SpaceX Files for Historic IPO & Dating Apps Pivot to IRL Events

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0:29Jack A.:Good morning, Brew Daily Show. I'm Neil Freiman. And I'm Toby Howell. Today, why are thousands of homes disappearing from Zillow?

0:37Neil M.:Then the big one is here. SpaceX officially filed for its IPO. It's Thursday, May 21st. Let's ride.

0:49Jack A.:Not even TV vets like Jeff Probst are immune from messing up. Last night on the live finale of Survivor 50, the host mistakenly revealed who lost the fire-making challenge before that tape segment aired to viewers, spoiling to everyone which contestants would make it to the top three. After a lot of confusion on the set where a bewildered probes asked, what just happened? The show went to commercial, and when it returned, he handled it like a pro. So, I love doing live television, he said, and called it the last twist of the season. It's called a peek into the future.

1:22Neil M.:It made me so grateful, Neil, that we have nothing to spoil on this show because I don't know if we could handle it with as much grace and aplomb as Jeff Probst did. Although I will say the day after my sister got engaged, I congratulated her on the show. And apparently I wasn't supposed to do that. So that's the biggest thing that I have spoiled. It's not exactly something that millions of people are hanging on every word. But Jeff, if you want to come on this podcast to discuss, we all make mistakes. have your people talk to our people. And now a word from our sponsor, LinkedIn ads. Neil, have you ever had a not so fun talk with a CFO before?

2:00Jack A.:No, because I've never made a bad investment in the pursuit of reach reactions and impressions. Not once ever, certainly not one that costs a lot of money.

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2:21Jack A.:So advertise on LinkedIn, the network that works for you.

2:24Neil M.:Spend$250 on your first campaign on LinkedIn ads and get a$250 credit for the next one. Just go to linkedin.com slash MBD. That's linkedin.com slash MBD. Terms and conditions apply. A rocket ship of a company filed to go public yesterday, and it's a company that makes rocket ships. SpaceX's IPO filing finally gave everyone a look under the hood of Elon Musk's Frankenstein monster of a business. First takeaway, it makes a lot of money. Revenue grew 33 % last year to reach $18.7 billion powered by its Starlink satellite business. The second takeaway, it spends a lot of money. Capital expenditures doubled to over$20 billion as the company plowed cash into designing rockets and training AI systems.

3:08Neil M.:In total, the company lost$4.9 billion, which will test investors' appetite considering it's targeting a nearly$2 trillion valuation. valuation that valuation is propped up by a three-headed monster that looks more like the meme where two heads of the dragon are fierce and one is a little derpy spacex has three business units space which includes rocket launches that bring payloads like satellites to space there's connectivity which includes its starlink internet business which brought in over four billion dollars in revenue and there is ai which let me give you this stat courtesy of dan primack from axios Twitter had$1.2 billion of revenue in Q1 2022.

3:48Neil M.:SpaceX's entire AI unit, including X, Grok, and all AI compute, brought in only$818 million in Q1 2026. That is less than Twitter. So that's the derpy dragon. But eventually, Elon hopes they can all work together in perfect harmony using rockets to launch satellites that bring GPUs to space to build data centers, which will train its AI models. That's the vision, at least. Neil, this was the big one. what did you take away from getting a peek at SpaceX's financials? Just big picture.

4:16Jack A.:This was probably the most highly anticipated S1 filing of all time, because for as much as we talk about SpaceX and it permeates our culture and the business world, it's been a financial black box. We don't know how much money we didn't know until 12 hours ago, how much money it made or lost. It's been private forever. So SpaceX was founded in 2002, which was before Meta, which has been public forever. It was founded before Tesla. Tesla was founded in 2003 and went public in 2010. It was founded before Uber, which has been public for a long time. So SpaceX has been this mystery box that we just haven't been able to see inside.

4:55Jack A.:And we finally are able to see inside. So it's been just a nice it's like it's been a nice reward for all of us who have been covering this company for a long time. My takeaway is that there are very few companies that command this type of valuation with this kind of financial. So SpaceX wants to go public at a valuation of at least$1.5 trillion. It made$19 billion last year, lost about$5 billion. Now, it's targeting the same valuation as Meta, another company I mentioned. Meta had sales that were 11 times SpaceX last year and profits of$60 billion compared to SpaceX, which lost$5 billion. Tesla, which would have a lower market cap than SpaceX, did five times the amount of SpaceX revenue last year.

5:40Jack A.:So my big takeaway is that Elon just commands an insane revenue multiple that no other CEO can. And it's because of this growth potential that he sees with SpaceX.

5:51Neil M.:Yeah, I'm going to quote Dan Primack again, who said his immediate reaction to the SpaceX S1 filing was, it's a big company, but it's not as big as many of us thought. because, yeah, when you put it in context of that Tesla revenue, you're like, wait, Tesla's a much larger company in terms of the money it actually makes. Let's talk about Elon, though, and his compensation plan because it's a very Elon compensation plan. First of all, he owns around 50 % of the company's entire shares outstanding. And then based off of the class of shares he owns, he has more than 85 % of the shareholder votes because of some superclass voting share structure.

6:27Neil M.:That is crazy. We talk about ironclad grips on companies like, go back to Meta again, Zuckerberg has control over the voting shares. 85 % of a company this size is just absolutely unheard of, but it goes back to why Elon wanted to keep SpaceX private for so long. He didn't want to have to answer to shareholders. Now that he is entering the public markets, he wants that control. Also, there's just some funny things in his incentive package. If SpaceX reaches a$7.5 trillion valuation and establishes a permanent Mars colony with 1 million inhabitants, he would get 1 billion in restricted shares as well.

7:08Neil M.:Yeah, most people are looking to drive EBITDA. Elon is trying to colonize Mars. And that is apparently a very important part of the company's growth path going forward.

7:18Jack A.:Yeah, let's talk about the growth path. Because we talked about how insane the valuation is. It's like 80 times sales compared to mega cap companies, which are more around like seven or 10 times sales. So if you're investing in SpaceX, you're investing in Elon's vision of a space bound human population. And a big part of that is putting orbital AI data centers in space. And what they say is the total addressable market for AI data centers in space is twenty six point five trillion dollars. So if you're saying this is the total addressable market and a lot of times companies will say this is our total addressable market in their prospectus for IPO.

7:56Jack A.:And it's pretty big. It's pretty lofty. It's usually not that realistic. But no one has a figure that's like, you know, the more than the GDP of virtually every single country outside of the United States. And so when you're betting on SpaceX in their IPO, if you want to invest in them, it's you think that Elon is just a single handed visionary. Same thing with Tesla as well, and will drive the next AI slash space age and thinks that the future is going to be a bunch of orbital data centers powering everything here on Earth and on the moon and potentially on Mars.

8:26Neil M.:The final thing we need to mention about SpaceX is a lot of their ambitions is underpinned by one thing, and that is Starship. Remember, the giant rocket that we've seen launch and fail and blow up and whatnot. It's launching again today, later this afternoon. But basically every part of their vision needs to be powered by Starship because they need to bring larger payloads up to space that its current roster of Falcon rockets can't pull off. Starship needs to bring these big satellites that can deploy these AI data centers. So that's one part. They also talked about maybe point-to-point travel within Earth using Starship, get anywhere around the world in 30 minutes or less.

9:07Neil M.:So it's got a lot of lofty vision. I mean, we've said that word a lot already, but they need this giant rocket to work, which it hasn't really worked so far. Tune in today to see if their latest version of Starship can actually make it and do what they want it to do.

9:21Jack A.:And SpaceX is firing the starting gun on what's going to be a historically insane IPO year. We also got reports that OpenAI might file to go public, do the same thing as soon as tomorrow or at least in the next few weeks. And then Anthropic is also gearing up to IPO. These are just the, you know, some of the biggest companies in the world. They're all private. Soon they're all going to be public. So soon if you open up Robinhood, you open up your brokerage, you're going to be faced with a choice of whether to invest in SpaceX, OpenAI, or Anthropic. Maybe you want to invest in one or zero or all three, but it's going to be bedlam on the public market.

9:58Neil M.:I'm just imagining San Francisco's real estate market. Once all of these shares start to invest, it's going to be gnarly.

10:03Jack A.:Well, SpaceX, also based in remote southern Texas, is going to create all sorts of warped real estate down there with a bunch of new millionaires in the remote corner of the south. Moving on, Zillow surfers in Chicago might have noticed something really odd yesterday. The house you were pretending you could afford the day before wasn't on the website anymore. Thousands of home listings in the Chicago area disappeared from Zillow yesterday. And it's all because of a very convoluted legal battle between some of the heaviest of heavyweights in the real estate industry. Zillow, the most visited U.S.

10:35Jack A.:real estate website, Compass, the world's largest real estate brokerage, and Midwest Real Estate Data, a data company that's more of a welterweight in this metaphor, but has aligned itself with Compass. Now, the main thing to know is that Zillow and Compass do not like each other, and at the center of the spat is what's known as private listings, the process of shopping around your house on the DL before blasting it everywhere on a platform like Zillow. Compass is pro-private listings, encouraging sellers to share their homes initially among a small group that includes Compass agents to get a better value.

11:05Jack A.:Zillow is very anti-public listings and last year instituted a new rule. It would block any home from its site if it wasn't publicly available within a day of it being listed for sale. Fast forward through a bunch of lawsuits and we get to yesterday when Midwest real estate data, remember on the side of Compass, blocked Zillow from accessing data on 43 ,000 properties in the Chicago area. The reason? Zillow's website didn't feature just a few homes that had been previously privately listed. Toby, as if the home selling or buying process wasn't stressful enough, the companies in control of everything are in an all-out brawl, and that's turned thousands of home listings invisible.

11:41Neil M.:Let's dive into the arguments for and against private listings. So as you mentioned, Compass is on the side of private listing. CEO Robert Refkin argues that public listing history can actually hurt sellers because then buyers can see things like price cuts. how many days it's been on the market, if the listing is stale or not. And he says that access to that information is actually a killer of value, therefore getting you a worse deal for your house. Now, the critics' argument, Zillow's side, is that it obviously favors a brokerage like Compass that has both sides of the market. If you never bring it to the public markets, I mean, it's not an IPO, but if you never show it to a lot of people publicly, then one Compass broker can talk to his buddy and say, hey, let's just skip everything.

12:26Neil M.:I'll sell it to you. We both reap the fees. Compass says that we don't do that sort of back dealing, but Zillow is like the only way to get a better deal is to just know all the information up front and give everyone a level playing field.

12:37Jack A.:What's funny to me is that this dispute that's led to all these listings being listed or being invisible in Chicago area involves nine listings out of 43 ,000. Those are the ones that Zillow refuses to put on its website because they had been listed privately before. But at least as of midday yesterday, there were considerable drop in the amount of homes listed for sale in the Chicago area. Zillow displayed about 2 ,000 for sale listings in the city, while Redfin, a competitor, showed 5 ,000 realtor.com, 8 ,600, and homes.com showed more than 4 ,700. So this is leaving home sellers and home buyers in the Chicago area in the lurch because Compass and Zillow are fighting.

13:19Jack A.:Moving on, what's red and white and now in the black? Target. The retailer that's been struggling mightily showed early signs of a turnaround yesterday, posting its biggest sales increase in four years. Then, after crushing Q1, it went ahead and raised its revenue guidance for the rest of the year, revealing its confidence this momentum has legs. For its revival, Target has a former intern to thank. Michael Fiddlekey, who began his Target career as an intern, worked his way up the corporate ladder to become CEO earlier this year, and his three-part focus on making stores more pleasant to shop at, infusing more technology, and adding better, more stylish merchandise is paying off.

13:56Jack A.:In his understated Midwestern way, Fiddlekey said, Even with this early progress, we know our work is just beginning, and we have confidence we're on the right path, because guests are responding in areas where we are leaning in and driving change. Not only are Target's results good for Target, but they're a positive sign for the U.S. economy, which depends on consumer spending for a large chunk of growth. No problem signs here.

14:16Neil M.:Target's problem has always been they've been stuck in the messy middle. Walmart owns the cheap factor. Amazon owns cheap and convenience. And Target is not the cheapest, not the fastest. So what is it? They've tried to start leaning into making stores feel delightful to shop at a gun, make it feel like a treasure hunt where you're picking up knickknacks that maybe you didn't go in shopping for, but maybe you leave with. So that's been part of the strategy along with just doing basic things like cleaning up the stores. They've been leaning more into the baby aisle a little bit, just sprucing up their food and beverage industry.

14:49Neil M.:But what I thought was very interesting is that the number one customer complaint still is in-stock inventory. They want – if you go in looking for toothpaste, you better have toothpaste on the shelves. It sounds like a very basic retail 101 thing, but that is basically what Target's been struggling with and what they're leaning into is just make sure we have the stuff that people want to buy when they want to buy it. all the other stuff kind of falls into line after that but fascinating to see fidelki kind of turn it around a lot quicker than we expected we'll see if you know maybe the comparisons were a little bit softer which is why it's doing so well but good job target and they just hired a new supply chain

15:26Jack A.:uh head earlier this week uh to maybe fix some of those empty toothpaste as you can tell i'm

15:33Neil M.:running low on toothpaste right now it's top of mind for me moving on dating apps realize that they have fried a generation's brains with endless swipes and curated profiles and are recalibrating to a serve up more IRL experiences and be do away with swiping. Tinder is trying its hand at hosting events in LA that include pickleball nights, silent discos and happy hours to try and counteract dating app fatigue. Bumble recently announced that it's ditching the swiping mechanism popularized by Tinder entirely matching users using AI instead. Part of this is business driven. Bumble stock is down more than 90 % since his 2021 IPO, while Match Group, which owns Hinge and Tinder, is down 75 % over the past five years.

16:14Neil M.:But clearly the people using apps are looking for a break too, as shown by a Forbes survey which found nearly 80 % of daters felt emotionally, physically, or mentally exhausted by the apps. It all points to a rethinking of the dating industry at a time where the value prop doesn't seem to be resonating for anyone involved. Other changes from Tinder include an upcoming speed dating tool where you can chat with people virtually after you've verified your id and group dates which lets friend groups meet other friend groups for larger hangs neil there's always plenty of discourse around the state of dating but now the people controlling the apps are admitting that yeah swiping sort of broke everything now we're trying to fix it talk about

16:53Jack A.:new blood match group and tinder have a new head his name is spencer raskoff who was actually the co-founder of zillow which we just talked about he seems to be good at matching uh buyers and sellers in a particular market. So he became the CEO of Match last year and then became CEO of Tinder as well. And he's really focusing on Tinder. Tinder still has that brand. It is the biggest dating app in the world. It's available in over 185 countries, accounted for more than half of Match's revenue last year. And Match has a bunch of different dating apps like Hinge under its banner. And they still have a lot of people.

17:29Jack A.:They still have a lot of young people. 50 % of people on this app are under 30. So he still believes in the promise of dating apps, but I think there is widespread acknowledgement among him and Whitney Wolf Heard, who was returned to Bumble, which she started as well, that they're just not working right now. And Tinder specifically blames its overzealous monetization efforts, but trying to squeeze as much money as possible because they were struggling financially. Now they're pivoting to all these different types of tricks and different ways to improve the experience, whether that's in real life stuff or using AI to make things better.

18:07Neil M.:That's the real question for me. Is it better that now algorithms are gonna be matching people versus your own desire swiping? Is that actually better? And a lot of companies are saying, yeah, we might as well give it a shot, but I wonder if there's gonna be a similar sort of backlash to saying, how are we letting algorithms control who we are matching up with, who we're going on dates with, which is why the in real life component is so big. playing pickleball and flirting in a low stakes way is probably still the best way to meet people. So maybe less AI and more pickleball is the solution to all of their issues.

18:39Neil M.:All right, we're going to take a quick break and come back with Neil's numbers right after this.