Inside SpaceX’s Confidential IPO Filing, Blackstone’s Sell-off Opportunity, Prediction Market-Crypto Crash Theory

0:13Anita Ramaswamy:Welcome, everyone, to The Information's TI TV. My name is Akash Pasricha. It is Thursday, April 2nd. A couple of stories we are watching this morning. Alibaba, a leader in open source models, is launching a new closed source LLM. The company is looking to generate more revenue from enterprise customers who are paying for the models. We also saw Artemis 2 astronauts blasting off Wednesday from the Kennedy Space Center in Florida for a 10-day mission around the moon. These are the first astronauts to return to the vicinity of the moon in over 50 years. On the show today, we are digging into SpaceX's valuation.

0:50Anita Ramaswamy:The company is said to have submitted its confidential IPO filing. We'll also dig into the private credit markets exposure to SaaS. We'll then pivot to our special coverage of the information's 2026 NextGPs list. We've got a partner from Emergence Capital coming on, and we will wrap with a look at the possible connection between booming prediction markets and the flailing crypto market. It's going to be a great show, so let's get right on into it. SpaceX filed for an IPO confidentially this week, according to multiple reports. There are still likely a few weeks before the company files publicly, but PitchBook recently put out a great report looking at the business and its valuation.

1:32Anita Ramaswamy:I want to bring on PitchBook's Franco Granda, who worked on that piece, and I also want to bring on our Elon Musk reporter, Theo Waite. Welcome to the both of you. It's great to have you here. Franco, I want to start with you. So you put out this report, and the most interesting part, I thought, was the valuation. And what I want to know is what valuation did you ultimately get to for SpaceX? and then we'll talk about how you got there. Absolutely. Now, thanks, Akash, for having me on. What a better time to speak about SpaceX right after the Artemis launch. Yeah, to your point, this is a very interesting company to look at.

2:07I decided to, when I first started looking at the company, to look at both types of the businesses, as I did aware at the time. You have the launch business and the satellite business, Starlink. Obviously, now you have XAI, which is another part of the equation. But as we first touch on launch, you could just compare to the public companies in the space there. And if you look at similar comparables based on the adjusted growth metrics, you actually get a valuation of roughly$400 billion. And when you attach the similar valuation metrics to the satellite business, to some of the companies that are currently trading today in the market, some of those high growth satellite internet businesses, you get to$1.1 trillion valuation for that business alone.

2:55When you combine those two, you get to roughly$1.4,$1.5 trillion valuation for that side of the business. And now when you attach that XAI component, which is rumored to be$250 billion, you get to roughly that$1.75 trillion that they're talking about. I think that you could justify it based on those metrics alone. But obviously, I think this is all more of a narrative play, combining the whole business, all of those three businesses together and getting that platform play as we get into 2026.

3:30Anita Ramaswamy:So let's go through that justification. I mean, your model walks through each of those parts. And I think XAI is, you know, that's a business that we've been looking at here on the show. So it's more mysterious and less mysterious in some ways because we've seen this business model, I guess, play out with other AI labs. But I want to talk about the launch and the satellite business. I mean, these are huge numbers. Walk me through the growth rates that you see in each of those businesses. I mean, how you ultimately got to a$1.1 trillion valuation for the satellite business alone. Yeah, absolutely.

4:06As you look at the numbers, I had to dig back all the way to 2010 for both businesses. And my forecast would go out to 2040, right? When you're looking at this company, you're starting to get into crazy numbers. So you really have to look at the 10, 15 years out and looking at what those numbers do. So for the satellite business, for Starlink, that really is the cash cow for this. And I think not a lot of people realized this until very recently, that this is the business that's grown to be roughly 70 percent of the revenues uh you have uh 10 million subscribers now you have 10 000 satellites in space and the kind of growth that you've seen in the past four years has been tremendous the the revenue growth has been stellar at 50 plus percent kegger uh ebitda margins have exceeded 50 plus percent and so this is software type margins for a satellite business so it's very impressive.

5:03And when you're looking at the launch side, it's also quite impressive. They're roughly putting out$5 billion in revenue. Margins, I estimate they're roughly at 30 % EBITDA. So it is a profitable business, but really the value comes in when you combine both. And so you have Starlink really creating the demand for the launches. And that's really allowed them to make the launch business be as good as it is, right? They're the dominant player there. they just launched 165 rockets last year and that was mostly starlink okay so those were starlink

5:39Anita Ramaswamy:so okay so so i hear you on that so now what i want to do is i want to bring us back to present day theo and i want to talk about where these projects are at right now tell us a little bit about on the ground you know what we've seen in terms of delays and whether or not you think and Franco's projections will be realistic in the context of that. Yeah, well, I mean, I am curious because, you know, this report, which was obviously written, you know, a few weeks ago, or, you know, it clearly took a while, talks about the first Starship test of this year being in March. Obviously it's April now, that hasn't happened.

6:16And you know, I think based on what Elon and Gwen Shotwell have said, it seems like it may happen this month. um but you know it seems like starship is such an interesting like i would imagine if i were financial analyst it'd be very hard to make projections because starship is such a critical uh component to all of spacex's plans like the next generation of starlink uh data centers in space theoretically all the nasa missions like those are all dependent on starship working and And it seems like, you know, if you're thinking about it that way, like every week that it's delayed or the tests don't happen or that there are other bottlenecks, like would have knock on effects for all of these projections.

7:00And I saw in the report, you know, you talked about you see five to 10 Starship launches this year, including the first commercial payload. Like, I'm curious, Franco, do you think that is still on track now? You know, has anything changed in your projections there? Yeah, no, I think you're spot on. in my mind, this is the most critical thing happening ahead of the IPO. As you mentioned, initially, the expectation was that it would be in March. Now it's talked about being this month in April. And my take is that they're just taking the time to make sure that they execute on this. I think that a failed Starship test is going to be very damaging for the IPO.

7:42It's all about the narrative play going into this. and if they just cannot launch the 12th flight into orbit this time, it would just be catastrophic. So I think, yes, they will launch this month. Then the next one I expect it to be probably near around the IPO time, so late May, early June, just so they could get the hype going. And I do see it happening. If those are successful, of course, I do see them launching payloads into orbit this year. So whether it gets to the 10, I am not so sure anymore. I think that at this point, we're looking at very low to mid single digits in terms of Starship launches.

8:25But I think the most critical part is going to be the next two tests. So whether they could refuel in orbit, obviously, that's going to be very important for NASA. And so I think that they're going to try and really get those straight as they head into the IPO, because NASA is looking very closely.

8:42Anita Ramaswamy:So Theo, I want to ask you about some of the other reporting you've done on, not on Starship, but on Starlink. I mean, you've talked to some folks about how that business could grow and maybe some challenges that it could face there. What are the big challenges to growth for that segment? Yeah, I mean, you know, my understanding of the Starlink business is that a lot of the growth so far has come from, like, kind of the low-hanging fruit, so to speak. Like, you know, there are these traditional, you know, incumbent satellite firms like Viasat and HughesNet that would provide home Internet service through these satellite dishes that were very slow.

9:25And, you know, basically they were very, very annoying to work with and slow, and therefore it was quite easy for Starlink to pick up their customers. and the net and they've had tremendous growth from that and from um you know other people as well but it seems to me like the users that are the most likely to use Starlink and are the most likely to pay a lot of money for it have already signed up and a lot of the future users are going to be people in parts of the world where people where they just have less money to spend like there's going to be huge growth eventually if Starlink can launch in India there's going to be a lot of growth there.

10:05There are lots of African countries where they want to launch where there would also be huge growth, but there's no way people in those countries are going to be able to pay more than $100 a month like, you know, a lot of the initial users in the US were. So it does seem like, you know, the user number is going to go up a lot more quickly than the revenue per user in the future, I would think, which probably makes, you know, projecting revenue growth kind of complicated.

10:34Anita Ramaswamy:So, Franco, how did you incorporate that into your model as you forecasted this kind of rocket ship growth for Starlink? Of course. Yeah, no, that was one of the things, the dynamics I had to really come to terms with. The fact that the revenue per user is, in fact, going down. And as I started looking early this year, early January, early February, you saw that that dynamic intensified a little bit. they're starting to provide hardware to users for a lot cheaper prices. They're giving a lot of more incentives for people to join. And so the revenue per user is coming down. What I've seen from other financial forecasts is that people don't really take that into account.

11:17I think this year will be, at least during the IPO and the S1, that revenue per number is going to be crucial for what's going to happen to the economics as we move later on. I do think that later on, the direct-to-device opportunity will be empirical for this initiative. You have them having the ability now to deliver service to devices directly, to cell phones directly. And you saw how they acquired$20 billion worth of Spectrum last year from EchoStar. And that is simply to have this ability to do this. And now they do have a much stronger position in the negotiating table with a lot of the other telecoms, with AT &T, Verizon, where they will be able to attach some starting services to some of these plans.

12:11But I think the big component of the growth as we move into 2030, 2040, is going to be that direct-to-device opportunity. And so in my projections, most of the growth is going to come from there. and along with that, it's going to be lower ARPU customers. I estimate these are going to be$3 to$5 revenue per month users. And so the revenue per user will come down, but my estimates for how many customers they could get to by 2040 is 1.1 billion customers, but that is mostly direct-to-device customers. So that's going to be cell phones, it's going to be cars, it's going to be IoT as well as the world.

12:50Anita Ramaswamy:Let me ask you a different question, Franco. You also put out another report recently looking at some of the other factors that could affect the SpaceX IPO, not the least of which are oil prices. You have Elon Musk's TerraFab ambitions. Let's start with oil. You think it's going to have an impact here? Very minimal. I think at this point, oil fuel prices for each launch is roughly$500 ,000 to$500 ,000 per launch. And that is, you compare that to the 70, or I estimate it's going to be$20 million launch cost for them. It's going to be a very margin of error there for them. So even if you have 100 % increase in oil prices, it might be a$500 ,000 boost in costs per launch.

13:38So that's not going to be an impact. And then you have now the transition to Starship. uh starship doesn't use or part of the the fuel used by starship is oil-based but much less so than it is in in the pocket nine and so i think at this point uh oil prices do not really have

13:56Anita Ramaswamy:an impact on their business theo explain to us what the terra fab ambition is for elon and how that connects to spacex yeah i mean it's supposed to be a joint project between spacex and tesla to build a chip fab. And there was a big press event about this a couple of weeks ago where, you know, Elon kind of laid out this grand vision and he also shared a mock-up of what a SpaceX data center in space could look like. But, you know, what stuck out to me is that there really were not any timelines for this shared in the event at all, as far as I could tell. And, you know, it seemed to me almost more like a signaling exercise to say SpaceX and Tesla are linked, even though they're going to be two different public companies.

14:51Their futures are linked together more so than it was like an actual plan for something. That was my takeaway.

14:59Anita Ramaswamy:And Franco, what's your take on TerraFab? How realistic is it? I think it's more of an aspirational goal. I looked at what other Semiconductor companies have spent On building up fabs from scratch And I estimate that for 50 ,000 Wafer starts per month Capacity facility It costs them$35 billion And they're talking about 100 ,000 Wafer starts per month So it's going to be like a 70 plus billion dollar endeavor That will take 5 plus years To come into fruition But right now the thing is Semiconductors are very hard to produce, right? No matter how much capital you throw at the issue, this is something that a lot of companies have failed that, a lot of governments have failed that.

15:44And so I think that for them to be doing this now is more for the narrative play of things. It's like, hey, we plan to launch a million satellites into space that will be AI data centers. We will need chips. If there's no capacity in the entire supply chain, we will provide them. And so I think it's more about that narrative play. And obviously, I think they're going at it, right? Like they're investing. You had Governor Abbott in the audience during the announcement. I think they're serious about this. They will continue to expand into this. But with it that's successful, I think it's a high-risk play and something that people will be looking at with very close eyes.

16:24Anita Ramaswamy:Great. Well, Theo and Franco, I want to thank you for coming on. That is Franco Granda from PitchBook and Theo Waite, our Elon Musk reporter here at The Information. AI anxiety has spilled into public credit as lenders have a ton of exposure to SaaS companies. Investors have pulled money from these funds on Mass. Blackstone and Apollo have fallen as much as 30 % this year. But our financial analysis columnist, Anita Ramaswamy, thinks there is more to that story than meets the eye. She wrote a column on that sector this morning. I want to bring her on to talk all about it. Anita, welcome to the show.

16:59Anita Ramaswamy:It's great to have you here. Great to be back. Okay, so what's your main thesis here? So my main thesis here is that Blackstone, which is one of the private credit managers that has been under a lot of scrutiny recently, is actually potentially a good investment to look at right now. And I think investors are missing a lot of the fact that the long-term business of Blackstone does not depend on software in the way that the market has reacted as though it does. Okay, break that down for us. Why not? So if you look at Blackstone's overall portfolio, they have a really diversified set of businesses.

17:33They have private equity, they have real estate, they have infrastructure, which is sort of like toll roads, data centers, that sort of thing, in addition to private credit. They are one of the largest asset managers in the world, and they do have a lot of exposure to private credit. But even within that, the software exposure is limited. So across their entire portfolio, about 7 % of the assets are held in software in some way, according to Blackstone. If you look at just their credit portfolio, it's about 10%. Now, in individual credit portfolios that are seeing some requests for withdrawals and some panic and some fears and concerns, the exposure is a little bit higher, somewhere in the 20s, mid-20s percentages.

18:13But, you know, at the end of the day, Blackstone is in a lot of different buckets. They're doing a lot of different things. and some of those other lines of businesses, I think, have long-term potential that investors are overlooking just because they're panicking about the credit markets right now.

18:27Anita Ramaswamy:Okay, so I just want to recap here. So Blackstone, they've got these four lines of business. They've got private equity, they've got real estate, they have infrastructure, they have private credit. The company says 7 % of all of that is exposed to the software sector. And if you look at private credit alone, 10 % of that is what's exposed to the software sector. So, I mean, I hear you in saying that certain individual funds may be more exposed. I guess the broader question I have is, how are the other sides of the business performing? Are they sort of making up for the losses in software in some cases?

19:01Yeah. So it's a good question. I mean, there's two things I want to say. So firstly, actually their last line of business is multi-asset. It's like a hedge fund business. They report infrastructure and corporate private equity together.

19:12Anita Ramaswamy:Got it. And that PE arm did really, really well. If you look at the breakdown of performance from 2025, both of them appreciated by 24%, by 14%, and they were the top performers in the portfolio. I will also say with private credit, we haven't really seen the signs yet in Blackstone's portfolio and some of the bigger asset managers of deterioration in the underlying quality of the investments. So we haven't seen a huge spike in default rates. We haven't seen all these software companies all of a sudden go bankrupt. I'll caveat that by saying, we don't know what the future could hold, and that's exactly the source of the anxiety.

19:46But if you look at Blackstone's overall portfolio, it looks like it's performing really well. Now, I do want to make the distinction between the performance and assets under management, which for Blackstone and firms like Blackstone is the single most important metric to look at, because at the end of the day, they generate revenue by charging fees on the assets that they manage. And so I did also want to note, Akash, that in Q4 2025, Blackstone had a fantastic quarter. It was actually their best fundraising quarter by, you know, in terms of net flows, like how much capital they were able to attract since 2022.

20:20And so I think really the next earnings is going to be an interesting data point and we'll see whether they're able to keep up some of that momentum. But at least so far, it seems like Blackstone has been able to continue just taking their assets under management higher and higher every quarter for several years.

20:36Anita Ramaswamy:So did you get any sort of explanation from the people you talked to around how it is that the stock price can be going down, and yet the customers of the company, the people putting money into these funds, that seems to be going up. I mean, these are two opposing stories. Well, part of it is a timing thing because, you know, Blackstone has only reported so far their financials until the end of 2025. And a lot of this worry and concern we've seen in the credit markets has been early 2026. But also, I think there is some element of the investor base that's actually investing in the Blackstone funds is a little bit different from the investor base that is owning the stock.

21:16And, you know, there are retail investors sort of trading the stock. It's just a different constitution of types of investors. And so I think you've got to think about Blackstone both on the fund level and also on the what is its equity doing level.

21:28Anita Ramaswamy:Now let's come back to the software exposure issue. So I just want to make clear for people when we talk about software exposure in private credit. Just remind folks what we're talking about. This is Blackstone holding basically loans that banks have made at some point to all these software companies that at some point have been taken private. I just want to make sure that we have that right. Yeah, so more or less, Blackstone in this scenario is actually the lender. And all of these private credit firms are sort of referred to sometimes as non-bank lenders or shadow banks, whatever you want to call them, because they are coming in and providing capital oftentimes to companies that are a little bit riskier that banks might not want to lend to or companies that might not want to borrow from banks in the first place.

22:15And so they've kind of emerged and become a really big force in the global economy and the capital markets over the last decade or so. And Blackstone is one of those. And a big reason why private credit has grown so fast in the last decade or so is because they're providing oftentimes money to private equity firms to do buyouts of software companies. And so that's how a lot of these guys got software exposure in the first place. A lot of Blackstone's credit portfolio, one of the companies that's not doing so well is Medallia. It's a software company that Toma Bravo bought out and Blackstone provided some of the capital for that transaction.

22:48Anita Ramaswamy:So what is the company doing to combat this in the software segments of the business? You know, I imagine the top executives of BlackRock, Blackstone, I'm sorry, they have the other sides of the business to balancing and software. But, you know, I'm talking about the software executives at Blackstone. I mean, what are they doing to deal with the fact that, I mean, this private credit issue is very significant? Yeah, so I think we'll hear a little bit more about this on the next earnings call. But so far, Blackstone did one big thing that really stood out to me as being unique and different from its peers.

23:25A lot of these big private credit funds and private credit managers have seen investors wanting to pull out more capital from the funds than they actually allow. So a lot of the funds say, okay, it's long-term capital. You're going to invest your money and only 5 % or only 7 % of the fund can actually be withdrawn at any given time. That's in order to limit volatility. That's just how these private investments tend to be structured. And so Blackstone, just like many other managers, just like Blue Owl, just like Apollo, just like KKR, saw redemption requests for their flagship credit fund that were in excess of how much they actually could distribute based on the fund structure.