Jim Chanos Talks SpaceX IPO

**SPEAKER_2** (0:02)
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**Tom Keene** (0:12)
Welcome back to Bloomberg Money. I'm Tom Keene with Scarlet Fu. It is a very special edition here. Yes, on your personal finance, on your retirement. Scarlet, did you get your leverage ETF set up for SpaceX?

**Scarlet Fu** (0:25)
You know I can't do that. I am only passive.

**Tom Keene** (0:28)
You're very passive.

**Scarlet Fu** (0:28)
Passive investor only.

**Tom Keene** (0:29)
Nobody's gonna be passive with SpaceX this morning. We're seeing the pricing here with some stability are up 21% off the 150 level. This is indeed an honor. Joining us now, he's been extremely active on Global Wall Street in the last four or five days. James Chanos is with Chanos and Company, definitive on the street of a cautious view. Jim Chanos, honored to have you here. Let me just cut to the chase. What is this distinctive feature that makes SpaceX remind you of Enron?

**James Chanos** (0:59)
Well, I don't know that it reminds me of Enron, Tom, but it reminds me of the Enron timeframe. How's that? In that I've always said that Wall Street has a printing press too, just like the Fed. It just takes a while to get going.
One of the things that I think SpaceX is ushering in in 2026 is massive equity issuance. Historically, without a doubt, in the 20th and 21st century, anytime you have seen massive IPOs and secondaries relative to the size of the market or the economy, investors generally had been advised to be a little more cautious or reduce their risk. So 1999, 2000, 2021 for the first half of that year during the meme stock and SPAC craze, we are now going to break records in 2026 for IPOs and secondaries.
And SpaceX, of course, is the granddaddy kicking it all off in a big way. But we're going to see Open AI and Anthropic and probably some others. So we're going to shatter records. And so it's telling you that right now supply is meeting demand, which we haven't seen, by the way, in 23, 24, and 25 But we're seeing it now in 26

**Tom Keene** (2:15)
I look, Jim Chanos, at this and we've got a wonderful amount of time here with Mr. Chanos. So much to talk about. Scarlet's got some themes. I have some themes as well. Ed Ludlow fronted me. Did you see how he did that?
Ed Ludlow just stole my thunder here.

**Scarlet Fu** (2:28)
He needed to do it.

**Tom Keene** (2:29)
Chanos is thinking about the Neo Cloud. This is the team here, the New York Times article of a day or so ago, is SpaceX worth $1.8 gazillion dollars? XAI seems to be suddenly changing its business model from developing models like Grok to basically be coming in Ed Ludlow Neo Cloud. The entire evaluation rests on XAI's progress. The Neo Cloud strategy is a commodity business that is valued far lower on the public markets. Jim Chanos, to Isaac and the crew over at the New York Times. They're talking innovation, but you're predicting they'll go safe?

**James Chanos** (3:08)
Well, what's really interesting, Tom, is that about a week, ten days ago, the vast driver for the SpaceX TAM in their prospectus was the enterprise solutions for XAI, basically Grok, what the models produce, right, the software.
And instead, they basically did a 180 pivot and said, we are going to lease out our capacity to Anthropic and Google.
And that's the NeoCloud model, right? That's your equipment lessor. And that is a much lower valued business in the market place than being a model company or a hyperscaler. And we've been following data centers for a long, long time. And basically, it's a finance business, right? You're buying the chips from NVIDIA or somebody else, and then you're leasing them out to Anthropic or whatever. It's a rate of return business. It's not a super high tech business. Yet 22 plus trillion of the 29 and a half trillion of SpaceX, TAM, in their prospectus, is based on that business. And it just struck me as very, very odd that right before the IPO, they would pivot to a much lower margin and lower valuation business than the Hopes and Dreams, which you guys have mentioned, I've mentioned, is based on producing these wonderful AI agentic software products from Grok. And it's one of many head scratchers about this deal.

**Scarlet Fu** (4:40)
At what point does financial reality, the kinds of things you were just talking about, breaking down the numbers, become more important and matter more than the storytelling, the Hopes and Dreams part of it? Because that's what Elon Musk excels in. That's what people are buying in on.