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I'm Kailey Liones in Washington, but clearly all eyes are on New York today as SpaceX launches into public markets. A record setting IPO of seventy five billion dollars priced
at one thirty five is shared. The stock opens on the Nasdaq eleven percent higher than that at one point fifty And as we speak down at the Nasdaq where this trading got underway, we find Bloomberg's Yea Hira on it, who will check in within just a moment as we considering it raised seventy five billion dollars in that initial offering, valuing the company at just about one point eight trillion dollars.
That valuation that market cap obviously significantly higher with the gain we are seeing today north of two trillion dollars. So let's go to a hire now at the NASDAQ four more so, Yeah, Hira, obviously we're setting records here. What is the vibe like at the NASDAK right now? It seems everything and this process has gone pretty smoothly.
Yeah, pretty smoothly for the biggest IPO we've ever seen. And I will say the excitement, especially in the last hour as you were getting closer to trading, was palpable. You felt it here at the NASDAC. They are all scrambling making sure it all went off without a hit, without a hitch, And then outside you have all the Musk fans gathering hoping to get a glimpse of him. But as you and I know, he was over in Texas.
But as you said, SpaceX has officially begun trading, and with the stock opening at one hundred and fifty dollars a share above its one hundred and thirty five dollars IPO praise, and that game investors an immediate gain of roughly eleven percent. But now you said, it is trading
above that. But this valley's a company at approximately just under two trillion dollars, as you said, Kaylee, But it instantly puts SpaceX among the most valuable companies in the world, more valuable than Tesla itself of course, another Elon Musk owned company, Meta, and even Saudi Aramco.
All right, Bloombergs, you hire on live at the Nasdaq as SpaceX debuts. Thank you so much. So let's get more on this as we turn to Craig Trudell, our managing editor of Global Business America's here at Bloomberg and Craig, obviously, while you hold that title now you also led for
a long time Bloomberg's autos coverage. You are very familiar with Elon Musk as the CEO of Tesla, which, obviously, while being an auto company first and foremost also in financial markets and public markets, was the way to bet on Elon Musk. We now have a second channel for those bets in SpaceX. Whether or not these two get rolled together at some point, I'm not sure, but your reaction please to the appetite we are seeing for SpaceX as at debuts today.
Yeah, I think it's fascinating to see, Yes, a strong debut for SpaceX, a rotation maybe a little bit out of Tesla, which is something that we were really braced for, but not anything disastrous. I mean, we've seen, you know, on an Intrada basis, the stock you know, fall about three percent, but as of this moment it's a little
less than that, about two point eight. This is a company that you know has been quite volatile over the years in its own right, and if you know sort of that track record applies to SPACEXM, we should be sort of in for a bumpy ride here.
Well certainly so it's still Elon Musk that we're talking about a visionary maybe, but a lot of volatility we know can come with that. Walk us through the unique nature of the way this IPO happened, the idea that this price was set, It wasn't your typical price. Discovery Musk said, the price is one hundred and thirty five dollars of share. He got that, and obviously investors are buying this stock for more than that as trading gets going here. But how should we consider the way in
which the value for this company was said? We were just listening to Jim Chaino's talking about how skeptical he is of valuing a market cap at something one hundred and ten times revenue for a company that isn't profitable.
Yeah, I think it's fascinating in that, you know, this is also a company that you know, put out incredible numbers in their s one about you know, total addressable markets and talking about space based economy, you know, to hear Musk talk about the potential for this company, and to hear people like Jared Isaacman, you know, the head
of NASA. You know, he gave an interview very recently about this notion that the space economy it's been something that's been sort of highly speculated about, hyped up as something massive, and yet the follow through has been very minimal. I will say in defensive Musk and SpaceX, with the exception of Starlink, there's been very little in the way of progress toward making any money in space. We have
seen SpaceX make progress, wh others haven't. I think where you really run into trouble looking at this company is actually the AI portion. And the fact that that was just such a very recent addition to the SpaceX story maybe makes things kind of muddy and more complicated than they might have otherwise been had this just been a space company with a solid satellite business.
Well, a late addition, yes, but one that already does have some commitments tied to it. It seems we all saw the news of Google's contract with SpaceX that's going to be what nearly a billion dollars per month, assuming that SpaceX can actually deliver on the computing power that has been promised, how far do we have to go to SpaceX actually realizing these capabilities, actually having them to offer customers, not just like Google, but Anthropic is a big customer too, right.
Yeah, the two of them in sort of rapid fire fashion, you know, reach these deals in the lead up to the IPO, and surely that's helping sort of booie sentiment. But if we think about you know, Musk's ambitions to not just be a sort of infrastructure partner to the likes of Google and Anthropic and actually getting in the game itself and and you know, building a competitive chatbot and AI capabilities that can be monetized, that's where we've seen you know, real failures on musk part and he's
been pretty open about that. Actually on x This notion that they sort of started XAI all wrong and are kind of starting over. It was you know, really unusual and very like him that he would be so sort of candid about that, and yet maybe raises some questions about you know, just how quickly this will will be a company that's a major player and actually, you know, things beyond partnering with companies that have had success like anthropic.
Well, and you've just made the point, Craig about XAI getting rolled in to SpaceX. So would you be surprised if we see Tesla rolled in to this larger company.
You you know, just just going off the trend that we've seen this rolling up of Musk's companies. It does feel like that's also something that people quite close to Musk have not shied a way about, you know, speaking to this notion that you know, that would be you know, not even just a sort of open secret, but just something that people are very comfortable, you know. Theorizing about tells me that that it does feel like it's likely.
I also thinks it's interesting and that we've heard Musks say, you know, over and over again that he wishes he had more control over Tesla. One of the ways to sort of address the fact that he's not particularly comfortable with his command of that company would be to combine these because that is an aspect of SpaceX's structure that is quite different, where he has a special class of
stock that Tesla didn't have when it went public. If they were to combine, they would sort of you know, rationalize that and give him the ability of of stock that protects him from any activism or challenges to his sort of rule of the company.
All right, Bloomberg's Craig Drudell, thank you so much. SpaceX right now trading at one hundred and sixty four dollars a share, we're up nearly twenty two percent from that one hundred and thirty five dollars IPO price. Quite the debut we are seeing for one of the world's largest companies by market gap at this point after a record
setting seventy five billion dollar IPO. Ed Ludlow owns tech and space coverage as the co host of Bloomberg Tech, and he's here with us now on this debut day for SpaceX, and I feel like this is your super Bowl, Probably is most people in financial market super Bowl, as we're setting records here, not just in terms of IPO,
but in the size of this debut. Talk to me about about the demand here, as we had questions as to whether or not this price was set correctly given the unusual lack of price discovery that happened, whether or not five hundred and fifty five million shares being issued was going to be met with adequate demand. Are we seeing evidence that perhaps the appetite was even more robust than initially thought.
Well, it was massively oversubscribed on the institutional side, which accounted for eighty percent of the offering, and on the retail side as well, which was about twenty percent. And we can get into more of the specifics of how that sliced and diced. It's trading right now one hundred and sixty seven fifty twenty four percent above the IPO
price of one thirty five. What we reported over the last five days is that it has been Elon Musk himself, along with Brett Johnson, the CFO, and Gwyn shot Well the president, that really controlled and dictated the terms literally as opposed to like the bankers. Bankers have a lot of influence and IPO processes. But this time, part of the rationale, as it was explained to me, is that if you said it early ahead of a road show
without a range, it is atypical and unusual. But you basically removed the leverage of the long on the asset managers, the big institutions that would account for most of the order book anyway. It just made things on their terms. There are big questions about valuation long term right, it's come to IPO at ninety two times or something like that sales. But you know that's was how it was done.
And so you know, there are lots of retail investors that did get an allocation, some evidence that they are people that are also TESSA retail shareholders anecdotes weavidens, I'd say, but now there are lots of people that are you know, reluctantly and I guess not reluctantly it's not the right word. They don't want to be buying in the open market, but they are, you know, they kind of have to be.
Yeah, perhaps some noseholding going on here to your point and about valuation, walk us through what the thesis is here in terms of the total addressable market that SpaceX is saying that it can reach and what tangibly the company is now going to need to be able to accomplish from a technology standpoint, to be able to deliver on that deliver what it's promised to customers like Anthropic and.
Google so like right now, on a fully diluted basis, this is a company that has a value of more than two trillion, and they are pitching a story about a future where they are many things, a diversified business, which most of is selling AI software. Right they say there's a twenty eight point five trillion dollar addressable market, and twenty six point five of that is what they are calling in an umbrella or bucket of enterprise AI.
But in the near term, all of that is predicated on them being able to get Starship, which is on paper, the most powerful rocket and launch system humankind's have ever developed to work regularly and reusably. They have done twelve test flights. They asked closer, you know in the coming weeks of doing a thirteenth test flight, but they've never landed or both parts of it, the booster and the
spacecraft on top back on Earth. They have to do that if they are able to put into orbit satellites that are data centers, and that is kind of the middle step that gets them to that distant future where humans are living on Mars and they're able to generate most of their revenues and income from AI. It's not straightforward, and that has been a part of how much you place a value of twenty thirty to twenty fifty not right now on the historic IPO Friday.
Well, and it's also just so interesting to consider the circular nature of this, if you will, because we're talking about what SpaceX will need to do to deliver for customers like Anthropic, which at least in some parts of the wider SpaceX business. Here, if you're considering roc which obviously is no claude, there is still competition there. Just speak to that, ed and how all of this is setting the stage for Anthropic and also open Ayes ultimate public debuts that we're expecting later.
So state of play is that Anthropic has filed confidentially with the SEC for IPO and so has opened SpaceX through its XAI R. SpaceX owns XAI. It's a subsidiary, a wholly owned subsidiary of SpaceX. Did a deal with Anthropic where Anthropic pays SpaceX more than a billion dollars a month to rent compute capacity from a data center,
a specific data center that it built in Tennessee. On paper, if you read the prospectus and the vision that we just outline, where SpaceX makes most of its money from selling AI software, that would make them on paper a complete rival on competitors Athropic. But this is what's so interesting. A lot of phone calls in the last five days from existing SpaceX investors saying it's so important to talk about how they've done this. They have data center capacity
that was available. They know Xai and SpaceX the parent are very good at building data centers quickly and running them, operating them efficiently on a very competitive dollar P token basis, So why not rent it out and make money? And that's the near term store that will dictate right now the stock performance and the valuation, because you know, the rest of it is so far away in another galaxy, et cetera.
Excellent pun and that's of course as we consider the performance as a public company. But ed you were just talking about speaking to existing SpaceX investors. This is obviously not a new company. It's more than two decades old. It's existed in private markets for some time, and there was a long time in which Elon Musk was saying,
we can just stay reliant on private capital. Walk us through that evolution and whether or not this is going to be a new model going forward as we consider more robust private markets.
Yeah, I think you know. Two thousand and two, SpaceX was seeded of about twenty seven million dollars and the goal was to make a rocket booster land back on Earth and be reusable. And now, clearly, as we've just discussed,
the stories really change. In twenty ten when Tesla went PubL the company, the public company that Elon mus is also CEO of SpaceX, had a billion dollar valuation and rapidly kind of twenty twenty three to twenty twenty five in the private markets, its valuation kept growing because it just dominated this business of launching payload to orbit and then Starlink, which is a Internet service but it's powered by a constellation of satellites around Panet Earth, has very
quickly become cash flow positive, cash generator. So you'll see all the Bloomberg stories and read the prospectus and say like how unprofitable SpaceX is and how disson it is, But in its connectivity business, actually it's a cash generating part of the business. And so you know, it's just a crazy story we don't have. You could do an entire twenty four hours on Bloomberg Television radio to explain
the history of it. But again, the point of the rocket business is that that next gen rocket it needs to work for all that other intergalactic out of this world's stuff to come true.
Well, I feel like Ed probably is going to end up spending twenty four hours on Bloomberg television and radio today. You're working hard. Thank you so much. Bloomberg Tech co host ed Ludlow