FULL TRANSCRIPT

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Slava Rubin (00:00)

Hello and welcome to the latest briefing.

Thank you everybody for joining. My name is Slava Rubin. I'm one of the founders here at Vincent. We're looking to democratize access to alts and give you all the information you need. You could check out our newsletter at withvincent.com. And we of course are very excited to have our pre-IPO briefing series. Today we're gonna be discussing SpaceX and we have none other than Jan-Erik, co-founder of Sakura. Welcome Jan-Erik. Thanks Slava, excited to be back.

Yeah, so we've already had a few conversations about some other companies, but so many of you have asked about SpaceX. Should you get in? What does the business really do? How come I keep hearing about it in the news? And what about this price? There's some sort of discussion about a tender at $350 billion. So we're gonna be diving in today and have a really thorough discussion about SpaceX. This conversation is brought to you by Upmarket, our partner today. And we're gonna be discussing a few topics. First, we're gonna go over the business.

Second, we're gonna talk about the future. And then lastly, we're gonna really be diving into the price and the pre IPO aspects and prospects. But let's make sure everybody's on the same page. So nothing in this presentation should be construed as an offer to sell or as a solicitation of an offer to buy securities. All investments involve risk and the possibility of loss.

including loss of principle and neither past performance nor forward-looking information is a guarantee of future results. All right, and now let's hand it off to you, Jan-Erik, take it away.

Sweet. All right. Quick overview here. So SpaceX, when it was first started, the entire space industry was dominated by government contractors, companies like United Launch Alliance, which is a partnership between Boeing and Lockheed Martin. If you went into space, these are the guys who got you there. This was like $200 million per launch type economics. SpaceX was founded in 2002 by Elon Musk, most people know.

It's completely changed the sort of space landscape today. but they want the cost to launch a rocket on SpaceX is about a third of other providers. They launch every three days a new rocket, whereas Boeing and Lockheed launch about eight to 12 a year. They serve NASA, DoD, commercial operators of satellites, their own satellite operation. And today they capture about 60 % of the global market for all

rocket launches.

Revenue wise, I mean, it's a huge business. It's staggering. They were doing less than 2 billion during COVID for reference. They hit 8.7 in 2023 and we're estimating about 14.2 billion for 2024. So it's been a huge ramp up. And one of the really remarkable aspects of it is the diversification of revenue. So it was purely launch services as a business. They would sell NASA launches, sell DoD launches.

And over the last several years, they've grown the Starlink business to be now more, you know, it's 58 % of revenue to 42 % for launch services. So we'll talk about this a lot more, but it's become a huge driver of the business.

And the valuation ramp has been just as kind of immense. As you mentioned, there's been a tender in December at a $350 billion valuation. That was almost double from their previous valuation of 180, which was also set in 2024. So huge ramp up. It's like a 25X multiple on that $14 billion estimate. So 25X, yeah, it's pretty rich. mean, Tesla is like 18X. NVIDIA is like 50.

And so we'll talk about this more, but yeah, the valuation question is definitely a big one. So yeah, I think that sort of captures the basics. Yeah, so we hear about SpaceX in all kinds of ways, right? We hear about taking over NASA in terms of launches. We hear about it that it is like the highway and the logistics machine to send

cargo up into space, specifically like satellites and other things. All of a sudden, we then start hearing about Starlink, which I'm going to love you for you to explain what is Starlink and what's the difference between Starlink versus what people traditionally think of SpaceX as the rocket launches. But then you hear about Starlink all of a sudden about the Ukraine war, where the Ukrainians are using it. There's fires in Los Angeles. And all of a sudden I hear about Starlink being used to be able to do the reporting because cell towers

are down and then now for 2025 and there's discussion about Starlink being in our airlines where we're gonna be using Starlink as part of United or these other airlines. So can you just explain to me like what is the difference between the space launches and Starlink? Like what are those two businesses? Yeah, they're very different but they sort of emerge from the same fundamental place. So as SpaceX made

the cost of launching rockets cheaper and cheaper. One of the ways that they started sort of productizing that into a new business was by doing a lot of launches of their own satellites. And there's a really key difference between Starlink satellites and what you generally think of when you think of satellite phones today, or if you go on an airplane that has normal in-flight Wi-Fi, it's incredibly slow. It's like you really can't do anything on

airplane Wi-Fi. And the reason is because those satellite providers are connecting to a single satellite, something like 22,000 miles above the earth. And what SpaceX did, what Starlink did differently was launch a sort of wide mesh network of low earth satellites. So they are less than a thousand miles above the earth. And they are in this kind of

long network that spans the entire globe. I think it's around seven to 9,000 satellites now. And because they're so low, it enables this incredibly low latency of connection. So you can be on an airplane and get better wifi than if you were at home. And so this has really emerged into a, I mean, separate business that is using SpaceX infrastructure to sort of bootstrap itself and launch these rockets at very low cost.

But other than that, they're sort of different in that they have different competitive sets. There's some overlap, but it's just a very powerful business that's been able to exist enabled by SpaceX and owned by SpaceX, as it were. So in short, they were able to create this rocket launch system, which then they put on their own satellites. And now they put up seven to 9,000 satellites around the earth. And now for all intents and purposes, they're creating one of the most impressive communication networks.

to compete with Verizon and all the others around the world, potentially globally, is that fair? Yeah, there's, I mean, there's various segments. on one, you know, consumer, it's the home, the residential internet. And that's been the biggest driver in terms of, you know, how many subscribers, I mean, it's like near 4 million people use this at their home. And I know my grandparents in Finland, you know, where they live, even in Finland, which is a technologically advanced country.

Starlink is the option a lot of people use in rural areas. And it's that same story around Europe and the United States where they're sort of biggest. But then there's also maritime. So Maersk uses Starlink on their ships so that the crew can communicate with the outside world. It's being seen a lot more in in-flight Wi-Fi. There's like four major airlines right now that have it. And United Airlines is rolling it out on their entire fleet.

and they're sort of starting that right now. So yeah, it's any situation where you need connectivity. So it is competitive with like Verizon and your ISPs residential. think where we're seeing the more, where we're seeing the strongest kind of market share being eaten up is in these other, you know, more enterprisey markets. So a lot of these companies that are high flying tend to just lose money out the nose.

Can you give a sense of kind of the unit economics of how the space launch and Starlink business is doing? Yeah, so they've released at various points, little hints that they're they're operating at near breakeven or breakeven on the SpaceX core business. Starlink would be doing a little bit better than that, I think.

sort of on an ongoing basis. There's some of the upfront launch cost to factor in, yeah, it's one of the aspects of the business that's a little bit unclear, but they've released a lot of statements that suggest that they're at or near breakeven on the business now. Who should we be thinking about as our competitors for the two core businesses, the launching and let's call it the telecom? Yeah, yeah, yeah. That's a great question. So on the launch services side, you have

kind of the traditional aerospace. have ULA, which like I mentioned is a Lockheed and Boeing collaboration. You also have emerging players. So there's Blue Origin, which is the Jeff Bezos founded, you know, sort of SpaceX competitor. And then you have some other, you know, have state actors in China and elsewhere. And you have some other

sort of startups. Relativity space is one doing 3D printing for components to do rockets even cheaper than SpaceX, that kind of thing. The upshot is that really SpaceX has something like 80 % of all commercial launches, like 9,000 satellites in the air versus hundreds for their competitors. There isn't really significantly

there isn't really significant competition at parity with them on either the launch business or the satellite business. There's been a lot of talk about project, not even sure how to pronounce this, Kuiper, and how that can use sort of Blue Origin's rocket infrastructure to also launch cheaply into space. But I believe the New Glenn rocket, which is Blue Origin's, I don't believe it's actually launched.

They called off a launch this morning, which is a test. competition wise, SpaceX has really put themselves way out front in terms of making progress. Starlink is not the first satellite comms business, right? It's been around for decades in different companies and different iterations. Why is Starlink doing so great? And what does this mean for competitors such as VIA SAT, et cetera, et cetera? Yeah.

The sort of big ones in this space, have VESAT, IntelSAT, GoGo. GoGo is the one you probably see most often if you're flying on an airplane. They use these extremely high earth satellites. Like I mentioned, it's very slow. The bandwidth is very low. your whole plane of people cannot connect at the same time. They have to sort of segment it out so that only people who pay a certain amount

can access full speed. And even then, they're throttling the speed constantly. It's a terrible user experience. And it's very similar for satellite internet services everywhere else. The key difference is that Starlink has, instead of on the satellite where you're limited by the bandwidth to that satellite, you're connecting to many different ones. And you're switching off one satellite and onto another as you traverse the Earth if you're on an airplane or on a boat.

they're also much lower to the ground. instead of, you know, 700, 800 milliseconds round trip to get data to the satellite and back, it's like 20 to 40, which is, I mean, that's basically best in class for, you know, earthbound cable internet. It's a massive difference. So this feels a little bit like Nvidia to me. And what I mean by that is they invested into

like the atoms and the bits, and they created innovation that was just years ahead of others. And then all of a sudden the market caught up and said, know what, we need this. And then all the competitors were like, no, we're reliant on just Nvidia. And now piles of money are going in to try to compete with Nvidia. Yeah, Nvidia's still crushing it. Who knows what that market will look like. Let's call it three, five years from now. So similarly, what do you think about the launches and satellite business? How far ahead is SpaceX? Are they?

six months ahead, six years ahead, 16 years ahead? Like what's your sense of the future and market share dynamics and competition in the five years going forward? Yeah, it's certainly, I mean, if you think about SpaceX has been testing launches of Falcon 9 for like slightly over a decade and maybe the closest startup competitors, Blue Origin, who are sort of yet to get close. mean, five to 10 years,

It's like a massive difference. I I have to say that with some degree of uncertainty because who knows basically if you have these very powerful state apparatuses that want this technology themselves. Obviously there will be diffusion over time, but it does seem like, I would say with a lot of SaaS companies, that information is very diffusable.

Like you said, if it's just on the bits layer and SpaceX has been sort of been able to hire and keep the best talent in the space for two decades. So from here, it looks like a pretty unassailable, yeah, five, 10 year type lead on the sort of core business where it's hard to see, it's hard to see Blue Origin catching up or, know, Arian space in Europe who two years ago they were saying, you know, that

landing a rocket and then reusing it was impossible. And that's the CEO of the biggest space competitor in Europe. So it seems like they figured things out and built a sort of self-perpetuating machine of both talent and sort of ability to conquer technical obstacles. Right, you're saying that because SpaceX actually did create a rocket that was able to launch and then self-land. Yeah.

I should mention that a few years ago. mean, yeah, if you haven't seen it go on YouTube, it's insane to watch a rocket land straight up. And yeah, so they're doing that. Because historically a rocket kind of was disposable. Quite expensive, SpaceX has tried to figure out how to make it reusable. So just to put you on the spot, 2030, know, six years from now, is there a strong competitor?

Hmm. That's a good question. I don't think so, but I do think there will be multiple players. give me the two names that you think will be your top players. Hmm. Anything else? I yeah, I think probably, I think blue origin will be relevant. I can see that. And then I think that you'll have, these players like the Chinese sort of state, you know, launch facility will be important, because states want to have their own capabilities.

Okay, well, let's talk a little bit more about SpaceX projections. And obviously when I say the word SpaceX, I'm including the entire entity, including Starlink. So what do you think of as like the bull case? What does that bull case look like? What does the bear case look like? What do you consider kind of your concerns? Take it wherever you'd like. Cool. Yeah. So I think a lot of the bull case hinges on two things. One is Starlink subscriber growth and really

getting a huge foothold across households, international markets. They're doing partnerships with, you sort of reference the cell partnerships, Starlink into cars, to drones, and continuing to grow market share in sort of ships, maritime, aviation, that kind of thing. I think the optimistic scenario, sort of bold case for SpaceX is that that really continues to take off.

and then on the other side, there's sort of Starship, which is their next gen of, launch vehicles and that reducing the price of launch from, you know, 60 odd million to 10 and having full reusability, having the ability to bring far larger payloads into space and having the ability to spin up some of this, some of the sort of tan expansion stuff around SpaceX in terms of commercial manufacturing, I think,

that bull case basically hinges on will they continue to sort of barrel through technical obstacles? Will there be sort of regulatory room for them to operate and then, you know, sort of execution risk, basically continuing their current trajectory? I think that the more cautious scenario, you could say, you know, Starlink doesn't really take off for whatever reason. There are some technical, you know,

There are some technical challenges there that they'll have to sort of overcome. There's FCC approval they'll need to do to get more satellites into space. And then Starship, if this next gen of launch vehicles doesn't work, delays or slowing demand, they continue to have high costs, then I think they start to look more like another launch provider among many, maybe the best one.

but sort of limited to that. What's the subscribers today for Starlink? About four and half million, up from like 2.3 last year. And what was it year before that? Do you know? It was about half. So let me just make sure. about one. So they're approximately doubling each year. So if they only hit 10 million,

in 2030, I mean, that would be a dramatic slowdown, right? Yeah. 10 million in 2030. Yeah, that would practically double the business to like 15, you know, 15 billion for Starlink. So that would be, yeah, that would be under performance dramatically. Gotcha. And what was the technical challenges that Starlink needs to overcome to try to scale? I mean, the FCC challenges make a ton of sense. What are the technical challenges that you are aware of?

Yeah, definitely. there's, you know, no one's done this before putting tens of thousands of satellites into space. And there's, you know, a lot of sort of challenges. Well, to talk about technical specifically, I think there's one where, you know, how do you sort of prevent 10,000, 20,000, 30,000 satellites in space from getting hit by space debris?

which as we know is always whizzing by sort of the earth. They have an advantage because they're lower to the ground, but one of the sort of existential risks is this idea that space debris hits the satellite causing much more debris as they both break up, hitting other satellites, creating more debris, more collisions, something called Kessler syndrome. There's also this like cyber, sort of like a

security risks, they're putting these satellites above the entire world. And so it's not as if it's a contained sort of nice safe environment to work in. We haven't tested yet the ability for that big of a network of satellites to stay up, avoid failures, sort of bringing down the whole network, that kind of thing. yeah, just a lot of it is like scaling something that's never been done on the scale.

What about from the geopolitical perspective? Is there a risk from the perspective of like, know, SpaceX slash this satellite system is almost like the equivalent of like a country in itself and like SpaceX, sorry, China or Russia or Korea or somebody or even the US for the sake of conversation gets really upset and they want to figure out how to like stop it or shut it down or, you know,

I'm just trying to throw out some crazy ideas. What's the potential of that? And is that possible? Absolutely. mean, today, if you're in China, you can't use Starlink. So there's satellites above and you can't use them. And they're developing their own sort of competing. How do they stop you from using Starlink? Like not allowing you to buy it or some other technological method? I know that they have a sort of top level, you know, agreement with SpaceX. Like you're not going to operate this within

territory. I'm not sure yet anymore specifically than that. Got it. No, the deal because what I heard even that even in the Ukraine, you know, if it wasn't for space, sorry, if it wasn't for Starlink, the Ukrainian military might have some serious problems communicating because the Russians really took out a lot of their, you know, typical communication channels. So the actual geopolitical nature of all that, it's a bit crazy, right? So I'm just wondering, you know, what are the risk factors to the potential bulk case there?

Yeah, it's huge. mean, you're satellites into space above every nation. There's almost like a crypto metaphor where it's you're sort of, you know, it's free and free data, you know, instead of like free money or decentralized data, decentralized money. And I think you could even have people, you know, countries that just don't like the idea of a U S affiliated satellite network above their nation. know, China and Russia already forbid, you know, the use of Starlink, but there's definitely

a bear case where, I mean, it feels crazy to say, but even, you know, they start taking them down themselves. mean, other countries aren't in space doing that kind of offensive behavior today, but you know, who could say five years from now, 10 years from now, you could have a coalition, you know, anti-satellite kind of coalition going up against it. Give me on the flip side, give me your kind of

your bowl case, like I know you have it written down here. You want, just give me your pie in the sky. All things go well. Elon keeps on being Elon. What can this look like five, 10 years from now? Like, give me just like, you know, all the crazy amazingness. Yeah. Um, I think it's very relevant to the evaluation. Um, but yeah, I mean, I think so. Okay. I think starlink, you know, starlink is, is better than a lot of people's terrestrial.

So I think there's a case that you go from 4 million subscribers today to 30 million, 40 million or more. have it on, you know, why would an airplane or boat or RV not have Starlink if it's, you know, it's like the switch from dial-up to broadband in terms of speed. So it would just become sort of the new standard.

you know, cell phones would have it because you would never have to worry about losing service again, because you would always have sort of the ability to see one of these tens of thousands of satellites. So Starlink, you know, could be on its own doing 40 billion, 50 billion in revenue. Let's say it goes public in two or three years and then just becomes this, you know, Tesla-esque, you know, cash cow, which helps fund

SpaceX in their mission to build the reusable Starship that can take us to Mars. And then once we're sending up Starships with these kinds of payloads on a regular basis to other planets, get into stuff that sounds like science fiction, but like space manufacturing, even just like orbital manufacturing.

you know, just the most insane possible example is like, is like doing a semiconductor, you know, manufacturing in zero gravity. You know, there's a world where to really get out there, it's like SpaceX becomes like Nvidia of space or enables the Nvidia space at great benefit to itself. And the TAM of that kind of scenario is hard to, hard to fully grasp. I think because SpaceX has been sort of expanding its own TAM.

over time with each sort of success. And that will sort of continue to happen if they are successful. If we have the CEO of Verizon, and I'm using Verizon as an abstraction for like a telecom company on earth, cetera, what would they be saying right now? Why are they excited, not excited about SpaceX? Why are they not concerned that SpaceX is growing as well as it is and they're going to still crush it as Verizon or?

Give me your thoughts. I mean, obviously you're not the CEO of Verizon, but just what are your thoughts? the CEO of Verizon was on right now. Yeah, I have read, um, you know, some of the reports from the CEOs of like, um, the satellite internet companies who are, you know, the biggest three that I mentioned, go-go Intel sat, uh, and they're sat via Biasat are, you know, these businesses, they're not doing very well. Um, Biasat is like,

billion revenue declining almost 10 % year over year. Intel sat is like 2 billion, you know, go-go is going down. And what they're saying right now is that, you know, they recognize that their approach of high, you know, one satellite extremely high up in orbit, you know, is not maybe not the future. You know, they'll point to the fact that like, well, Starlink only has about 2%, 3 % market share in aviation today. It only recently

launched in aviation, but they'll point to sort of, have these incredible customer contracts for years in the future and that they're also experimenting with low earth orbit satellites. So a lot of them are in the works of doing what Starlink is doing. And some of them, some of the smaller players in space have actually launched their own low earth orbit satellites with SpaceX. So.

SpaceX is launching its competitors satellites into space for them, which is sort of, mean, evidence of the fact that SpaceX doesn't really consider them competition in the long run. And so it appears that on public basis, you know, they're mostly saying, we're not too worried. You know, this isn't necessarily the way of the future. If it is, we're doing as well. I think someone like Verizon to go to sort of your point and like more terrestrial ISP,

stuff I think it's a little bit further off. So I haven't seen too much discussion of, of concern over it. I do think, you know, a lot of people, like I would never switch my internet provider for Starlink because mine's great and it's a cable in the ground. And I like that. So I think that they have less concern on that front. It is interesting that the direct to sell stuff and you're seeing like T-Mobile has a partnership with Starlink, which they sort of demoed for the world during these LA.

buyers allowing people to connect to Starlink through their T-Mobile phone. So we might see that as a sort of paradigm for that competitive dynamic going forward where it's more about partnering to sort of shore up the dead zones in their coverage. All right. Put you on the spot again. Is Verizon going to need to have a low-orbit satellite network 10 years from now to compete?

I think it could be compelling. I think because of the still big issue of dead zones, and if you had a Starlink offering no dead zones ever, even if you're over the ocean or on a plane, I think that could be really compelling. I think they would probably have to rely on SpaceX to get it up, and SpaceX would be well compensated for that. So yeah, I think that makes sense. So now one of the main questions.

Let's talk about price and IPO prospects. Most people on this call are here to make money and they wanna invest and try to make more money than they put in. So I hear the latest tender is $350 billion as a price. Talk to me, is that a good entry price? Where did that number come from?

It came from a select group of folks who were brought in to buy shares from existing investors. So this is not a stock market per se, although SpaceX has probably the most sophisticated internal stock market of any private company. So I wouldn't take it as a huge sort of market shaping consensus opinion, but I think if you can get SpaceX stock at 350 billion, it's a no-brainer.

Wait, wait, a no-brainer. Those are strong words. I should say... A no-brainer. So obviously this is not investment advice. You all have to do whatever you want on your own. My compliance team told me what I had to read before, so you can listen to the video if you join late. But if they're doing approximately 14 billion of revenue and 350 billion of enterprise value, I mean, that's not a nothing. That's pretty significant. Why is it a no-brainer?

Well, for me, look at going from going from 180 to 350 in the same year, it's 25x price to sales, is, I think Nvidia is right now actually about half or sorry, double that. Our graph is slightly, these things are changing so quickly that it's hard to keep up. But the multiples high 25x up from about 20x in 2024.

But in the private markets with SpaceX in particular, there's no lack of demand for these shares. There's so many buyers and the problem is really getting your hands on it. mean, in this $350 billion tender, the word is that basically no investors in the company wanted to actually sell their shares. I mean, some do for some liquidity, but there's an extremely active buying presence. And I haven't really seen any reason to doubt that

the launch business will continue to grow, that Starlink will continue to grow. And I think you just look at, let's say roughly 40 billion in revenue by the end of 2027. That's kind of what I would expect like in base case. I think that could be like a 15X valuation. That's like a $600 billion total valuation or like 323 per share. And I think that's what I would expect.

thinking conservatively about SpaceX's future. And then I think there's so much additional upside on top from, you know, just the sort of enthusiasm for them. I mean, if you look at Tesla's public market, you know, sort of ride, the amount of sort of interest and exuberance that Elon brings to projects, especially one predicated on, you know, going to Mars and

unlocking a multi-planetary future. It's, yeah, probably like the most, top three most compelling stories in the markets alongside like Nvidia and OpenAI. If we were to know how much of shares we're trading now as part of this tender, do you have any sense of like how much of the total market capitalization and like the total shares available?

Are we talking, it's like 1 % of the shares, are we talking like 10 % of the shares? Are we talking 50 % of the shares moving? Do you have any sense? Based on what has been said, I would guess one to five, probably some minor employee and early investor sales, but nothing major. Got it. And what if I wanted to go with the opposite view? I wasn't bullish. I wanted to buy shares, but I felt like it was massively overpriced because of all this like Trump bump.

It's going up too fast, too quick, too high of a price. Is there any way to actually invest on the downside? Can I go short?

I'm not aware of any, I know there's been various startups trying to do this, but I'm not aware of any places right now where that's straightforward to do, but you possibly could through some kind of forward contract. But yeah, would, I would, I'd be cautious about doing that. You mentioned this already a few different times, but I just want to zoom in one more time. What do you consider the actual best comps for this business?

not what are other big or small comps. What do you think when it does go public or as people are in the market, you know, trading it, what do they say, here are the three companies I really compare it to and that's the right comps to compare it to? Yeah, it's a tough one because of the sort of complexity of the business being sort of launch services and being Starlink and having a sort of tech component and a, you know,

services component. So you look at companies like Boeing and Lockheed, I mean, they trade at like one to two X their sales. So they technically are in the launch services business, but they also do a lot of other stuff. know, ironically, Tesla is like a company that I would look at because of how it has the same sort of Elon Trump election upside.

and also has sort of a multifaceted business where they sell cars, but then they also have sort of the business that's built around the battery product. You have some smaller businesses like Rocket Lab, but these are like the publicly traded, extremely small space competitors that aren't really relevant in terms of the context of comparing to a business that's at 14 billion in revenue growing 60%.

So if you're, you're pulling together a spreadsheet and you said, I need to put in three to five companies into my spreadsheet and see what their multiples are. What are the three public comps you put into the spreadsheet? The three? Yeah. I think, I think probably like, I'd probably throw in your Lockheed, Boeing, maybe I'll try to argue that could be one. say it's ULA and then your, your, Viasat or

yeah, bias that and then maybe you're at your Tesla to monitor the, exuberance angle as well. Got it. So if you were to average those three, do you have any sense of what the multiple will be there? Between Tesla then and bone. mean, the sort of blended would probably be around 10. Got it. So if we were going with that, that would be on a 14.

billion of revenue, we're talking like $140 billion market cap. I know this is not scientific. We're just for the sake of conversation. Yeah. But if we put the Tesla multiple, it's probably worth like, what's the Tesla multiple now? It's like ridiculous. It's like, it's actually moderated somewhat, but it's roughly, I think, like 17 or around there. Got it. Got it. So we'd be much closer to the 300 price point probably. Okay.

So you mentioned something about IPO prospects. I've always been hearing that, know, SpaceX is not going to IPO for a long time, but then you said Starlink. So talk to me, what does that mean? Starlink versus SpaceX? How could that be split up? What does that mean? What are the timelines? What are the potential prospects for IPO? Yeah, I think a SpaceX IPO, it could be very far away. It could never happen. Gwynne Shotwell, who's the president and COO said that

They can't go public until they're flying regularly to Mars, which is, you know, I both an indication of like, that's when we think we'll have truly recurring, repeatable, predictable revenue for the public markets. And also a reflection of Musk. know, Elon Musk does not want to take companies public anymore after his experience with Tesla. There's a lot of, and you know, he's very important to the decision. He sees it as a total, you know, distraction.

to sort of chase quarterly earnings. However, Starlink is sort of, they talk about it as a different kind of business that they feel much more comfortable taking public. They said, a few years ago, we'll do it when the revenue growth is smooth, predictable, which it's becoming now. And there's sort of the consensus opinion is that Starlink will go public sometime in the next year or two.

or three, and it will go public as a means of, you know, generating cash basically for SpaceX's continued R and D getting to Mars type thing. Great. Would an investor have to wait for it to go public or is there so much demand that there's potentially an opportunity to go in and out depending on how you get in? I think there's potential. mean, these like

For example, these tender offers are happening fairly frequently at SpaceX. think on, know, depending on. What is a tender offer? Yeah, so SpaceX has this kind of internal stock market where they let employees and investors get liquidity by putting shares up and then having, you know, outside investors or existing investors sort of bid on them. So there's kind of this, you know, functioning market inside of SpaceX. And then obviously you also have just like secondary market platforms where

depending on supply, you can go buy shares and later you can sell to other people on that platform or other platform. So I would say with SpaceX in particular, there's definitely no rush towards IPO. It could never happen. So I think private markets would be your vehicle to sort of get in and get out. And I think, you know, there's definitely time on that front. Great. And from my understanding, even though it's private,

it's like even more liquid than some of the small micro cap stocks in the public markets. Is that right? Yeah, probably true. It's been going for years, this internal stock market. you know, I think it's definitely it sounds like it's quite active generally. I have several questions being asked and anybody can jump into the Q &A. We're coming up towards the end here if you have any additional questions. But several people asking of

how they suggest to get in. So we'll be sending out a form to gauge any interest and we have Vincent will help you navigate that if we can. Does a position in SpaceX guarantee a position in Starlink? I believe so, unless something, you know, totally unforeseen happens, it's a wholly owned subsidiary of SpaceX. So I believe that investors in SpaceX would automatically have exposure to just any Starlink IPO.

All right. What do you think of like, this sounds very rosy, things are going really well. Elon's like the hottest thing ever right now. Obviously he's connected to the president. What do you think are like the existential risks here where it goes from like super frothy and amazing to almost like, I don't want to say imploding on itself. Like one risk I imagine is Elon dying, right? I imagine if Elon dies, that's not going to be good. But what are there things like in that's called that category that could be just like,

massively negative. I think what we talked about with international affairs could be significant. I mean, if someone starts shooting satellites out of the sky, you know, unilaterally, I think it could happen. I mean, it's sort of a coalition of countries that don't necessarily want this operating over their, over their airspace. I think, you know, if you had something like what we talked about with space debris,

I mean, some of these starling things are not foreseen, unknown unknowns of how it could fail is a possibility. think Elon, the key man risk with Elon is definitely significant. I do think there's a kind of a corollary to open AI where Sam Altman is very important. But I think with both of them, the most important aspect of them in a sense is the sort of capital raising. mean, SpaceX has had unlimited access to private capital for decades. And a lot of that is based on Elon.

But, Winshotwell, this president of Starlink or SpaceX is considered, you know, widely to be really the driving force behind the company sort of operationally and technically. And so I think that might be potentially okay, weird to say this, but I think the last existential risk is kind of, you know, catastrophic failure, which is sort of, you know, chilling to say, but major accidents, major launch failures, you know, with loss of life.

I think could be a huge blow to sort of the company's reputation, ability to get contracts with NASA and all that. So. We're coming here towards the final few questions. We have a bunch of people asking about where should I buy shares? How can I buy shares, et cetera? Like I mentioned, we'll follow up with an interest form, but it's a great opportunity to mention our partner for today's episode, which is Upmarket. So it's your gateway into the private market since 2019. Upmarket has held over

helped over 700 and credit investors invest over $200 million into these types of companies, whether it's SpaceX, OpenAI, Andrew, and other types of private equity investments. Upmarket is a US-based investment platform with a seamless digital investment process that handles the complex parts of investing so you can focus on your ideal portfolio. So visit upmarket.co to learn more. Always excited to have partners in this process.

Typically, how are people getting in in terms of the amounts? Like have you heard amounts being 10 million minimums, 1 million minimums, 100,000 minimums, 10K minimums? What have you heard? That's a good question. I've definitely seen, you know, I've definitely seen smaller blocks of SpaceX available, limited quantities and, you know, not always with the most preferable terms. You know, there are some platforms where you can definitely buy

10K, 20K of SpaceX, but there's, like you pay carry to the marketplace of like 10, 15%. So it seems like there's definitely opportunities to get it in smaller blocks. I would check out all the terms and sort of fees and what you're actually paying, but yeah. Yeah. I mean, all pre IPO investing can be onerous, right? You're either going to be right on the cap table, directly getting shares, or you're going through some SPV.

then the trickier part for these more in-demand companies are you in a secondary SPV, an SPV into an SPV, where there might be multiple layers of fees. You gotta watch out for what are the fees? Is it a one-time fee or is it an annual fee? And if it's an annual fee, for how many years? And if it's carry, what is the carry? I mean, the usual number is 20%, it could be lower than that, but the typical number is 20%. The question is, is it an SPV with 20 % into an SPV with 20 % carry? So now you get a little crazy.

Again, this is a lot into the details of the minutia of the actual investment. Okay, so any final thoughts, Jan, Eric, that you want to share? I mean, it's just a company, it's a story that's really hard to not love, you know, because it's generating a ton of revenue, it's growing really fast, and they have a mission to do something, you know, really audacious and sort of like a throwback to, you know, days of...

when American companies were first launching into space. So it's a company that I think is doing really exciting stuff and with Starlink is sort of showing the potential to become more than just a rocket company and really become this kind of platform, this elevator to space with a whole bevy of other revenue generated businesses. So I think it's really exciting. And I think if I was younger,

in my early days, I should have studied something else in school and gone to SpaceX and gotten stocked that way. So I that's probably the best way to just get a job at SpaceX. But yeah, I'm really excited to see them hopefully start link go public soon. And I'll be buying on day one probably. Why not get into the private markets? Yeah, that's a good point. think myself, I mean, I haven't seen great opportunities. I feel like it's one of the ones that is

definitely tougher to get your hands on. But you know, it's a it's a good, it's definitely a good opportunity if you can, if you can find it. Well, you should fill out our interest form and we'll try to help you. Let me open it up right now. I see the link. What is the, what is your prediction? You said probably 40 billion potentially for 2027 with a price of enterprise value of around 600 billion. Is that what you want to put out as your prediction for three years out? That way I can say you're the best if you're right. And I could say you were wrong if you were wrong.

Yeah, I look forward to the tweets three years from now. I'm looking forward to it. All right. And do you think it could become a trillion dollar company or bigger? Or do you think it maxes out like something, you know, sub sub trillion? Definitely. I think it's just about time horizon. And, you know, it could potentially become a trillion dollar company much sooner. I think a lot of what I talked about is sort of

what's a reasonable case, what's a conservative case. And I think they've outperformed that conservative case in a lot of years. but yes, yeah, definitely. All right, Jan-Erik from SACWR, thank you so much. I'm Slavo Rubin with Vincent. Check out withvincent.com if you wanna learn more about information like this and other alternative investment info. We put out a daily newsletter as well as all kinds of podcast content called Smart Humans. This has been a great discussion.

You know, I'm biased. personally have some shares and I love SpaceX. I think it is the future and it's been for a while. There's definitely some massive risks. And I do think it is quite expensive today at 350. It definitely got some Trump bump. But if you compare the Trump bump into Tesla versus the Trump bump into this, it almost makes SpaceX look a little cheap, if you could say that, which it's not cheap. But, you know, Elon plays in very big Tams. This is a massive opportunity.

And thank you very much for the conversation, Jan-Erik, this was great. Thanks for having me. Have a good one, everybody.

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