How the SpaceX IPO could rewrite space investing

00:00 Speaker A

SpaceX raising its its target IPO valuation to more than 2 trillion. That’s with a T. So for context, that that would be worth, you know, more than meta, for example. Does that number make sense to you, Justice?

00:23 Justice

You know, the the company’s been growing at an amazing clip. and so the company’s been doubling year over year for the last handful of years. Um, I think the $2 trillion number, well, as rich as it sounds and it obviously turns a lot of heads, it’s it’s a really a super company. It’s got several different businesses all combined into one. Uh, the crown jewel from the cash flow department is is a company called uh Starlink, which is in the SpaceX business. And so, um, there’s a lot to kind of double click though. And so I I do think the the 1.75 trillion or even $2 trillion value, which is is, you know, it’s an aggressive valuation. I think if you turn around in in three or five years, it’s going to look to be a very cheap valuation.

01:31 Justice

So when you look at the greatest companies in in in the world, they’ve all got that moat that you’re describing. You mentioned Facebook, Facebook’s got a moat, Google’s got a moat, um, Nvidia’s got a moat. Every, you know, Amazon has a moat. All these companies have moats. And so if you break down the SpaceX business, they have a a reusable rocket called the Falcon 9, which goes up once every day or two on cadence. It’s the only company in the world that can do anything like that. So that’s definitely a defensible mode within that the launch business. Now, Elon’s going to transition that into something called the Starship, but similarly, I mean, they can take payload up in cadence. They’re like 90% of America’s launch market. So that’s definitely a moat. And if you because keep in mind, it’s not just the launch business anymore. They have the Starlink business. Starlink definitely has a moat around it. Um, Amazon just bought a business this week to kind of compete with that business, but SpaceX and Starlink are so far ahead, there’s a moat around the the Starlink business.

02:51 Justice

And then if you want to get into it, we can, it’s up to you. Um, we can work walk through the uh the the Grok and the XAI uh side of the business as well, which I I’ll argue has a very strong moat on on those businesses as well. You combine that all together, you really have a super company and, um, you know, this is obviously a retail investor, an institutional investor show. It’s going to be the first time ever in the history of the world that you’re really going to be able to buy Elon. You know, all the companies are going to be in this one company and some would argue maybe Tesla even ends up in this. And the only thing that we’ve ever been privy to kind of see like something like this is is basically Berkshire Hathaway in a different way. Berkshire was a bet on Warren Buffett. This company will be a bet on all of Elon Musk’s uh beautiful endeavors that he’s that he’s that he’s got underway.