SpaceX Wavers Near $2T Market Cap After 3-Day Rout

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Bloomberg Tech 46 min 11 speakers 8 chapters transcribed 5 days ago
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What is driving SpaceX’s share price dip and the debut bond sale?

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Yeah.
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Bloomberg Tech is live from the heart of Silicon Valley with Ed Ludlow in San Francisco.
Ed Ludlow 0:55
This is Bloomberg Tech coming up. SpaceX shares feeling gravitational pull as Must Company launches its debut bond sale. Plus, tech stocks sell off worldwide as Wall Street gets an AI wake-up call. Is the AI boom sustainable? And we go big on private markets. Menlo Ventures raises its biggest ever haul with $3 billion to back AI startups. Partner Venki Gennison joins us on set. San Francisco. The headline on the Bloomberg is that Wall Street gets an AI wake-up call, but there has been a global sell-off in technology shares. It started Monday in the US, but in Korea overnight is where it was felt most. The Cosby, the best performing index in the world so far this year, dropping 10% from a record high. It is Samsung, it is SK Heinex, which led questions about the sustainability of the AI trade.
Ed Ludlow 1:45
Let's go over to the US session where actually we're off session lows, but there is still severe selling. The SOX is down 7%, the NASDAQ 100 is down 2.6%. All of this about sustainability, durability of what's happening in AI. Our top story: SpaceX shares. The stock actually briefly dipped below $150, which was its trading debut price from June 12th. We're getting new details. On the company's first ever bond offering, a five-part investment grade deal expected to raise at least $20 billion and rank among the biggest debt sales of the year. The sale would primarily refinance debt while also giving investors a fresh look at how Elon Musk companies are funding growth across AI, satellites, and space. Joining us now, the team, Bloomberg Senior Markets Reporter Bay Lipscholz, and Emily Grafeo on the corporate credit side.
Ed Ludlow 2:34
Em, let's start with you. What do we need to know about this debt sale, the structure of it, the terms?
Unknown 2:38
Well, look, we need to know that this deal is probably going to be one of the biggest investment grade bond seals of the year. And it already got $30 billion of demand even before the deal was announced. It's pricing later today. Uh bankers are taking orders from investors right now. We do expect the deal to go pretty well. So even though the stock is down today at this uh bond sale, expect it to be successful, and it's getting an investment. Grade rating. Despite the fact that SpaceX is saying it's going to be blowing through cash here, really what the ratings analysts are focusing on is the fact that they have recurring revenue from their Starlink business. They have a dominant launch provider central to the US space program.
Unknown 3:18
And of course, they have access to enough liquidity to keep funding that AI expansion. So it's a unique investment grade rating here, but one that at least for right now investors are putting their competent. confidence behind.
Ed Ludlow 3:29
Bailey, on yesterday's programme, BI credit analyst Robert Schiffman said equity investors trade on hope. Looking at the stock now up almost three percent in the session, but briefly in negative territory, we're all talking about it hitting its trading debut price. What's going on in this post IPO trade? Edward.
Bailey Lipschultz 3:47
We're just still seeing supply and demand trying to be matched. Obviously, you had the euphoria of listing day retail traders continuing to plow through the stock last week. As we saw it hit a bit of an airpock and we see the volatility today, we still have to remember that we're only looking at about 5% of the flow available for trading. So we're still well ahead of the lockup when insiders and long-term investors and uh long-term employees are able to be selling the stock.

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