The Hidden Risk Inside SpaceX

**Kara Swisher** (0:00)
You would go to the moon?

**Bethany McLean** (0:01)
Well, I wouldn't go myself, but I wouldn't mind having another place for humanity to flourish.

**Kara Swisher** (0:05)
I don't want to live on the moon. I mean, it's a good song, but Tim.

**SPEAKER_3** (0:08)
Okay.

**Tim Higgins** (0:09)
Well, first of all, how do we define a city on the moon? Because I think it's in the details there.

**Kara Swisher** (0:15)
It's a self-growing city, Tim.
Hi everyone from New York Magazine and the Vox Media Podcast Network. This is On with Kara Swisher and I'm Kara Swisher. We're talking about SpaceX. That's Elon Musk's rocket slash satellite, Internet slash AI company. Its mission, according to its IPO filing, is to quote, extend the light of consciousness to the stars. But before that happens, the company needs to address more practical concerns like making money. And today we're going to get into all the ways the unprofitable SpaceX is making and losing money. SpaceX debuted on the Nasdaq in June with the largest IPO ever, raising a record $86 billion.
But the stock has been on a wild ride this summer. It's attracted interest from short sellers or investors betting against the stock, adding to the volatility. The company weathered its first earnings report last week pretty well, actually, and it's even managed to hold most of its value after more than 900 million shares that had been locked up became tradable. But that doesn't mean it's smooth sailing ahead. I've gathered a panel of experts to dig into SpaceX's business and why it matters. I think it's critically important to talk about SpaceX because the question is, is it Enron? Will it cause an enormous problem in the stock market, given how many different things Elon's done to try to prop up the stock? Or is it really going to be one of these groundbreaking companies that will break through? It's a great question and there's a lot to discuss here. Ed Elson is an analyst, writer, and co-host of ProfG Markets Podcast from the Vox Media Podcast Network. Tim Higgins is a business columnist for The Wall Street Journal, CNBC contributor and the author of books including iWar, Fortnite, Elon Musk, Spotify, WeChat, and Laying Siege to Apple's Empire. Bethany McLean is a contributing editor at Vanity Fair. She's also a columnist at Yahoo Finance and a contributor to CNBC. She's the author of books including The Smartest Guys in the Room, The Amazing Rise, and Scandalous Fall of Enron. Our expert question today comes from Aswath Damodaran, a professor of finance at the Stern School of Business at NYU, who's also known as the Dean of Valuation. So stick around.
One more thing before we get into it, I'm going to be doing a live taping of On at the Odoo Experience Conference in San Francisco on September 2nd. You can register for the conference on their website. We'll drop a link in the description for this episode.
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**Kara Swisher** (4:35)
Ed, Tim and Bethany, thanks for coming on On.

**Tim Higgins** (4:37)
Thank you.

**Bethany McLean** (4:38)
Thank you.

**Kara Swisher** (4:39)
Ed.

**Tim Higgins** (4:40)
Thank you.

**Kara Swisher** (4:42)
This is a great topic and it's a look into Wall Street in general, what's happening right now around tech stocks. But volatility has defined SpaceX's run since going public in June. It was the biggest public offering that we've had in forever. When we're taping on this Tuesday morning, shares are trading around $135 a share, up a little bit, but around where it went public in. We'll get into the investors who are betting against the company in a moment, but first make the bullish case for SpaceX. What's driving the value? Let's be fair to Elon. Ed, you go first and Bethany and then Tim.