1 00:00:00,089 --> 00:00:03,170 SpaceX is either the greatest investment opportunity in a 2 00:00:03,250 --> 00:00:06,551 generation, or it's the most expensive mistake you'll ever make. 3 00:00:07,131 --> 00:00:10,972 Most people think it's a no-brainer. Elon Musk, rockets, Starlink, 4 00:00:11,072 --> 00:00:14,333 the future. But is it just all hype from 5 00:00:14,373 --> 00:00:17,654 an investment standpoint? Because SpaceX just filed for 6 00:00:17,694 --> 00:00:21,215 its IPO, its initial public offering, where it initially offers shares 7 00:00:21,235 --> 00:00:24,617 to the public. That's what IPO stands for. So the window to 8 00:00:24,657 --> 00:00:28,160 understand this opportunity is closing. My name's Lloyd Ross, multiple 9 00:00:28,180 --> 00:00:31,782 seven figure entrepreneur and investor, and I've helped thousands of everyday Australians 10 00:00:31,802 --> 00:00:35,065 to pay off debt, invest, build assets, and real wealth. 11 00:00:35,405 --> 00:00:38,547 And in this video, I'm gonna show you exactly how the 12 00:00:38,587 --> 00:00:41,829 SpaceX IPO works, how to access it, 13 00:00:42,170 --> 00:00:45,312 what it means as an investment for you, and whether it belongs in your 14 00:00:45,352 --> 00:00:48,694 portfolio or not. All right, so let's dig straight into it. Is 15 00:00:48,735 --> 00:00:52,076 SpaceX a good idea? And the reason we're doing this episode is 16 00:00:52,096 --> 00:00:55,697 because, of course, when incredible companies like SpaceX 17 00:00:56,417 --> 00:01:00,978 go to list on the stock exchange, it means we, the public, can buy legal 18 00:01:01,118 --> 00:01:04,199 equitable ownership of pieces of the business. That's what shares are. 19 00:01:04,219 --> 00:01:07,519 They're a share of a business. And what a business, right? 20 00:01:07,679 --> 00:01:11,140 And not in terms of the financials necessarily, but what it can do or 21 00:01:11,180 --> 00:01:14,341 what it's doing for human civilization. I would 22 00:01:14,461 --> 00:01:17,661 say there are few companies that are going to 23 00:01:17,721 --> 00:01:20,983 have an impact on the civilization to the extent that SpaceX is. It 24 00:01:21,163 --> 00:01:24,444 could, it's like the, it's like General Electric, it's like 25 00:01:24,564 --> 00:01:29,606 light bulb. This is one of the most incredible industrial 26 00:01:30,346 --> 00:01:33,547 developments of our race, of 27 00:01:33,587 --> 00:01:37,309 the humankind, right? It's that important. Because not 28 00:01:37,329 --> 00:01:40,630 too long ago, before Elon really spearheaded this, like a freak, after he sold 29 00:01:40,670 --> 00:01:44,051 PayPal for, well his share of PayPal for 300 million, he literally put, I 30 00:01:44,111 --> 00:01:48,093 think half into Tesla, And then he put half into SpaceX, 31 00:01:48,874 --> 00:01:52,056 the two most hardest things, rockets and electric cars, and 32 00:01:52,096 --> 00:01:55,718 has had tremendous success in both amongst other things. So this 33 00:01:55,778 --> 00:01:59,460 is a guy who means business, right? And the reason why he spearheaded that is because he discovered 34 00:02:00,021 --> 00:02:04,544 that the reason we haven't gone to space and back to the moon, etc., and 35 00:02:04,884 --> 00:02:08,447 kind of moved into that realm is because it's extremely expensive to launch rockets. 36 00:02:08,848 --> 00:02:11,970 The reason being is not just the fuel cost, of course, but it's actually the fact you've 37 00:02:11,990 --> 00:02:15,353 got to rebuild the rocket once you use it. And so it's like having a commercial 38 00:02:15,433 --> 00:02:19,577 airliner like a Boeing 747, and you fly to, say, London 39 00:02:19,617 --> 00:02:22,959 to New York, and then you get to New York, and then you've got to just throw the plane out. 40 00:02:23,740 --> 00:02:26,963 Like, could you imagine how expensive tickets would be if you had to do that? 41 00:02:27,303 --> 00:02:30,986 But that's what happened to space effectively, right? So, what 42 00:02:31,026 --> 00:02:34,489 he discovered through development of the Raptor engines, development of 43 00:02:34,529 --> 00:02:38,071 the rocket design, and of course, as we know, the 44 00:02:38,112 --> 00:02:41,594 ability to bring it back to Earth and land it, whether it be in the ocean, on a 45 00:02:41,654 --> 00:02:45,037 pad, or on land, or even 46 00:02:45,077 --> 00:02:50,469 tweezers, because the Starship, which is the largest flying 47 00:02:50,609 --> 00:02:53,890 object ever created by mankind. He brought it back to Earth 48 00:02:53,970 --> 00:02:57,171 and caught it in these, you know, this docking bay, which is effectively two, like, 49 00:02:57,411 --> 00:03:00,812 two big steel tweezers. And they did it the first go, which is amazing. 50 00:03:01,172 --> 00:03:04,433 But if you've been following Elon's journey with SpaceX, it's been very incredible to 51 00:03:04,473 --> 00:03:08,014 watch, very inspiring, of course, and great for civilization. Okay, 52 00:03:08,034 --> 00:03:12,453 so they've been able to cut rocket development and redeployment cost 53 00:03:12,473 --> 00:03:15,757 by 90%. So it really cuts, cut the cost of 54 00:03:15,797 --> 00:03:19,661 going to space by 90%. The third launch was 55 00:03:19,721 --> 00:03:22,884 where it was either, they had enough money for the third launch and if that 56 00:03:22,924 --> 00:03:26,307 had failed, they would have been game over. And they 57 00:03:26,347 --> 00:03:29,628 did it. So we were a breath away from not having this. And 58 00:03:29,788 --> 00:03:33,209 it may have set civilization back a long way. So thankfully, God 59 00:03:33,229 --> 00:03:36,991 was in our corner, or in Elon's corner, and it happened. Then 60 00:03:37,011 --> 00:03:40,372 they were able to bring it back to Earth, which is crazy, right? So now, I think 61 00:03:40,412 --> 00:03:44,593 he's launching rockets all the time. Bang, bang, bang. So he's really commercialized 62 00:03:45,373 --> 00:03:49,035 Space, right? He spearheaded that. And 63 00:03:49,115 --> 00:03:52,277 so as part of that process, they developed these offshoots too, you know, 64 00:03:52,317 --> 00:03:55,999 like it made putting satellites into orbit cheaper. 65 00:03:56,859 --> 00:04:00,461 It enabled going to the space station cheaper. He recently just rescued 66 00:04:00,501 --> 00:04:03,843 people who were stranded in the space station. It's just being 67 00:04:03,883 --> 00:04:07,265 able to access space a lot more affordably has created 68 00:04:07,345 --> 00:04:11,149 other industries like, you look at Starlink, which is effectively a 69 00:04:11,189 --> 00:04:14,691 series of satellites that just put internet down to the earth through a Starlink device 70 00:04:14,731 --> 00:04:18,133 anywhere, which is amazing. It's connected remote 71 00:04:18,173 --> 00:04:21,455 communities like never before. It's connected people during war. It's connected people 72 00:04:21,475 --> 00:04:24,878 during disaster. It by itself has been a byproduct of 73 00:04:24,918 --> 00:04:28,600 the success of SpaceX, right? There's like, I think there's 9 million subscribers 74 00:04:28,640 --> 00:04:32,719 now in Starlink alone, so he's got these other Businesses 75 00:04:32,759 --> 00:04:36,462 that have you know? Developed off the side of it, which is completely 76 00:04:36,482 --> 00:04:39,724 changing how we live right Starship is 77 00:04:39,764 --> 00:04:42,946 the is is purported to be the vehicle that takes us 78 00:04:42,966 --> 00:04:46,128 to Mars, and it seems like now That's an actual real or 79 00:04:46,849 --> 00:04:50,131 so what's that is very audacious is now becoming more measurable and 80 00:04:50,171 --> 00:04:53,993 achievable right so you can see that SpaceX is changing 81 00:04:54,393 --> 00:04:58,136 the arc of human civilization period right 82 00:05:00,066 --> 00:05:03,870 But here's where the conversation changes 83 00:05:03,950 --> 00:05:08,195 when you start to consider it as an investment. So 84 00:05:08,215 --> 00:05:11,438 before I jump into the numbers and just talk about what it looks like, 85 00:05:11,799 --> 00:05:15,095 I have to explain this to you. This is 86 00:05:15,175 --> 00:05:18,717 not the first industrial revolution we've experienced, okay? So 87 00:05:18,737 --> 00:05:22,198 you have these new technologies adopted and we 88 00:05:22,218 --> 00:05:25,419 have this rush to develop it, compete with it, whatever it 89 00:05:25,439 --> 00:05:29,521 might be, because, you know, people don't realize this, but SpaceX has competitors. Blue 90 00:05:29,561 --> 00:05:32,762 Origin is a big competitor and Jeff Bezos developed that company out of the 91 00:05:32,782 --> 00:05:35,904 profits from Amazon and they also launched to orbit. So it 92 00:05:35,924 --> 00:05:39,205 already has competitors. It's not the market owner of the entire 93 00:05:39,225 --> 00:05:42,406 market, okay? Because when there's profits to be made, you 94 00:05:42,446 --> 00:05:46,025 can bet your bottom dollar there'll be competition. So 95 00:05:46,065 --> 00:05:49,846 when there's an industrial revolution, I want to give you an example. When railroads 96 00:05:49,906 --> 00:05:53,367 became the, oh my god, I can't believe we can cross America in this time frame, 97 00:05:53,487 --> 00:05:56,588 in this locomotive. This is mind-blowing. It's like going to 98 00:05:56,608 --> 00:05:59,729 Mars. It's like, whoa, right? So that's happened. And 99 00:05:59,749 --> 00:06:04,471 so when you look at the industrial revolution, certainly industrial developments, 100 00:06:04,931 --> 00:06:08,612 there's a bubble scenario that happens where a lot of capital runs 101 00:06:08,652 --> 00:06:11,793 to that area for fast investment returns. There's this 102 00:06:12,053 --> 00:06:15,134 first mover advantage that happens. So the railroad is 103 00:06:15,154 --> 00:06:18,614 developed. And you could even say that United Pacific Railroad 104 00:06:18,634 --> 00:06:22,057 is one of the first few that was opened by Lincoln in the 1800s. 105 00:06:22,397 --> 00:06:26,281 But all of a sudden, there was like 200 railroad companies joining the fray. And 106 00:06:26,321 --> 00:06:29,383 of course, when you invested in railroads, in stocks, a lot of 107 00:06:29,403 --> 00:06:33,647 people lost a lot of money. Because just because it's good for civilization doesn't 108 00:06:33,727 --> 00:06:37,450 mean it's good for your portfolio. The same can be said for airplanes. When 109 00:06:37,471 --> 00:06:41,554 the Wright brothers lifted off, I think it was in 1906, thereabouts, They 110 00:06:41,574 --> 00:06:44,915 lifted off and created flight for the first time. Now, fascinatingly, 60 years 111 00:06:44,935 --> 00:06:48,756 later on the moon. Incredible developments. But, if 112 00:06:48,796 --> 00:06:52,317 you had invested into airlines back then, there was so many different airlines 113 00:06:52,437 --> 00:06:55,798 developed and competed with, that if you had to put your money in there, the chances 114 00:06:55,838 --> 00:06:59,259 you went bankrupt are extremely high. It was almost probably 100%. Because 115 00:06:59,459 --> 00:07:02,560 airlines are an awful, awful investment for return on 116 00:07:02,600 --> 00:07:06,561 capital. They burn through capital. They don't generate additional 117 00:07:06,601 --> 00:07:10,063 capital returns. Railroads, airlines, 118 00:07:10,343 --> 00:07:13,785 motor vehicles. There were in early 1900s when motor vehicles 119 00:07:13,805 --> 00:07:17,328 were adopted commercially and horses became, you know, obsolete. 120 00:07:18,348 --> 00:07:24,580 There was 200, 200, 200 car manufacturers in the United States alone. And 121 00:07:24,620 --> 00:07:28,121 guess what? There was two. And one went bankrupt in 122 00:07:28,381 --> 00:07:31,702 2008, which is GM. There was one, which is Ford. It's the only one left. So 123 00:07:31,722 --> 00:07:34,884 you had to pick one in 200, right? So this is what 124 00:07:34,944 --> 00:07:38,245 happens when there's an industrial bubble. And this will continue 125 00:07:38,265 --> 00:07:41,366 to happen. The dot-com bubble happened with internet companies. You could say the 126 00:07:41,406 --> 00:07:45,107 same thing is happening in the crypto markets. You could say the same thing in 127 00:07:45,307 --> 00:07:48,988 the AI space right now. It's a wash with capital because 128 00:07:49,068 --> 00:07:52,549 people, they mistakenly think that new and 129 00:07:52,750 --> 00:07:56,311 innovative is good investment, and that is absolutely 130 00:07:56,371 --> 00:07:59,591 not correlated, just so you know. Because I gave you the examples, how 131 00:07:59,611 --> 00:08:03,412 you put your money in those things, you're lost, right? So that's 132 00:08:03,712 --> 00:08:07,373 important for you to understand, right? Just because it's new, doesn't 133 00:08:07,393 --> 00:08:10,654 mean it's a good investment. They're really clear, right? So let's 134 00:08:10,674 --> 00:08:13,755 have a look now at SpaceX, the business, because if we're going to 135 00:08:13,775 --> 00:08:17,276 assess whether it's good for our capital to buy shares in this business, we 136 00:08:17,316 --> 00:08:20,510 have to understand the business. That's what you've got to do, right? So let's 137 00:08:20,530 --> 00:08:24,755 have a look. 2024 revenues of SpaceX around about, call 138 00:08:24,835 --> 00:08:28,380 it $13 billion. Last year, 2025, about 139 00:08:28,880 --> 00:08:32,345 $15 billion. I believe now in 2026, it's probably 140 00:08:32,385 --> 00:08:35,949 around $20 billion. I'm just giving you some highlights here 141 00:08:35,989 --> 00:08:39,281 so you can understand why. it's not really worth, 142 00:08:39,481 --> 00:08:43,425 I haven't really taken the time to invest deeply because it's not worth my time because it doesn't tick 143 00:08:43,445 --> 00:08:46,568 the boxes at all for me to deploy capital for investment. So I'm not 144 00:08:46,588 --> 00:08:49,811 gonna waste my time. But I am gonna explain a couple of things that makes it 145 00:08:49,851 --> 00:08:53,167 an automatic no, okay? Doesn't mean that people 146 00:08:53,187 --> 00:08:56,569 aren't gonna do it, but I just wanna showcase for you how quickly 147 00:08:56,589 --> 00:09:00,011 you can identify, ah, it's just out of my remit, yeah? Because 148 00:09:00,031 --> 00:09:03,393 you don't have to swing at every pitch, as Warren Buffett says. You wait for the fat pitches 149 00:09:03,413 --> 00:09:06,556 come down and swing at what you understand, what you know, and what's gonna scale over 150 00:09:06,596 --> 00:09:09,778 time into the future, so you don't have to make decisions on when you should sell. And 151 00:09:09,798 --> 00:09:13,080 that's the real guts of how good quality investing, certainly how 152 00:09:13,160 --> 00:09:16,442 I do it, and how others like Buffett have done in the past. So, 153 00:09:16,542 --> 00:09:20,264 here we go. It earns about 20 billion. in revenue, that's 154 00:09:20,364 --> 00:09:23,685 top line sales revenue, okay? And the 155 00:09:23,745 --> 00:09:28,426 current private valuation, they say is around 800 billion, 156 00:09:28,446 --> 00:09:31,627 okay? If you were to buy 157 00:09:31,647 --> 00:09:35,588 it privately now. The IPO target, so when a company IPOs, 158 00:09:36,048 --> 00:09:39,589 an investment bank underwrites the shares and underwrites the offering, and 159 00:09:39,629 --> 00:09:43,450 then goes to the public through the exchange and attracts attention 160 00:09:43,570 --> 00:09:46,812 to get investors to put their money in to then basically give 161 00:09:46,872 --> 00:09:50,814 money to the owners. Because when a company IPOs, like SpaceX, Elon, 162 00:09:50,834 --> 00:09:54,015 who owns I think all of the company, well, doesn't own all of it, Google owns some of 163 00:09:54,076 --> 00:09:57,557 it, et cetera, there's some private investors that have added 164 00:09:57,597 --> 00:10:00,799 equity capital to the valuation, but he owns a lot of it. So when he 165 00:10:00,979 --> 00:10:04,841 sells to the marketplace on an exchange, he's actually exiting. He's 166 00:10:04,961 --> 00:10:08,203 exiting a portion of his ownership of the business. He's 167 00:10:08,263 --> 00:10:11,345 selling a percentage ownership, and it might be 40, 50, 60% of the company or 168 00:10:11,385 --> 00:10:14,687 more, He's selling that 169 00:10:14,727 --> 00:10:18,052 to the public and he's taking the money in return. Does that make sense? He's 170 00:10:18,112 --> 00:10:21,496 actually selling a portion of his ownership to the public. That's how it works. He'll 171 00:10:21,536 --> 00:10:25,602 retain ownership and a lot of owners retain 20% or whatever 172 00:10:25,622 --> 00:10:29,167 it is of their company. So they've got ownership and control. They want to own more than 20% to 173 00:10:29,207 --> 00:10:32,471 exert control at the board level. generally. So that's 174 00:10:32,571 --> 00:10:36,057 how it's an exit from the private equity. And it's also 175 00:10:36,137 --> 00:10:39,262 a way to capitalize the company with the new 176 00:10:39,322 --> 00:10:42,487 proceeds. So when they sell part of the company, they get cash in 177 00:10:42,508 --> 00:10:46,770 return. And let's say an IPO is 1.5 billion. Sorry, 178 00:10:47,390 --> 00:10:50,552 1.5 trillion, which is what they're estimated it's going to IPO at, and some even say 179 00:10:50,872 --> 00:10:54,254 2 trillion. You say, okay, well, they've sold X amount, 180 00:10:54,274 --> 00:10:57,516 say 50% for 2 trillion, they've got a trillion in cash, just 181 00:10:57,716 --> 00:11:00,938 bang in the company. Like, now we can really expand, now 182 00:11:00,958 --> 00:11:04,399 we can build multiple Starships, now we can do this, now we can get more stuff, now 183 00:11:04,439 --> 00:11:07,621 we can invest in the company. So then they take those funds and they 184 00:11:07,641 --> 00:11:11,623 start to then deploy that to grow the business. This is how Private 185 00:11:11,663 --> 00:11:15,366 companies become public companies, and this is why they do, so they can grow. They're 186 00:11:15,386 --> 00:11:18,688 taking capital from the public to say, guys, we're on mission here, 187 00:11:18,708 --> 00:11:21,890 we've got this great opportunity, give us your money and we'll grow. Now, 188 00:11:22,390 --> 00:11:26,133 as a shareholder, do you think that 189 00:11:26,473 --> 00:11:30,696 at $20 billion of revenue, that SpaceX's 190 00:11:30,736 --> 00:11:34,919 valuation of $2 trillion is fair and equitable? Do 191 00:11:34,939 --> 00:11:38,161 you think you're buying a business that's undervalued? Do you think it's a business that's 192 00:11:38,181 --> 00:11:42,475 going to last? And the reality to these questions is, one, We 193 00:11:42,555 --> 00:11:45,937 don't yet know or can see what the net income of this business 194 00:11:45,977 --> 00:11:50,360 is going to be. We also don't know in the next 10, 15, 20, 30, 50 years 195 00:11:50,420 --> 00:11:53,842 if it's going to exist. We just don't know these things. This is so difficult to 196 00:11:53,882 --> 00:11:57,944 determine. The reason why the $2 trillion market IPO 197 00:11:58,064 --> 00:12:01,666 estimate is around is because people are pricing 198 00:12:01,846 --> 00:12:04,994 in that SpaceX is going to 199 00:12:05,034 --> 00:12:08,516 be the absolute market leader, dominate the 200 00:12:08,576 --> 00:12:11,938 market position of space travel and space logistics and 201 00:12:13,058 --> 00:12:16,340 the income that that type of market share 202 00:12:16,380 --> 00:12:19,962 can generate, just from that business alone, they're obviously saying 203 00:12:19,982 --> 00:12:23,984 that's going to be a lot. And they want to own a piece of that. And 204 00:12:24,024 --> 00:12:27,165 I know it makes sense, it does. It's like, wow, that's amazing. But let's understand this 205 00:12:27,205 --> 00:12:32,786 for a second. At $2 trillion valuation, It's 206 00:12:32,826 --> 00:12:36,217 like, what's that? A hundred times? A 207 00:12:36,338 --> 00:12:40,293 hundred times sales. You 208 00:12:40,313 --> 00:12:43,435 know, to put that in perspective, don't beat 209 00:12:43,455 --> 00:12:46,737 me up in the comments for this, but we have a laundromat business, I've mentioned it before. We 210 00:12:46,757 --> 00:12:50,300 bought that for 1.5 times sales. So our earn back on 211 00:12:50,340 --> 00:12:54,262 a revenue standpoint is 1.5 years. And earn back from sales 212 00:12:54,342 --> 00:12:57,585 to valuation of this company, if it IPOs at 213 00:12:57,805 --> 00:13:00,987 2 trillion, is 100 years. That's on revenue, not even on 214 00:13:01,087 --> 00:13:04,309 earnings. If it's on earnings, it could be 100. So the 215 00:13:04,489 --> 00:13:07,951 public is, or the market is anticipating that this company will 216 00:13:07,992 --> 00:13:11,514 generate profits so high that they 217 00:13:11,574 --> 00:13:14,897 still think it's a good deal even at $2 trillion. Does that make sense? So 218 00:13:14,937 --> 00:13:19,822 let's put a gauge right on the ground here. Let's understand 219 00:13:19,842 --> 00:13:23,194 what they're asking for and 220 00:13:23,394 --> 00:13:26,535 what the opportunity is. So here you have, in the 221 00:13:26,555 --> 00:13:29,657 investing world, you have your capital, your money, and you have 222 00:13:29,977 --> 00:13:33,619 all these opportunities in the investing universe, different types of assets. Whenever 223 00:13:33,639 --> 00:13:37,041 you invest in one thing, you say no to another thing. And the whole objective 224 00:13:37,061 --> 00:13:40,243 of investing is to buy a bush that 225 00:13:40,303 --> 00:13:43,684 has some birds in it, you hope, and what's the likelihood 226 00:13:43,704 --> 00:13:46,866 that you're going to get the birds out? Bird in the hands, worth two 227 00:13:46,886 --> 00:13:50,271 in the bush. That's investing. The 228 00:13:50,331 --> 00:13:53,434 challenge with SpaceX is we don't know how many real birds and net income are going to 229 00:13:53,454 --> 00:13:57,098 come out of the bush and we don't know when. And we don't even know if the bush is going to be around. Who knows? 230 00:13:57,418 --> 00:14:00,662 It's a new industry, right? Let's look at a bush that's 231 00:14:00,762 --> 00:14:04,043 been around for, say, 20 years. or 232 00:14:04,083 --> 00:14:07,668 thereabouts, and let's look at the birds in that bush, let's 233 00:14:07,688 --> 00:14:11,171 look at the valuation of that opportunity that you can buy today in the marketplace, and 234 00:14:11,212 --> 00:14:14,635 let's then assess where your money is better spent. Here's 235 00:14:14,655 --> 00:14:18,260 the example. Investing is best done when you compare 236 00:14:18,540 --> 00:14:22,404 two things with each other. Should you put your money here or here? So 237 00:14:22,424 --> 00:14:25,565 let's look at Meta. Meta is obviously the 238 00:14:25,625 --> 00:14:29,285 company that owns Facebook, Instagram, and WhatsApp as the core apps. They've 239 00:14:29,305 --> 00:14:32,446 got three billion people or subscribers to their apps, and 240 00:14:32,526 --> 00:14:35,987 they generate a tremendous amount of free cash flow and run by Mark Zuckerberg, 241 00:14:36,047 --> 00:14:39,768 okay? So one of the most profitable companies ever built. And 242 00:14:39,988 --> 00:14:44,228 owner led, founder led, and by all accounts, yeah, generating tons 243 00:14:44,268 --> 00:14:47,489 of free cash flow. Selling for a very reasonable price, right? So have a look at this. 2025 revenue 244 00:14:47,529 --> 00:14:53,166 for Meta, 200 billion, okay? So 245 00:14:53,206 --> 00:14:57,609 we have SpaceX, 20 billion. Meta, 246 00:14:58,470 --> 00:15:03,773 200 billion in revenue. 10 times more revenue. SpaceX 247 00:15:04,114 --> 00:15:07,996 valuation upon IPO is between 1.4, 1.5 to 248 00:15:08,877 --> 00:15:12,339 2 trillion. Meta, current 249 00:15:12,500 --> 00:15:15,782 market cap, if you bought the whole company, currently selling on the exchange, you can buy shares 250 00:15:15,822 --> 00:15:18,944 in today, 1.45 trillion. So if you look at 251 00:15:18,964 --> 00:15:23,021 that very closely, Both 1.45 trillion, roughly 252 00:15:23,241 --> 00:15:26,783 1.5 trillion. One's got 20 billion revenue, one's got 200 billion 253 00:15:26,823 --> 00:15:29,986 revenue. Which one 254 00:15:30,006 --> 00:15:36,510 are you buying? Does that make sense? SpaceX 255 00:15:36,570 --> 00:15:40,011 more or less earns 13 times less revenue than Meta, and SpaceX is 256 00:15:40,051 --> 00:15:43,492 roughly valued at the same price. That's what we're trying to understand here, okay? 257 00:15:44,212 --> 00:15:47,593 And what's interesting about that is we know, we 258 00:15:47,633 --> 00:15:50,974 already know that Meta generates income. We know it generates return 259 00:15:51,014 --> 00:15:54,215 on capital. We know that it's a proven product. We know that it's already got 260 00:15:54,295 --> 00:15:57,755 competitors. We know that those competitors haven't killed it. We know it 261 00:15:57,795 --> 00:16:01,277 doesn't rely on contracts from NASA. It relies 262 00:16:01,357 --> 00:16:04,820 on payments from the public for its advertising business and 263 00:16:04,880 --> 00:16:08,143 its subscription-based businesses. And it's got a lot of untapped potential in 264 00:16:08,183 --> 00:16:11,345 its WhatsApp enterprise, etc. And it's proven to 265 00:16:11,385 --> 00:16:15,510 be able to pivot when things got hard. So 266 00:16:15,530 --> 00:16:18,613 we have a very, we have a proven bush with birds in it 267 00:16:18,653 --> 00:16:22,176 that we know how many birds are coming back. We have that. So that's our option. You 268 00:16:22,276 --> 00:16:25,358 either buy Facebook for seven times revenue or do 269 00:16:25,378 --> 00:16:28,721 you buy SpaceX for whatever it is, huge amounts of multiples of revenue. 270 00:16:28,941 --> 00:16:32,885 Like which one do you buy, right? And so that's 271 00:16:33,025 --> 00:16:36,488 the, that's how you ought to assess investments. And 272 00:16:36,528 --> 00:16:39,750 I think a lot of people are gonna treat the SpaceX investment because 273 00:16:39,770 --> 00:16:42,948 of the excitement and this, image in 274 00:16:42,968 --> 00:16:46,250 their head that, oh, they're going to own space, or I want a piece of it. It's going to compel them 275 00:16:46,310 --> 00:16:49,571 to overpay for something that they don't 276 00:16:49,731 --> 00:16:53,013 really truly know the value of. Because generally with IPOs, the objective of 277 00:16:53,053 --> 00:16:56,815 the investment bank, too, is to pump up the price and get maximum 278 00:16:56,875 --> 00:17:00,697 price. They want to sell those shares at a maximum price. Very 279 00:17:00,737 --> 00:17:03,898 much similar to when you buy a car. They want to sell that new car to you 280 00:17:04,038 --> 00:17:07,980 at the highest price possible, even though when you drive it off, it's worth half, whatever. It's 281 00:17:08,020 --> 00:17:11,462 the same. So generally speaking, not always, but 282 00:17:12,262 --> 00:17:16,004 IPOs are notorious for selling 283 00:17:16,364 --> 00:17:20,006 shares to the public for the company at an extremely 284 00:17:20,106 --> 00:17:23,748 high nosebleed valuation. That's almost 285 00:17:23,788 --> 00:17:27,447 criminal. Just so you know. Some 286 00:17:27,507 --> 00:17:30,829 examples of where that's happened and I've seen it happen and I've even suggested not 287 00:17:30,969 --> 00:17:34,050 doing it to people just in passing and they still do it. I'll give you a 288 00:17:34,090 --> 00:17:37,252 few examples here. When F45, and I know 289 00:17:37,312 --> 00:17:40,753 these companies are different to SpaceX, I understand, but it's the same emotional 290 00:17:40,793 --> 00:17:44,035 reaction. When I was doing F45, I said, you know, Jim, 291 00:17:44,055 --> 00:17:47,577 if you don't understand what an F45 studio is, it's fitness, group fitness. It's 292 00:17:47,597 --> 00:17:51,685 one of the first group fitnesses to scale. It IPO'd. Right, 293 00:17:51,805 --> 00:17:54,988 it went IPO and I think they IPO for 600 million and 294 00:17:55,008 --> 00:17:58,211 the shares at the time was selling for $17 each. It IPO at 295 00:17:59,011 --> 00:18:02,354 $17 a share and one of the trainers was like, I bought shares, I bought shares, 296 00:18:02,374 --> 00:18:05,617 did you buy any shares? I'm like, I wouldn't touch that with a 10-foot pole. Like, 297 00:18:05,637 --> 00:18:08,940 why not? I'm like, I work here as well, I love the code. Like, you 298 00:18:08,960 --> 00:18:12,062 don't understand IPOs, like you just got ripped off. And then now if you 299 00:18:12,082 --> 00:18:15,777 go and look at F45 shares, there's 6 cents. You 300 00:18:15,797 --> 00:18:19,498 went from $17 to 6 cents, they're never gonna get their money back. So 301 00:18:19,558 --> 00:18:22,919 this is a very good way to lose money. If you wanna throw money on the fire and burn it, go and invest 302 00:18:22,939 --> 00:18:26,440 in IPOs. And I, same thing can happen with GoPro. And 303 00:18:26,460 --> 00:18:29,581 so my brother-in-law said, I think I'm gonna buy shares in GoPro. I'm like, why? He goes, because I use 304 00:18:29,621 --> 00:18:32,842 GoPro, I love it. I was like, ah, I probably wouldn't do that. He's 305 00:18:32,862 --> 00:18:36,143 like, okay, cool, I'll take that on board. And he didn't, which is great because I think it IPO'd at, 306 00:18:36,163 --> 00:18:39,984 I don't know, it was like $200 a share. Now it's like, I don't know what it is now, I think it's two. I 307 00:18:40,024 --> 00:18:44,105 think it's just like a hundred times less and you're never gonna get your money back. And 308 00:18:44,126 --> 00:18:48,462 there's countless examples of that. If 309 00:18:48,502 --> 00:18:51,765 you even went into call to chat and said, what's the percentage of people that really make, 310 00:18:51,845 --> 00:18:55,628 generate long-term returns from IPOs? This is not a great deal, okay? 311 00:18:55,808 --> 00:18:59,370 Just quickly, if you're ready to take control of your finances but feel stuck on 312 00:18:59,391 --> 00:19:03,073 where to start, I have a solution. My book, Money Buys Happiness, 313 00:19:03,534 --> 00:19:06,736 simplifies investing and wealth building with practical steps to help 314 00:19:06,756 --> 00:19:09,859 you achieve financial peace. Get your copy via the 315 00:19:09,899 --> 00:19:13,181 link in the show notes and let's get your money working for you. Now back 316 00:19:13,201 --> 00:19:16,504 to the episode. So is SpaceX an effective company for 317 00:19:16,544 --> 00:19:20,547 civilization? Yes. Does it make money? Yes. Will 318 00:19:20,567 --> 00:19:23,771 it continue to prompt profits in the future? It looks like it will. There's a high 319 00:19:23,811 --> 00:19:26,874 likelihood, but we don't know. Starling a great business? Yes. Will it 320 00:19:26,894 --> 00:19:30,137 continue? Probably. To what extent? We don't know. 321 00:19:30,577 --> 00:19:34,181 Right. So there's just a lot of unknowns. 322 00:19:34,742 --> 00:19:38,303 And what we definitely know is that if we don't know those things, then 323 00:19:38,384 --> 00:19:41,925 how do we really know if it's worth $2 trillion as 324 00:19:41,965 --> 00:19:45,627 a whole company? And the alternative argument 325 00:19:45,647 --> 00:19:49,149 to this question is, well, Lloyd, it's got almost supreme market 326 00:19:49,169 --> 00:19:52,651 share. It's run by the craziest, most intelligent, flippant entrepreneur 327 00:19:52,671 --> 00:19:56,393 of all time. It's got a ton of investment from 328 00:19:56,913 --> 00:20:01,372 people like Google, et cetera. I think Google owns 7%. It's 329 00:20:01,492 --> 00:20:04,734 likely to print. I'm like, sure. But what do the competitors look like 330 00:20:04,754 --> 00:20:08,057 in the next 10, 20 years? What is the return on capital of those investments they 331 00:20:08,097 --> 00:20:11,779 make? Because if you think about what they're going to spend money on, rockets, fuselages, 332 00:20:12,539 --> 00:20:15,841 missions to Mars stuff, it's going to burn through a ton of capital. So 333 00:20:15,882 --> 00:20:19,404 this company might rely on multiple share 334 00:20:19,465 --> 00:20:23,169 raises, so where they can sell more shares. And just 335 00:20:23,269 --> 00:20:26,533 doing that all the time to afford this mission to Mars is 336 00:20:26,573 --> 00:20:29,777 going to dilute the current shareholders more and more 337 00:20:29,797 --> 00:20:33,301 and more and more. Because if they keep selling more shares and more shares to raise more capital to 338 00:20:33,381 --> 00:20:36,524 burn to get to Mars, which they look like they're going to, there may 339 00:20:36,564 --> 00:20:39,887 not be a commensurate return for you, but also you're going to dilute the current shares that 340 00:20:39,927 --> 00:20:43,710 are outstanding. There's going to be so many of them. So you could see this $2 trillion 341 00:20:43,750 --> 00:20:47,093 valuation, it may not fall, but certainly with dilution it 342 00:20:47,113 --> 00:20:50,295 may not also grow. So you may keep your money in there for quite a long period of 343 00:20:50,335 --> 00:20:53,758 time until there's good long-term net profits and it really commands and owns 344 00:20:54,899 --> 00:20:58,362 its market space. It's very difficult to know, which 345 00:20:58,422 --> 00:21:02,199 is also why It doesn't really 346 00:21:02,239 --> 00:21:05,441 get my attention to deploy capital because there are 347 00:21:05,481 --> 00:21:08,603 too many unknowns. And I want to impart this lesson to you. 348 00:21:08,663 --> 00:21:12,705 The objective of investing is not to punt. There's this 349 00:21:12,745 --> 00:21:16,167 great metaphor that Warren Buffett uses. He says, he's 350 00:21:16,207 --> 00:21:19,746 not looking for 10-foot bars to jump over. Meaning 351 00:21:19,886 --> 00:21:23,509 he's not looking for something very complex like this to figure out. What 352 00:21:23,569 --> 00:21:26,811 he's looking for is one foot bars he can step over. 353 00:21:27,511 --> 00:21:30,713 So an example would be he's looking for say, let's go throw this up there, 354 00:21:30,733 --> 00:21:34,015 a company that's worth a trillion that's selling for 355 00:21:34,035 --> 00:21:37,716 a hundred billion. He's looking for a company you can buy, where 356 00:21:37,736 --> 00:21:41,199 they've mispriced their real estate assets, and you can get it for free. He's 357 00:21:41,219 --> 00:21:44,342 looking for basically to buy dollar bills for 50 cents with no risk. That's what he's 358 00:21:44,362 --> 00:21:47,966 looking for. And he did that recently with these Japanese companies. 359 00:21:48,006 --> 00:21:51,109 He bought them for, you know, probably a third of 360 00:21:51,129 --> 00:21:56,714 what they're worth, if not more, and they've been around since 1850. He's looking 361 00:21:56,734 --> 00:22:00,473 for that, because he's looking for certainty. and 362 00:22:00,513 --> 00:22:03,697 he's looking for certainty at a cheap price. And this is the 363 00:22:03,797 --> 00:22:07,722 opposite of that. There's a lot of uncertainty and a very rich price. So 364 00:22:07,782 --> 00:22:11,146 this is the opposite of what Warren Buffett, the greatest investors 365 00:22:11,187 --> 00:22:14,330 ever lived, does. And I think that just imparting this 366 00:22:14,431 --> 00:22:18,356 wisdom to you will help you understand why this 367 00:22:18,416 --> 00:22:21,540 type of thing doesn't get my attention, but also why it 368 00:22:21,580 --> 00:22:24,945 does get a lot of people's attention, because they get emotionally brought 369 00:22:24,965 --> 00:22:28,290 into the mission, they want to be part of it. And they see a chance 370 00:22:28,350 --> 00:22:31,895 to make considerable amounts of profits in the future. And they have seen that happen in Tesla, 371 00:22:32,115 --> 00:22:36,770 even though Tesla is about Hunt 372 00:22:37,330 --> 00:22:41,993 100 it's probably you know 20 times overvalued It 373 00:22:42,093 --> 00:22:45,616 really shouldn't be at the valuation. It's a it's like a the peer multiples about 374 00:22:46,176 --> 00:22:49,418 200 which means it takes 200 years to earn back its its market cap 375 00:22:49,438 --> 00:22:52,921 and income and They've but they've seen that this is cult following with Elon where 376 00:22:53,181 --> 00:22:56,383 the public doesn't care they just pumping money into the stock price and 377 00:22:56,423 --> 00:22:59,805 I think that the house cards will fall on that at some point and 378 00:22:59,905 --> 00:23:03,368 That's a very difficult investment journey to go on because 379 00:23:03,408 --> 00:23:06,591 you're trying to ascertain the future with 380 00:23:06,631 --> 00:23:09,837 a crystal ball and you can't, and you're going to watch this stock price go up and down 381 00:23:09,857 --> 00:23:13,084 and it's going to send you insane and you're just not going to find this rhythm in 382 00:23:13,164 --> 00:23:18,860 building capital. Just out of my experience, okay? It's 383 00:23:18,940 --> 00:23:22,124 not a new story. This has happened before. It happened with Cisco in 384 00:23:22,585 --> 00:23:26,489 2000, as I said, with the dot-com bubble. It happened with railroads. It's happened with cars. This 385 00:23:26,890 --> 00:23:29,973 is an industrial evolution for 386 00:23:30,013 --> 00:23:33,377 humankind. It doesn't necessarily dictate good idea or 387 00:23:33,437 --> 00:23:37,958 good way to certainly compound my capital. The 388 00:23:37,978 --> 00:23:41,480 same can be said for many, many other examples that I won't go into. So 389 00:23:41,540 --> 00:23:45,262 what we have to understand is, is it a good company? Yes. Is 390 00:23:45,302 --> 00:23:49,585 it a great company? Yes. Is it insanely good for humankind? Absolutely. Is 391 00:23:49,625 --> 00:23:53,007 it a company that's really set up for good investment? I 392 00:23:53,047 --> 00:23:56,869 don't think so. So you can be 100% right 393 00:23:56,889 --> 00:24:00,171 on a good company, but you can be 100% wrong on 394 00:24:00,231 --> 00:24:03,493 whether it's deserving of your capital. Does that make sense? 395 00:24:04,213 --> 00:24:07,904 So let me finish with this question. Should 396 00:24:08,144 --> 00:24:12,595 you participate? Should you bother? This 397 00:24:12,635 --> 00:24:15,998 is why you watch this channel, to get an idea of really what 398 00:24:16,659 --> 00:24:20,062 goes on with why don't I touch that, right? So here's my 399 00:24:20,202 --> 00:24:24,806 absolute honest take on it, right? I personally don't 400 00:24:24,907 --> 00:24:28,089 touch IPOs, period. It's just a rule. So I don't even 401 00:24:28,129 --> 00:24:31,453 consider it. So like when there's an IPO, I go, stripe IPOs, this IPO, 402 00:24:31,493 --> 00:24:34,796 that, doesn't matter. It just doesn't even, it doesn't 403 00:24:34,836 --> 00:24:38,199 make it through that first litmus test. So straight away, boom, right? 404 00:24:39,793 --> 00:24:42,995 And you can look at other things and say, well, Google owns and so forth. Well, if you want to have some 405 00:24:43,035 --> 00:24:46,297 exposure to SpaceX, what you could do 406 00:24:46,758 --> 00:24:49,940 is you could hold Google. Now, if you look at Google, even though 407 00:24:49,960 --> 00:24:53,482 it's priced at about 26 times current earnings, which is not cheap, 408 00:24:53,902 --> 00:24:57,225 for a company that owns like the Android phone market and 409 00:24:57,765 --> 00:25:01,668 has market leading positions in like four to five big categories, and 410 00:25:01,708 --> 00:25:05,010 it owns a bit of SpaceX and Anthropic and so forth. So if you look at that, and 411 00:25:05,030 --> 00:25:08,332 Warren Buffett owns it, he's got like four billion or five billion in Google stock. So 412 00:25:08,392 --> 00:25:11,553 if you have a look at that, You can get exposure to 413 00:25:11,573 --> 00:25:14,754 SpaceX for Google. Now that's a more intelligent approach. That's 414 00:25:14,794 --> 00:25:18,495 how I would get it. If I wanted any exposure to SpaceX, I'd 415 00:25:18,535 --> 00:25:21,896 consider it through a Google exposure because you're getting 416 00:25:21,956 --> 00:25:25,096 some there but you're getting a broad base of wonderful businesses under the 417 00:25:25,176 --> 00:25:28,577 one banner of Google and it's selling for a fairly reasonable 418 00:25:28,617 --> 00:25:31,878 price based on its current ability to print profits. And 419 00:25:31,898 --> 00:25:35,078 it's got great leadership. So I think that's a more sensible approach to it. 420 00:25:35,098 --> 00:25:38,619 Don't get caught up in this whole hype. Well, 421 00:25:38,639 --> 00:25:42,140 I don't have my own rocket company. Well, just 422 00:25:42,200 --> 00:25:45,261 know that you're on the losing end of that deal when an IPO is, 423 00:25:45,301 --> 00:25:50,722 just so you know, okay? The crowd will follow and rush, institutions 424 00:25:50,742 --> 00:25:53,963 will go with it too, and you'll get caught up 425 00:25:53,983 --> 00:25:57,564 in the fray and you'll probably get killed. And if you do make money, you're trying 426 00:25:57,584 --> 00:26:00,765 to repeat it, thinking you're smart, and then you'll lose money in the next 427 00:26:00,865 --> 00:26:04,286 IPO. So I actually don't think there's a win-win outcome here. 428 00:26:04,606 --> 00:26:07,887 I think there's actually a lose-lose. I don't think it bodes well. It's 429 00:26:08,007 --> 00:26:11,967 not what I'd approach. It's not how I'd do it. So where I land on this is, magnificent 430 00:26:12,007 --> 00:26:15,088 company, one of the great companies of our era. I want it to 431 00:26:15,148 --> 00:26:18,849 succeed. It will succeed. Starlink will succeed. It will succeed. Optimus, 432 00:26:18,909 --> 00:26:22,010 I mean, well, let's say Elon's doing anything, it'll succeed, right? I want to go to 433 00:26:22,050 --> 00:26:25,571 Mars too. But I would not buy SpaceX in an IPO 434 00:26:26,611 --> 00:26:29,652 just because of that. So I hope that makes sense. I hope that gives you a bit of 435 00:26:29,692 --> 00:26:33,114 an understanding of how I come to that decision and 436 00:26:33,174 --> 00:26:36,598 how you can too. Because part of this channel and 437 00:26:36,818 --> 00:26:40,507 our podcast is to just give you some some 438 00:26:40,627 --> 00:26:44,289 boundaries to play within that's gonna not wreck you because wealth 439 00:26:44,309 --> 00:26:47,391 building is a long game and we wanna keep you moving and growing. So 440 00:26:47,411 --> 00:26:50,912 I hope that makes sense. I'd love to know, what do you think about the SpaceX 441 00:26:50,972 --> 00:26:54,094 IPO? Are you buying any? What's your alternative position on 442 00:26:54,134 --> 00:26:57,456 that? What did you take away from this episode the most? I'd love to know in the comments. Leave 443 00:26:57,476 --> 00:27:00,677 me a question or a comment below. I'll come back and reply. And of course, if you haven't done 444 00:27:00,717 --> 00:27:04,019 so, boom, boom, hit the subscribe button so you get notified straight away and share