SpaceX's $1.75T IPO (LIVE from NYSE)

**Mo** (3:03)
Welcome to a special edition of our Space Defense Update, because SpaceX is about to go public in a few days, right, Jack?

**Jack** (3:11)
IPO-ing on Friday. Long time coming with this business, so we're gonna have a very exciting 90 minutes of chatting about SpaceX.

**Mo** (3:19)
Yes, this is the biggest, I think, I mean, arguably the biggest single moment that the space industry has seen in a very, very long time.

**Jack** (3:27)
Yeah, yeah. And we have a great cast today, some great guests that are going to come on to chat about it. I think first, let's set the stage, talk about what the terms are. This is coming up in two days.
I can run through some of the headlines that have come about in the last couple of days, couple of weeks that have really changed the story with the IPO. So let's do that before we bring on the guests. But 90 minutes of SpaceX.

**Mo** (3:53)
Let's go. Let's do it.

**Jack** (3:54)
Okay.

**Mo** (3:54)
So for anyone just tuning in or waking up under a rock, so SpaceX is going public on Friday. At least that's a target. That's what we all expect. They're raising $75 billion. They're offering about half a billion shares, 555.6 million shares at a current price of $135. Books are closing Wednesday night, so orders are coming in between now and Wednesday night effectively. Currently, it's running oversubscribed.
The rumor I've heard so far is that it's about two times oversubscribed, which we'll talk about what that means later in the show, whether that's good or bad. And then importantly, retail is getting a 30% allocation. And now typically in these types of, well, typically in IPOs, you have like a 5 to 10% retail allocation. So this is a substantially higher allocation that retail is getting, and for a whole host of reasons we'll talk about. But since the S1 came out, we've, I mean, there's been a flurry of news, which we should, I guess we should talk about before we start.

**Jack** (4:51)
Yeah, let's cover that and then we can bring our guests on. But to set the stage, as you've done with the with the financials that we saw in the S1, last year SpaceX generated $18.7 billion of revenue on heavy cash burn. In the last month, I'm going to read this off right now. We did a show, touched on some of the SpaceX story a couple of weeks ago, but a lot has changed since. So just last week, SpaceX announced a deal with Google, where Google is going to pay $11 billion per year for data center rental.
It looks very similar to the Anthropic deal that was announced. At least the terms are announced in the S1. So if you combine the $15 billion of essentially ARR that's coming in from Anthropic, plus the $11 billion from Google, that brings additional $26 billion of ARR into the business, which more than doubles the current business. So when we talk about revenue multiples, we could talk about it in terms of that $19 billion from last year, but I think it's more appropriate to look at it, and the valuation looks a lot more reasonable when we look at it from an annualized basis by the end of the year.

**Mo** (6:01)
Yeah, I mean, I think, look, what was it last year, $18 billion?

**Jack** (6:04)
$18, $19 billion.

**Mo** (6:06)
So $18.7 billion to be exact, so it's 33% year-over-year growth. You already have about $25, $26 billion from the Compute Deals. Let's just assume a 40% growth on the business XAI, meaning X, X-A-I.
And so that puts the launch on Starlink around $21 billion. So really you can say that like $26 is looking like it's coming around $50 to $60 billion. I added some buffer in there in case, I don't know, they announce a Compute Deal with like a Facebook or something, which at this point, I have to imagine there's gonna be at least one or two more Compute Deals.

**Jack** (6:41)
Potentially, potentially. But another piece of headline that dovetails into this is Cursor. So they have the option to buy Cursor. Cursor just hit $4 billion of ARR last week. That is an additional $1 billion from a month ago. So their revenue run rate is growing similar to what we saw. I'm not saying the magnitudes are very different, but similar to what we saw with Anthropic and OpenAI at the beginning or a few years ago. So that deal, SpaceX has an option to buy Cursor, that deal should close shortly after IPO, and that could add another $10 billion of ARR, annualized revenue, to the SpaceX story by the end of the year. And that, you know, I think once you look at it, once you look at probably north of $60 billion of annualized revenue, the multiple then looks to be around 30 times revenue, which Tesla is trading at, and has for a long time, has traded at 15 times revenue.