Blast Off: The SpaceX Float
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What is the main topic discussed in this episode?
Hello, I'm Alan Kohler, editor-at-large of Intelligent Investor and finance presenter, columnist and podcaster for the ABC.
And I'm Stephen Mayne, contributor at Intelligent Investor, founder of Crikey and shareholder activist.
And what are we, Stephen?
If you ask me, Alan, we are the Money Cafe, taking a brief break from the World Cup to record a cafe.
You're watching the World Cup, are you?
You're watching the World Cup? I'm loving it. I'm absolutely loving it. So the French just had a good 3-1 win over Senegal. So they'll be now the warm favorites after the Spanish couldn't even get over Cape Verdeau yesterday. Right. And what about those Australians? Actually, I missed the 5 a.m. block square AGM in the U.S. this morning. I set the alarm. I was all set to go to it and slept in. I just missed it. So I'm not going to sleep in and miss the 5 o'clock start for the Australia-U.S. game in – Seattle on Saturday.
Are you watching it?
Are you excited?
No, no. I'm afraid not enough happens at soccer for me. I mean, look, I did watch the Australia game the other day. Who was it against? Turkey. Turkey. Come on.
Gallipoli revenge. Gallipoli revenge.
It was huge.
The mighty Turks. We took them out.
We did. That's right. 2-0.
Yes. I think that was our greatest World Cup win looking back. I mean, there's been some rippers, but just the way that's captivated the nation, it was just absolutely magnificent. Patrick Beach, incredible goalkeeping. So, yeah, no, it was just fantastic. So, yeah, going to be a massive productivity drain on the world economy for the next six weeks. It goes on forever. Yeah.
Yeah. Oh, well. So what do you make of the SpaceX?
You can go back watching the bombers, mate. They're doing no good. SpaceX. Look, well, my one share, I've got one left. I bought four. I applied for 10, got four, sold three on the first day, and I'm left with one. It's closed at 206 this morning. So it's now popped 52% from the $135 float price. It went past Amazon today and briefly in intraday trading went past Microsoft.
Oh, did it?
I didn't realise that. The fourth... So it's now capped at $2.66 trillion. It's just done a $60 billion acquisition, paying in stock. They've bought a business called Cursor. And when you're paying in inflated stock, you can buy anything, Alan. That's right. So, I mean, I read your column on the ABC. It's just, I mean, you and I are on a unity ticket. The whole thing is just a hype, meme stock, ridiculous. But every day it goes up and every day we look more silly, don't we?
I guess eventually we'll look not silly. But look, yeah, I mean, it's as I think our mate James Thompson said, it's not really a company. It's an idea. It doesn't, you know, the sort of normal valuation methods don't apply here. It's just completely got nothing to do with it. Multiples of either revenue or profit. It's completely all irrelevant, really. The valuation of $2.66 trillion, you know, could be anything.
And the 505-page prospectus talked about the current revenues of $18 billion. And then we get a tweet over the weekend from Elon saying that he's going to do a trillion dollars in revenue by 2030. I mean, he should be getting arrested for that. I mean, he's put out a prospectus and then he just does a tweet saying, oh, I reckon we're going to get a trillion dollars in revenue. So it's a strange old world, Alan. I reckon in 2030 we'll be getting... Prime Minister Pauline Hanson, having just appointed Gina Reinhart to run the Australian Doge Department, doing a text congratulations of her mate Elon saying, well done for getting a trillion dollars in revenue. Elon in 2030. They said you'd never make it.
I mean, how can you just make a forecast like that?
I don't think he's going to make a trillion dollars of revenue in 2030. I just don't really see that happening somehow. Yeah. So, look, you're right. Gina's done well.
Gina's put a billion in and she's already half a billion in front, US, on paper.
That's right.
She jumped to the front of the queue. I thought, well, us ComSec people are getting scaled back, you know, 10 down to four, and there's Gina looping to the front of the queue with a billion US.
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