Tech Trade Under Pressure; Musk Sells His Vision of the Future

**SPEAKER_2** (0:02)
Bloomberg Audio Studios, podcasts, radio, news. Bloomberg Tech is live from coast to coast, with Caroline Hyde in New York, and Ed Ludlow in San Francisco.

**Ed Ludlow** (0:22)
This is Bloomberg Tech coming up. Elon Musk enchants investors with his vision of the future, whose questions about the SpaceX IPO are brushed aside at an investor event. Plus, coming in hot, jobs surge in May, but tech stocks are under pressure as investors reassess the path for interest rates. And three of the biggest names in AI, at Bloomberg Tech, San Francisco. We're going to bring you those conversations throughout the program. SpaceX's IPO is absolutely dominating the news cycle, but there is so much happening in financial markets, and a lot with the tech sector. The S&P 500 is down a percentage point, really the under performance is in chip stocks. We're down 4.7% on the stocks. Interestingly, we're still positive on the week, but everyone kind of talking about chips and saying we are due a correction. Actually, outside of chips, the rest of the AI trade is getting hammered. Those jobs numbers for May were hot. US 10-year yield, 4.5%.
So, bad news, guys, I'm sorry, I know it's Friday. The S&P 500 is down on the week, and that means that it will not, as it stands, hit a historic 10th week of gains. It will stop short at 9 straight weeks. Again, the SpaceX IPO, the immanency of the pricing next Thursday, and the trade following, that is a big factor in the market. It is going to be some form of catalyst, and volatility is being very closely watched. Let's get to our top story. Elon Musk enchants investors.

**Tom Keane** (1:46)
Why SpaceX public now? Because you had choices, you didn't have to. Why now?

**Elon Musk** (1:51)
We're embarking on a massive new growth base, and we need capital for that.

**Philip Johnson** (2:03)
Okay, number two.

**Elon Musk** (2:05)
Another thing is, the revenue, like, I also feel pretty good about, like, the revenue projections. I mean, like, before, like, the revenue was a little unstable.

**Ed Ludlow** (2:16)
Elon Musk still has the power to sell a vision at a SpaceX investor event yesterday, hosted by Jamie Dimon at JP Morgan's headquarters. Talk of the company's future, overshadowed questions about the IPO itself. The absolute latest this morning is Bloomberg reporting that this IPO is already way oversubscribed. There are a number of other pieces of news you have to get to. Bloomberg's Craig Ruedel is with us. I actually want to start just with last night, you were manning the desk, managing the team of like, okay, what is new and what Elon Musk is saying here?
What's the big takeaway that we need to know about? And what's an unusual pre-IPO pitch on stage, so to speak?

**Craig Trudell** (2:53)
I found last night's LoveFest between Diamond and Musk as fascinating. It's not often that you see Jamie Diamond struggle to get a word in. And yet we saw a little bit of that where, it took time for Musk to get through his answers and he was quite long winded and they had some fun about that as we saw in that clip.
I think also Musk was pretty forthcoming about this notion that what's driving this is that he needs capital. And we saw this week as well, even at Alphabet, this notion that a company of that size, that is that cash generative still is going out to raise $80 billion with the backing of Berkshire Hathaway. So I think this is part of this broader movement by Bloomberg Tech companies and by AI hyperscalers to raise it absolutely as much money as they possibly can, given just how intensive this race has become.

**Ed Ludlow** (3:52)
If you're watching Bloomberg Tech and you're coming to this story fresh, that's a surprise, but basically SpaceX is on a road show right now, and they plan to do final pricing of the IPO next Thursday. They've already said $135 a share, raising more than $75 billion.
At a $1.77 trillion valuation, this will be the biggest IPO of all time. Craig, you're the managing editor that kind of leads coverage of the company, I appreciate that. But there is some kind of market mechanics things that are really important in the news cycle. One being that SpaceX and these other IPOs waiting in the wings will not get fast-tracked into the S&P 500 Can you talk a little bit about that and why that matters?

**Craig Trudell** (4:30)
Yeah, I think that's a setback, but I think it's also the case that the S&P is deciding differently from some other indices. And so, the NASDAQ has taken a different approach. And so perhaps there will be some indexes where you and I, if we're invested in index funds, we'll get a piece of this company. And it's just a matter of some sort of spacing out of when we'll see demand for these shares from various institutional investors.