Charles Schwab CEO Rick Wurster Talks SpaceX, Future Big IPOs

**SPEAKER_1** (0:02)
Bloomberg Audio Studios, Podcasts, Radio, News.

**Lisa Abramowicz** (0:07)
SpaceX seeing historic appetite from retail investors, drawing over $370 million in demand since Friday. Charles Schwab was one of the firms that brought the listing to Main Street. Joining us now, I'm so pleased to say, is the Schwab president and chief executive officer, Rick Wurster. Rick, great to see you. Thank you for being with us. I wanna start just with how you see the retail investor's role in this particular IPO and how it highlights, in some ways, a changed market.

**Rick Wurster** (0:37)
Well, as a breakthrough event, I think for the retail investor, who has allocated roughly 20% of the deal, which is triple a typical IPO. So it's great to see retail having a meaningful seat at the table.
It created tremendous engagement with our clients and broadly with retail clients. Demand was off the charts and that demand continues. We've seen in the three days following the IPO, nearly $7 billion of additional orders come from our clients alone. So lots of interest, a great breakthrough for the retail client. Having a seat at the table was great to see.

**Lisa Abramowicz** (1:07)
There's a little bit of concern in some corners, albeit with skepticism, because you never want to bet against an entire crowd of people who are going in one direction. But Rick, there does seem like it's more kind of in vibes and support of the ideas of things rather than traditional valuations. Does that concern you, or does that frankly give you faith in the crowds, the wisdom of crowds, rather than Wall Street analysis?

**Rick Wurster** (1:33)
It's tough to know with foresight what the returns will be. But I think what's so exciting about the market is the level of innovation that you're seeing. And the retail investor sees that every day in their life, and they want to be a part of it. And so you're seeing tremendous interest in AI-related names and the space names.
I think it comes from the retail investor being able to touch and feel the level of innovation in our economy. And I think clearly they're holding names that are doing, stocks that are doing well with really strong fundamentals. Exactly what the returns will be, only time will tell.

**Annmarie Hordern** (2:07)
This was like a Super Bowl moment for financial markets. And we learned that there are war rooms. You set up various ones and you increased your team. Can you just give us some color? Where were you during all of this? What was the vibes like in these war rooms that you set up?

**Rick Wurster** (2:23)
It was a pretty amazing event in that it was one of the top five most active days for our clients in the 50-year-plus history of the firm. And if you think about all the market events we've had over those 50 years, for the IPO to crack the top five is pretty unbelievable. We had 140,000 clients call in live. We had lots of digital engagement. It was impressive to see. And our teams were fully staffed, ready and able to handle our clients' needs that day. It was wonderful to see the teamwork and the effort that went into making this a success on our side.

**Annmarie Hordern** (2:59)
How do you think this is going to establish potentially what's next when it comes to other mega IPOs like Anthropic and OpenAI?

**Rick Wurster** (3:08)
Hopefully it establishes retail having a really strong presence at the table. I think it's wonderful for the retail investor to be able to participate in something like this, so I hope this IPO establishes that. I think it also establishes an incredible level of interest among our client base for new and innovative technologies and being able to participate them.
We recently closed a deal with Forge, which allows our clients to invest in pre-IPO companies. So I think that the interest around these new ideas and emerging companies is quite high and will only continue.

**Lisa Abramowicz** (3:47)
Charles, Rick, the point that you just made is actually really important given the fact that people note that increasingly the value is being created before the IPO when companies are still private. Do you think that some of these IPOs will expedite the efforts to get access to retail investors into private markets through a whole host of different ways?

**Rick Wurster** (4:07)
I do think it will expedite it because people will have interest in getting in earlier because these companies are waiting far longer to go public. There's a lot of value being created while they're private and people want in. I know on the Forge platform, these companies were brought with much lower valuation. SpaceX in particular, I think first came to the Forge platform when it was roughly $60 billion in value. Those investors who were able to participate early at a $60 billion valuation are seeing it now well over $2 trillion and are enjoying the very significant returns that they had. I think more and more people are getting to see and experience these companies that are private. They're benefiting from a lot of their technology and they want a way to access the returns that are going to come from the innovation that they're driving. So I do think it will create more interest in private companies and we want to participate in that.