June markets: SpaceX, ASX, S&P, sector performance + more
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What is the main topic discussed in this episode?
Today on the show, we are doing an economic update. We are recording this on Thursday, the 18th of June. We're starting about 11, 11.15am. And I'm joined by Gemma Dale from NAB Trade. Welcome to Money, Money, Money. Thank you for having me. What we're going to try and do is we'll talk about the SpaceX IPO. We'll talk about the market update. And look, we're going to have a lot of fun in between. If you find this episode useful, let us know in the comments. If you want us to do more of these, maybe get Gemarine to do a monthly update. I don't know. It could be fun. but primarily it will help if you're watching it on YouTube. But if you are driving or plowing with your tractor and you've got your headphones in, you'll get the gist of everything because we've got some charts and all that.
But thank you so much for listening. Let's get into it right now. Before we get into it, this show is general advice only. I've got a license to provide that advice. Full details can be found in the show description. My name's Glen James, former financial advisor. I host this show and a show called Retire Right. I've got some books, the award-winning Quick Start Guide to Investing and the Quick Start Guide to Your First Property available where good books are sold or in the description. If you're new here, welcome.
What is the SpaceX IPO and why is it significant?
If you're an old hand, welcome to M3. Let's get into it right now. Okay, Gem, we have launched. We've gone, let's get off this planet and launch out of here.
Data centers on Mars.
Yeah, so SpaceX IPO'd. I don't know. I've got a lot to say about it.
Yeah.
At the time of recording, the share price is up about 40%. Yeah. It's a lot of money.
Yeah. World's first trillionaire.
Yeah. They say the first trillion is the hardest, though.
It's been the hardest for all of us. I mean, we've really struggled to get there.
Yeah. I've got heaps of thoughts. Talk to us. What are you hearing out there? And there's a question here that we'll ask. Maybe I'll read it now because we'll swing back to it. Shantarella in our group said, hi, is anyone concerned about these IPOs that industry super funds will be forced to invest in like SpaceX, OpenAI, Anthropic? and their overinflated valuation risks. How do you opt out as an industry super member? So we'll talk about that.
Yes.
But over to you. What are your thoughts, opinion piece?
Look, it's an incredible one. And it is one that we also get a lot of questions about from investors leading up to the IPO. Can I get an allocation? I want exposure. Or the flip side of it, exactly what Chantarella was asking, which is, I don't want an allocation to this. And the reason that people were concerned about not wanting an allocation, generally, if something IPOs and you don't like it, that's cool. Just don't buy it, right? Just don't participate in the capital raise and don't participate on market. Just don't buy it. You're good. But with SpaceX, what has occurred is that NASDAQ in particular, but also FTSE Russell and also MISCI, have reviewed their index rules. So when you buy an index fund, now it's an ETF, right?
Used to be an index fund if you were around a long time ago. When you buy an ETF that tracks an index, generally speaking, they've got a whole lot of strict rules about when a company can or won't be included. Tesla's the classic example. Tesla was a top 10 company by market cap and was not in the S&P 500. And the reason it wasn't in the S&P 500 is it didn't meet the profitability requirements. And that's only one of the three requirements it had to meet. So there's a free float requirement, which is basically how much of the company is available on market versus how much is held by private investors. SpaceX, very little is available to the public market, even though it's the biggest IPO.
About 4.3% of SpaceX is listed.
Yeah, yeah, yeah, teeny tiny, right, relative to the amount that's still held by earlier investors. So there's a free float requirement. There's a profitability requirement. And that profitability requirement, Tesla just did not meet. It was unprofitable for a long time.
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