little different is how are equities pricing this? And equities seem to not be pricing the futures curve. So on the strip curve, it's just so oil service. Sure, Halliburton's having an excellent year. But when I look at some of the mid caps, very much pricing in, I'd say,$70,$75 oil. And when we see the M &A market in oil services, and we have a company that we own more than half of that looks at the M &A market and has bought a few companies in the past 12 months, and that market hasn't changed that much. So in terms of levels and pricings and multiples and expectations, so we see the, regardless of what people are saying, how they're voting with their feet, they're still very cynical of how long this will last.

39:54And that's probably, it seems like a better opportunity that it's going to be higher for longer than what's in the market. So in other words, buy mid-cap oil names. Yeah, and suppliers. But also, when you're thinking about oil as an input to your companies, and I'm thinking as a portfolio manager, okay, what should we be assuming in terms of whether it's in building material products and which oil can be an important input? You know, what does it mean for inflation, et cetera? my guess is going to be higher for longer. I want to pull up the results of the poll, and unfortunately we didn't have an answer to the poll of just frustrating.

40:32But the answer was, how are you positioning credit for the rest of 2026? Not for ultimate frustration, but neutral, 42%, defensive, 31%. Risk on, 27%. Does that surprise you? So I look at it as almost 75%, 73 % of people who are like, Yeah. What else can you say? Yeah. And so, you know, it seems about fair. What's a strategy that's been very popular this year in terms of inflows is opportunistic credit. Having a long playbook and instead of a distress manager, a private credit manager, how about a manager who can look for the best opportunities with a long playbook? So that strategy has been gaining a lot of traction.

41:21I think the positioning and credit in terms of getting alpha and dispersion is that's not surprising with the results here. You've been in the business for decades. You've seen a lot of cycles. You were talking earlier about the 70s. I hope that's not the analog. But is there an analog to the moment that we're in right now that you can think of in terms of investing, in terms of the macroeconomic backdrop? So we're mid-cycle in a stretched environment. where it's very narrow for what the opportunities are. That's like most markets I've been in. It doesn't feel like most markets for most people.

42:03But if you were to go back and count, stretch valuations, very little dispersion except for a certain percentage of the market, call it less than 20 % of the market, that's kind of most markets. I bet it's three-quarters of the market is what that is. It's certainly more than half. So you think that the analog is almost every time except for the big extremes? Well, I think that what's different this time, because every cycle has something that's different, and what's different this time is the AI expense and what the ramifications of who the winners and losers are. And you could have said that with media, with the Internet.

42:43and who's going to be, when I think of software and try and conceptualize who the winners and losers are, I look at legacy media. And there was TV, which went from, call it nominal growth to less than nominal growth, but still growth. You look at cable programmers who still had above nominal growth for about 15 years. So those were healthy businesses. You had radio that, call it by 2008 or 2009, seemed to really be a more marginal product, and then by the late teens, really in trouble. And then you had newspapers, which really peaked about, I'm trying to think of the Tribune transaction of 2006, 2007, and I think 2005.

43:31So after 2005, really began to be disintermediated. So where does some of these industries fall with that methodology? Fascinating. And everyone wants to be, not radio. Although radio is coming back with podcasts, so there's that. Although it's not on the band, right? So when you're thinking about radio, as I grew up with it, it was AM, FM, and really FM for the most part. Although I think I remember being invested, the largest creditor in MS, which was WFAN on the AM band. But it was, but that's a different, it's a different medium for radio. Yeah, different distribution mechanism. Stephen Tannenbaum, always a clinic, always wonderful to speak with you.

44:18Stephen Tannenbaum of Golden Tree Asset Management. Thank you. That was awesome. You're so good. Here. That was Steve Tannenbaum, Golden Tree Asset Management founder and CIO speaking with her own Lisa Abramovitz. Hello. Welcome back to Bloomberg Tech. This is what financial markets look like, zeroed in on the tech sector. There is a lot in the market to do with the move in oil. There is some concern about the current state of affairs and the relationship between the U.S. and Iran and what that means for peace talks. Broadly, we're a little softer to flat on the Nasdaq 100. You know, that's our go-to tech-heavy index, but continued outperformance in chip stocks.

44:53And we've given you that story throughout the hour. We're going to get a lot more on it in just a moment's time. Bitcoin at$66 ,000 per token, down 2%, but, you know, kind of risk off. And then there was that big number, Alphabet boosting its equity offering to$84.75 billion, a little bit of dilution going on, maybe down six-tenths of 1%. OK, markets are fun. What else is going on, Karen? Maybe politics is fun in certain places. Right here in California, several tech-favored candidates. They delivered actually a poor showing in California's primary elections just yesterday. The results are still being tallied.

45:25But so far, the big bucks spent by Silicon Valley billionaires and founders, they haven't resulted in wide-ranging wins for their favorite candidates. Bloomberg's California reporter, Eliyahu Kamisha, is here with us. And Eliyahu, why? Why has money not worked? That's a good question. I think we're seeing that a lot of this frustration in Silicon Valley has been concentrated amongst a very small group of tech elite, and it didn't really translate to the voter base. So they spent a lot of money on Matt Mahan, the moderate San Jose mayor. And there was a lot of enthusiasm on X for him. A lot of venture capitalists, big names like Mike Moritz, Sergey Brin came in behind him.

46:10But was he promising like no billionaire tax basically? That was one of his promises. He was against the billionaire tax. He wanted to kind of do a more back to basics, smaller government, you know, kind of less taxation and a little less regulation, a little more friendly to tech. And I think, you know, we've seen that there's a lot of actually frustration with Silicon Valley in California and these leaders who are making a lot of money in the tech boom and they're feeling very confident. It's actually not translating to the ballot box right now. If you're watching Bloomberg Tech from outside of California, we're talking about the gubernatorial primary, the race for governor.

46:51And the first instance of that has been in GON. The top two will go to the general election in November. Just where do we stand? You know, who is likely to go through on that? And always on this show, give us the tech angle of whoever does go through. Yeah. So there's three candidates that are at the top. There's Javier Becerra, Joe Biden's former health secretary, Steve Hilton, who is a Republican former Fox News commentator, and then Tom Steyer, who is a liberal former hedge fund billionaire. And right now it looks like Javier and Hilton are going to go to the runoff, although ballots are still being counted.

47:29And Tom could make a late run depending on, you know, to be determined. I think what the tech angle is Javier has kind of started to coalesce some of the establishment democratic interests and also a little bit of the tech money. So when he started surging as a late stage favorite, you saw Meta and you saw Airbnb come in for him. Interesting. And they're kind of late in the stage, they acknowledge that he's going to be the front runner and they're trying to kind of pick a winning horse. Bloomberg's Ellie Cameron show on tech and politics and what's happening in this election cycle here in California.

48:06GitHub is betting big on AI agents, launching a new GitHub co-pilot desktop app while racing to keep up with surging demand. I sat down with Microsoft's EVP of CoreAI, Jay Parikh, to discuss GitHub's growth, its efforts to improve reliability, and what comes next. Listen to this. For us, it is one where GitHub continues to get lots of help from the rest of Microsoft, right? So we have, even in just the year and a half I've been at Microsoft, we have brought in really great talent from other parts of the company to help us build products, to help us scale, to help GitHub be more secure, to build those enterprise features, right?

48:48The backstory was the outages, security issues, and then there was a change or departure of leadership. And you're describing what's happened since. So, you know, we should start with the fact that since the beginning of the year, the amount of traffic that has come to GitHub has gone up significantly, right? So last year, we had about a billion commits that we processed in all of 2025. Now we process about 300 million commits each week. So traffic has gone up pretty significantly. And we're very committed to improve the availability, the performance of the platform. we're getting help from more of the Microsoft engineers and the top talent that we have.

49:28We're attracting new talent to the team. We're bringing in more capacity to scale. And we're re-architecting these systems. But, you know, I feel really good about the path that we're on. Could you just give us a real-time view of how much work is being done, real work by an agent, and where you see that going over the next 12 months and beyond? And I think we're just at the start of this. This is early. Because it's early, but it is amazing to see how people are translating these ideas into these use cases and building these platforms, right? And lots of use cases, even internally, where teams are building agents to continually improve their product.

50:09Even when they're sleeping, you know, on the weekends, these agents are running and then analyzing all sorts of different telemetry to find ways to then make suggestions for the engineers, for the product folks. when they wake up in the morning to how to improve the systems, right? And this is technology that works today. You need that observability as you keyed on earlier. You need that human in the loop to make sure that things stay on track and that it is doing what you expect it to and prioritizing it correctly. It's early, but it is going to be, I think, a really, really quick ramp, and it's exciting that we're seeing this.

50:45And, you know, the team's super energized to be working closely with our customers to be iterating on these platforms, on these technologies. Microsoft's EVP of Core AI, Jay Parikh there with Ed. Coming up, all eyes on Broadcom as they get set to report after the closing bell what earnings can tell us about the AI trade. Shares higher. This is a blue black tech. 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.

51:23It 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.

51:59That's public.com slash market.

52:12Sample prompts are for illustrative purposes only, not investment advice. All investing involves risk of loss. See complete disclosures at public.com slash disclosures. Running a small business takes everything you've got. But with Chase for Business, you're not alone. They bring together local support and a broad range of resources to more than 7 million customers. With a deep understanding of your day-to-day needs, they provide products and guidance built to help you thrive. Right now, earn$500 when you open a new Chase Business Complete Checking account for new business checking customers with qualifying activities.

52:43Offer expires June 18th, 2026. Chase Business Complete Checking has the flexible tools you need to accept payments, make deposits, and manage your finances with confidence. Learn more at chase.com slash podcast biz offer. Chase, make more of what's yours. These may apply to Chase Business Complete Checking accounts. The$500 offer is available for new business checking accounts with qualifying activities through June 18, 2026. Eligibility and qualification requirements must be met. Additional restrictions may apply. Please speak with a business banker for more information. JPMorgan Chase Bank, N.A., member FDIC.

53:20Whether you're planning a big tech event, launching a new campaign, or just stocking up on team gear, finding the right promotional products makes all the difference. 4imprint offers thousands of options. from on-trend apparel and premium drinkware to tech, totes, and giveaways, so you can find the right fit for any audience, purpose, or budget. You can customize it all, your logo, your message, your look, and many items come with no setup charge to help you save. And if you're really watching the bottom line, you'll find standout choices at every price point so you can make a real impact while staying on budget.

53:53Plus, you'll get expert help, fast turnaround times, and their 360-degree guarantee, so you can be 4imprint certain your order will arrive on time and look exactly right. Whatever your goal, 4imprint makes it easy to find your perfect promo match. Explore the possibilities today at 4imprint.com. 4imprint. 4certain. The next trillion-dollar company, ladies and gentlemen. Whoa! That would be exciting. Let's do it together. Let's do it together. Vivia CEO Jensen Wang alongside Marvell CEO Matt Murphy over in Taiwan at Computex. That was yesterday. And look, Shesem Hover continuing to run high. Look at that move over three trading days.

54:37Look, we are getting closer to potential$1 trillion, as Jensen was just talking about. For more, for most, Dina Bass joins us now. It's the power of the$5 trillion giant in the room to anoint the next$1 trillion. But is there real fundamentals behind it, Dina? It's we're, I think, waiting to see, you know, what Broadcom reports today, Marvell's made competitor, but also Marvell, you know, and Broadcom are basically competing for the business around custom AI accelerators that aren't NVIDIA. Now, Jensen is not objective when he, so to speak, anoints Marvell in that manner. Marvell is the horse that NVIDIA has backed in that space.

55:15They've invested. And he wants to set them up as an even stronger competitor to Broadcom because Broadcom itself has been positioned and has positioned itself as the alternative to NVIDIA if you don't want to use NVIDIA's GPUs. Right. And Broadcom is now a$2.3 trillion company as a result. This is an important earnings print. Explain why it's important, but also why Broadcom is a genuine competitor to NVIDIA. So the vast majority of the AI chips that are used are NVIDIA's GPUs. The alternatives increasingly are coming from some of the hyperscalers and the large frontier labs that are making their own custom chips.

55:57And Broadcom has several of the biggest customers there. We talk a lot on this show in the past few months about Google's TPU. That's made with Broadcom. Anthropic is buying a bunch of those and paying Broadcom for them. Meta works with Broadcom. And those three companies have signed extended long-term deals with Broadcom in the last few months. They already had deals and they expanded them. And so what we're seeing from Broadcom is, according to Bloomberg Intelligence Analysts, a better visibility of what the long-term picture looks like for that pipeline. That's been something I think investors have been a little bit concerned about.

56:34What is the long-term pipeline? When do these contracts come online? And if they're multi-year contracts, what is the amount of revenue that Broadcom is going to be able to get from each of them in each quarter? How does that kind of play out? But there is now greater visibility. Bloomberg's Dina Bass with the Broadcom preview. And stay with Bloomberg Tech tomorrow. We're live from the Bloomberg Tech conference. Hock Tan, Broadcom president and CEO, joins us. This is just pure timing, Caro. earnings after the bell conversation tomorrow what a phenomenal executive discussion to be having Tom Giles our executive editor is going to be leading that conversation what an array of people we're going to be speaking to throughout the day I mean you're going to be speaking with Andrew chair and of course big player over at Founders Fund I'm going to be talking to San Francisco Fed President we've got a lot to digest tomorrow and it's a big show it was a good show today so recap it you know where on the podcast and you can find it online Spotify iHeart and on Apple and then of course on all the Bloomberg platforms.

57:32This is Bloomberg Tech. Dog grooming genius here. Most people see a busy dog salon, but I see operational excellence. Thanks to genius from Global Payments. Scheduling, personalized. Checkouts, instant. Absolutely genius. From game day crowds to every groomer in this shop, genius keeps everything flowing seamlessly. Schnauzer is styled. Flawless execution. Big League reliability for any business. That's genius. 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.

58:17Brex 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. I don't know if you knew this, but anyone can get the same premium wireless for$15 a month plan that I've been enjoying. It's not just for celebrities. So do like I did and have one of your assistant's assistants switch you to Mint Mobile today. I'm told it's super easy to do at mintmobile.com slash switch.

58:53Upfront 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. Default terms at MintMobile.com.