SpaceX IPO buzz raises questions about market impact, volatility

00:00 Speaker A

massive companies that we all expect to or most people expect to come public. It’s been reported they are all trying to come public this year. Let’s start with SpaceX. Reporting just yesterday from Bloomberg that the company is now eyeing a 2 trillion dollar valuation after confidentially filing for its IPO earlier this week. When that headline crossed, it was 1.75 trillion that they were going to come public at. So we’re adding, you know, what’s 250 billion between friends at this point.

00:25 Speaker A

Um, Steve, I want to start with what you make of the idea that a company, let’s just go in a vacuum. company’s going to come public and it’s going to immediately be the eighth biggest company in the market.

00:36 Steve

Here’s a couple of issues. So how much stock are we talking about issuing now? I mean, the number, the number goes up, but you’re you’re talking about what the largest IPO ever, which is, which is going to be a huge amount of stock for the market to swallow. If they issue $175 billion in stock, whatever, where’s that money come from? There’s not $75 billion in cash sitting around. That money has to come from other places. It’s going to come from other, it has to come from other stock holdings. So you’ve had a very favorable supply demand situation when it came to stocks. The supplies have been stable to shrinking.

01:06 Steve

Now you’re going to get this this huge slug of stock on the market.

01:09 Speaker C

Well, you’re going to introduce an IPO that’s a top 10, that’s a top 10 company in the market. IPOs are pretty volatile, right? Just in general, the action that you see in a stock, especially a big one that’s going to have a lot of hype around it. And I think that just forms maybe a bit of a chaos moment for the market if you have SpaceX, like what’s the stock going to do on the first day? Right? And that’s going to it it’s going to do something wild, right? I think we can all maybe agree on that.