IPO Buzz: What to Know – Ep. 289

Welcome to the Accumulating Wealth podcast. I’m Hunter Satterfield. And I’m Judson Crawford. We’re CPAs, wealth advisors, and partners at Cain Watters & Associates, a financial services firm here to help you navigate the decisions you face every day. 

Today, we’re talking about what could be one of the biggest stories in the market this year. That’s right, 2026 IPO talk. With names like SpaceX, OpenAI, and Anthropic reportedly leading the way, investors are watching closely to see whether this opens the door for a broader wave of new offerings. Yeah, if these listings go well, they could boost confidence and bring more companies to market. 

But if they disappoint, that could cool momentum just as quickly. So let’s break down the opportunities, the risks, and why this IPO cycle matters beyond just a few headline names. Today, we’ve got a guest on to help us break it all down: the opportunities, the risks, and why this IPO cycle matters beyond just a few of those headline names. There’s a lot to unpack here, so let’s jump in. 

 Now, listeners, we have failed because last time this guest was on, we promised that he would have his own intro music, and I don’t think that our co-producer, KelsieAnn, listened to what I needed. That’s right. What was the walk-on music? Do you remember what you said? 

“Protect Ya Neck” by Wu-Tang Clan. It was Wu-Tang Clan. Oh, he came with a s- It wasn’t Wu-Tang..  He came with a song this time. Yeah. Yeah. KelsieAnn, get it ready. I’m not sure that you can do the residuals or anything on that anyway, probably. Yeah, good point. Yeah. 

Well, welcome, Story Time with Brad. Thanks. As usual. We teased this one, listeners a few shows ago. It is indeed IPO talk. You will, in all likelihood be hearing this on what? Tuesday after Memorial Day. We are recording today, Thursday, May 21st, with really breaking news. I mean, stuff is breaking right now on SpaceX IPO, which is now set, Judson, for June 12th. 

It was, like, speeding out to market. There’s a whole bunch of rumors and cynical reasons potentially why. Looking at probably $175 trillion to $2 trillion. Is that all? That’s just a small one, yeah. Looking to raise $75 billion. Y’all, we’re going to break it all down. 

What is an IPO? Why do they do them? What’s the history of them? And also, why now for these companies? 

But before we do, gentlemen, we’re going to play a little game. Alright, I went back from 1995 to 2005, and I said, “What were the the best performing IPOs?” And I said the top four during that time. Can y’all rattle them off? Go. 

Nvidia. Yes. Amazon. Yes. Google. No. No, not Google. Nvidia, Amazon. 

Salesforce? Nope. Nope. This, it’s a streaming DVD service. Netflix. Netflix. And the last but not least is a beverage company. Monster. Monster. All right. Monster? Monster. Listen to these numbers, y’all. That was better than MasterCard? It was. Wow. Okay. 

The fourth best performing is indeed, Netflix. May 2002, if you invested $10,000 at that time, you’d have $7.5 million. Shame on all you that didn’t do that. That’s a 99,000% return. Amazon coming in at three, May 1997, $10,000 turned to $25 million. Nvidia is number two. That’s right, it is not the first. January 1999, $10,000 turned to $50 million. 

But y’all, Monster, August of 1995, if you put just a measly $10,000, you would have $80 million. That’s insane. Wow.  

Interestingly enough, some of the ones that weren’t in the top four, I was just looking back at this, eBay. Yeah. Some of the ones that- Soon to be GameStop … VeriSign. Yeah, indeed. The Monster gain I had to like, I had to practice saying this, listeners. 

The gain on Monster is 818,000%. On Monster. Wow. That’s a lot of caffeine. That’s a lot. 35% compounded annually- A lot of taurine. Yeah. Yeah. It’s a lot of- Well- … a lot of bros. And we’re going to break down these three that are coming, and many more listeners. These are not your mom’s Amazon, Monster, okay? 

These are going to be very, very different for a whole lot of reasons. But before we get there, we’re going to tease that. Before we get there, we have to talk about why companies even IPO. You know what? We need to even just say what IPO stands for. Initial public offering. That’s right. 

Again, listeners, this is basically companies going from privately held, whether it’s owned by one person, whether it’s owned by many people, whether it’s backed by VC, whatever else it is, and going out and listing themselves on the public stock exchanges. 

So the question becomes why they would do that. Now, there are a couple different reasons here. The first- I’m just going to answer it. I have the answer. Oh, good. Go for it. Money. Oh, yeah. The first is to raise capital. Exactly. 

Yeah, number one is raise capital. So they can raise… SpaceX is looking to raise $75 billion. 

Yeah, when, when you were saying they can raise, apparently now it’s $75 billion. Yes. It’s not even hundreds of millions. Yeah. It’s now multiples billions. And they can do that, Brad, without taking on new debt, which is a good thing or giving up control to a VC firm. The question is why do they want to raise money? Like, what is it that they’re raising money for as a part of this process? 

To fuel growth. I mean, you’re basically shifting to where now you have access to public capital. And so when you have a company as big as SpaceX which is going to be just top of mind because it’s coming private capital, you’ve been through round after round after round after round. 

You just have to: A, make those guys liquid. They’re going to want their exit at some point, and B, there’s more money in public markets than there is in private. And so by listing yourself, you now have access to that. You can issue new shares and raise money if you want to do something. A lot of companies go public too because their balance sheets tend to be fueled by debt when they’re private companies. So when you go public, you can clean their balance sheet up pretty quickly too. 

 Yeah, exactly. And I think maybe Judson summed this way, because, like, that money can fund growth, to his point. It can do R&D, acquisitions, debt repayment, as you mentioned. Maybe the best way is just, like, a DSO, right? 

I mean, a lot of our clients are experienced or know of that. A DSO starts with maybe one, maybe two people backing it. Then when they want to get liquidity so that they can go buy more practices, they go to maybe a bigger group. Then they go to a bigger group or multiple sponsors at that point. 

And at some point it’s just too big for any one, two, three investors, and they have to get it to the public markets, which is $65 trillion of market cap. 

Well, and some of that, and this goes along exactly with what you’re saying, but some of that may be to get some of the owner’s equity out of it, right? 

So yes to raising capital, yes to cleaning up the balance sheet and taking care of some debt. But it also may be that they want some of the current owners to be able to take some capital off the table. 

That’s right, yeah, and that’s number two on the list. Excellent segue. It’s liquidity for existing shareholders repayment of debt, as we’ve mentioned. 

And the other thing, Judson, to that point is it does create a liquid market for employee incentives too, right? Now you can start to have stock options. You can have RSUs – restricted stock units – for employees, and those, they now have a liquid market for those employees to be able to actually capitalize on that and monetize, and we’ll talk about that with the lens of SpaceX here in just a second. 

That’s what SpaceX will be is, like, if you go live on the Mars colony, then you get options. 

Well, it’s also, I mean, just to be able to retain talent and to get talent. Like, if Elon wants to hire the best rocket scientist on the planet, and the guy wants $10 million. He can now say, “How about a $1 million a year, and we’ll give you $10 million in stock grants,” right? 

And that’s going to be very, very enticing to those guys to come, and then those are restricted, so they have to work there for three to five years in order for those to become vested. 

So it’s just a whole nother way instead of just shelling out and cash flowing salaries, right? 

Exactly. So the third one, gentlemen, is to establish, like, a market valuation. 

So as we have talked about before, like, the private markets are notoriously opaque. It’s very difficult to understand what a value might do, and Brad, when you go to the public markets, there is a clear daily market value. Correct. It’s called a market cap. Exactly. I mean, and we can go right now on our phones, we can pull up a share price for every one of those. There’s really truly tons of liquidity so that’s a big one. 

And then I think the fourth one, which is maybe a little bit of a soft skill one, it offers some, credibility and visibility to the brand, right? I mean, it’s kind of like they’re putting their big boy pants on, in going to the public markets, right? 

It’s a maturation thing for companies to say, “Hey, we’ve rung the bell. We are now public.” And I mean, broadly, that can be good for the companies and existing partnerships, to your point, to attract top talent, things like that. Yeah, 100%. Being public and being on a Forbes 500 list, that does something for your business. 

I mean, it just does. It makes you, world-class. 

So those all sound really good. What are the downsides? So let’s run through some of the downsides. I think the first big one, Judson, you and I were, very much in this world back when we were at Ernst & Young at our previous employer, is regulatory compliance. 

And so we’ll go through some of this, but Senators Sarbanes and Oxley post Enron, WorldCom they had this act that got passed. It just became incredibly burdensome on corporations from a reporting standpoint, and some companies just don’t want to go through that. 

And some companies, as we’ve talked about before when we’ve talked about the difference between public and private investors or investing, some companies actually go the opposite direction at some point for those very reasons, right? 

 Exactly. And so I think that’s a big one, right? And we’re not going to go into all the SEC rules and things like that. We will talk here in a second like what the process is for that, because a lot of that is clearing those regulatory hurdles. But secondarily is, a lot of these CEOs and, now board, once you’re public don’t want the quarterly pressure from shareholders, right? 

I mean, we’re always talking about, NVIDIA just printed earnings yesterday, Brad. We talked several weeks ago about the other big boys doing that as well, and that just can create pressure from, public sentiment, headlines, things like that, that a lot of these companies don’t want. 

Yeah, and now your quarterly profitability’s on display, and if you’re a growth company, you might be going through a period of softness that was by design. Like, “We’re going to ramp here. It’s going to hurt our margins for a year,” and some stock might get punished for that. 

If you’re a private company, you just do that for a year and keep going. But like a public company, your stock could drop 25% when you announce that.  

That’s right, and that can create a little bit of a short-termism, I just made that word up, short-termism by your board, right, Brad? 

Yeah. I mean, you want to explain what that means? If it’s, they’re chasing these quarterly numbers, the view of the company probably is no longer long term as much. 

Yeah, I mean, when you become public, you’re running the company for the shareholders now, not just the founder or the owner or the employees there. 

Like, your number one mission is to your shareholders, and your board is there for oversight to make sure you’re doing that. And so if you’re a company that says, “Hey we’re a potato chip company. We’re pivoting to AI,” or whatever, all this silly stuff you hear now, but you want to do that and you have a clear, defined plan, your board can say, “Nah,” and if you try to do that, you’re out as the CEO, so you have this whole other thing you have to deal with. 

And sometimes the board will shut down plans that are actually long term, to your point, good for the shareholders, in order to keep the stock price up in the short 

Yeah, I think, for many of our clients, Judson, they can run their practice however they want. They don’t have to answer to anybody but themselves as the owner. For us as Cain Watters Ppartners, we can make very long-term decisions that are maybe loss leaders for our organization or whatever else it is because we don’t have to report to anybody but ourselves. Yeah. Right? 

And I think that’s a big win for sort of the long-term approach, how you bring success upon companies. But you give that up in order to go get money or get liquidity for existing shareholders. 

 Well, as Brad pointed out, when you first talked about the fact that, hey, there’s positives and negatives to everybody knowing what your price is every day. And I think that, for any large company, you are beholden to the shareholder, you are beholden to the stock price, which it just makes decisions two-sided in a lot of ways. 

Exactly. And I think the last one here, just very quickly, listeners, is a little bit of loss of privacy, right? I mean, you’ve got regulatory compliance, you have things you have to talk about as nitty-gritty as sales in individual countries of an individual product or business unit you have. And that just isn’t the case with private companies. 

So those are some of the reasons why, some of the downsides. We’re going to talk about here in just a second why these companies in particular are looking at the current market. But before we do that, SpaceX is about to go on a little road show here, Brad. Anthropic and OpenAI will do that as well. 

You want to give the listeners, like a 60-second rundown. We don’t need to get too complex here. A 60-second rundown from, “Hey, I’m ready to IPO. I’m going to file my S–1,” to it is hitting the actual exchange and I’m ringing the bell.  

Yeah, there’s lots of ways to do it. So back in the beginning of my career, the really, the only way to do it is kind of the traditional way, where you file your S–1, you get regulatory approval to go public, and then you pair up with an investment bank. 

And the investment bank used to do the whole IPO process for you. So that was securing the financing, finding the investors going down the list, doing your roadshow for you, flying you around the world, all that stuff, and then they would take, like, 7% of the IPO price on average. 

So for SpaceX, that would be somewhere in the neighborhood of $140 billion that they would have taken. 

Where can I put my application in? Yeah. Judson and I applied for this banking job- … I almost was an investment banker, believe it or not. I got to the final round, and then it was 2001, and they didn’t hire anybody. 

But, so that was kind of the deal, and then as technology gets better and as fees compress, there’s lots of other ways to go public now. SpaceX is kind of doing a hybrid. But there’s direct listings, right? Like, you could just go to an exchange. You can file your S–1, get approval, and just go to exchange. 

Some of those that have come out recently, Spotify, Roblox, Coinbase, and Palantir, were all direct listings. Those are all like, if you have brand awareness, you don’t need an investment bank and all that. You can just go list your stock, and the investors will come rushing in because everybody knew who DraftKings were. 

Everybody’s kid was probably playing Roblox. Thankfully, mine missed that. And so you can just do that. Then there was a big wave where they kind of had a negative connotation for a while. You can go public via SPAC, which stands for Special Purpose Acquisition Company, where that’s just like a public company that raises a bunch of capital, and then they go buy a business and turn it into a public company. 

 Vertiv and DraftKings were two of the… I think I said DraftKings was a direct listing. You mean Spotify. Spotify, yeah. So Vertiv and DraftKings were SPAC, and Spotify was direct listing.  

So those are all ways you can go public now that didn’t really exist back then. And so the market for this is very, very more competitive and it’s kind of more of a flat landscape than just having a few big investment banks that you really can’t go public unless you use them. 

That’s right. And so listeners, where we are at in that process right now is the S–1 has dropped. And inside of that, you can actually see all the terms of what SpaceX is proposing for going public. The lockup period for instance, on SpaceX, and we were talking about that one because it’s the one that’s most probable here from a timing perspective. 

For instance, Elon can’t sell any shares for the first year. Like, that’s just stated in the S–1. And again, this is all part of the process of marketing SpaceX to the public to say, “Hey, buy our stock when it drops.” So we’ll talk about some of those specifics, but I want to pivot, guys. I want to pivot to a little bit about the market, all right? 

So I’m going to throw some stats at real quick, and then we’re going to talk about some of the shift in the market, because I think this goes to the story of, like, “why now” for these companies. So from 1995 to 2005, which is that period listeners, I was referencing earlier when we were talking about the Big Four that I mentioned. 

From 1995 to 2005, there were 3,200 IPOs. On average, 290 per year, okay? So almost 300 IPOs per year. So that was through 2005. 2015 through 2025, so same time period, just 10 years later. And the reason I chose that one is really post-Enron, WorldCom post-GFC. It was sort of an interesting market. 

But things got frothier again in 2015. So from 2015 to 2025, it was only 1,500 total, so exactly half as many IPOs, only 140 per year. For peak year numbers during that first time period the highest year was in 1996. There were 677 IPOs in one year, in 1996. A lot of those are probably garbage companies, pets.com. 

 The peak for that second time period was only 311, and that was right after COVID, 2021. That was the SPAC period. Yeah. Brad, you’re shaking your head or nodding your head. That was the SPAC period. So again, well less than half of the numbers. The last three years, only 54 IPOs in 2023, 72 in 2024, and only 90 last year. 

So the numbers have just plummeted. Is that more private money? So yeah, let’s talk about the reason why. I think that’s the really good one. And there’s really four broad reasons, so let’s rip through these very quickly.  

The first, Judson, are those regulatory changes, like, right? 

Senators Sarbanes and Oxley just really made things difficult to be a public company. That was actually my first gig when I was at EY, was on a SOX 404 engagement, and it was just incredibly burdensome. Also the reason why you’re not at EY. Correct. That is why I’m here. So, RIP. Thanks, Sarbanes, Hunter. That’s right.  

The second one is exactly what you said, right? And I want to double-click on this thread. The growth of the private markets, I mean, it’s just exploded, and that’s why I picked the 2015 through 2025 time period, because, especially now with private credit, these companies, Brad, can just go get private financing. 

Yeah. So you had a two-headed thing there. So in 2008 all the banks, the big banks to get bought out, or to get bailed out, excuse me, had to convert to an actual bank from an investment bank. So a lot of investment banking kind of went away, and then you had interest rates at zero. 

And so what that did is that drove a lot of the lending that was traditionally from the big banks got driven into the private markets, because the big banks, first of all, their balance sheets were kind of smoldering craters at that point, and their investment banking had to be pared down to basically nothing. 

So they couldn’t lend in that space, and so here comes private credit and says, “We can do it.” And then you keep interest rates down that low it’s way more competitive to hit the private market than it is to go get a traditional bank loan. And the private credits tend to be a little bit more flexible with you, particularly as a company when you’re financing through them. 

And so that’s just fueled the growth of the private markets. And once you have all that money in the private markets, it kind of behooves you to stay private and just keep your valuation going up as long as you have access to rounds of financing. Why have the headache of Sarbox? 

And then you also, on the regulatory front, you had the wrath of Khan, which was a thing. That was Lina Khan, the head of the FTC that was kind of shutting down deals left and right. She’s gone now, so that’s why some of this stuff’s starting to come out. 

Yeah, I mean, and Judson, it pairs with, I mean, for damn near five years, we’ve been talking about the private markets and how that’s have to be a part of our portfolio because so much of the value exists over there, and this is part of that story. And listeners, stay tuned because this is going to be a big topic on sort of the numbers as we look at SpaceX and Anthropic here in a second. 

The third reason why is that you sort of have this, what I would call just a longer private maturation period, right? Just like a comfortability with being willing to mature more in the private markets. 

The financing is there. Investors are a little bit more comfortable being over there. There are now liquidity options in the secondary space for investors to be able to get out sort of mid-cycle, and so that’s happened as well. 

And I think the fourth and maybe a little bit lesser discussed one is really over the last 15 years, these mega cap tech companies have so much cash on their balance sheets that they’re just buying all these companies pre-IPO at really incredible values, right? 

And so I think that a lot of the founders of these companies are like, “Oh, we can sell to Google,” or, “We can sell to Meta or Apple and just become a part of that company, get our valuation, and not have to go through the process and headache.” 

Interesting stat, in the 1980s, 90% of VC-backed companies went IPO. Only 10% were acquired. That is completely flipped. It’s now 10/90. And listeners, in case you’re wondering, Google owns 7% of SpaceX and 15% of Anthropic. Google. Yeah. So like, I mean, These two companies have just been able to get all that financing from Googles of the world. Tesla owns them, Amazon owns them and I think that’s a lot of the reason why as well. 

And, and Nvidia owns like, five pages worth of small chip companies and other AI ancillary stuff that buys some of their stuff. They’ve been investing in those along the way. They have like a, almost like a little VC fund inside their company. 

Well, and doesn’t it… I mean, a lot of these reasons, sort of breed themselves together, right? Because of the prevalence of private equity and the money there, a private equity company can take a company, build it up to something, and it’s just much easier for them to say, “Oh, Google wants to buy me over here. We’re all going to make a bunch of money here,” and then it just continues to perpetuate itself. 

Yeah. I mean… Yeah. And they have the war chests, right? They have the war chests. They can finance it themselves. That’s right. 

Exactly. So this is changing the story, and again, this is going toward our June 12th date. The median market cap at IPO of those companies from 1995 to 2005 was only $150 million. 

Only. Only, yeah. The median market cap in that second time period, 2015 to 2025, was $1 billion. So we’ve gone from a $150 million to $1 billion for median market cap. The bottom line is as I said earlier, the game has changed. These IPOs are not your mom’s or your grandma’s Amazon’s Nvidia’s, Netflix’s, Monster’s. They’re just not. 

Or Brad’s favorite IPO of the last 20 years, which was Beyond. Beyond Meat. Beyond Meat, yeah. Yeah, that was a great one. 

So let me give you some stats. This is just bananas. The revenue to market cap multiple, right? So basically just like, hey, how much sales do you have compared to what your company is valued at? 

At IPO, Amazon was three times, Nvidia was four times, Monster was eight times. The expected for Anthropic, which could change, who knows, the expected for Anthropic is 40, the expected for SpaceX is 125. Yeah. Listeners, hear me again Three times was Amazon’s, four times was NVIDIA’s. SpaceX is expected 125 multiple of sales. Of sales. Yes. Yeah. Of sales. 

Yeah, that’s not earnings. Correct. Earnings would be negative infinity. Like negative infinity. Yeah. 

 To give you some perspective, the highest sales multiple in the S&P 500 right now is Palantir at 63 times, meaning SpaceX is two times the highest when it IPOs. 

Yeah, and NVIDIA is, like, 35 times right now on trailing basis. Like, a little bit less if you look forward because they’re public and they have all those estimates. But, so it’s talking to me four times the valuation of NVIDIA, which is the largest company. 

So yeah, to think that, folks saying, “Hey, I’m going to invest $10,000 in SpaceX when it IPOs on June 12th, and it’s going to be worth $80 million,” like, the market cap of that company would have to be gagillion dollars. 

Yeah, I can’t even do that math. I mean, it’s just not going to happen. I can’t do that math. Yeah. 

All right, so the question becomes why now, right? So these companies, why are they going public? And again, I think that there’s a couple of things. Number one, massive capital needs and they really have run out of runway in the private markets. 

I mean, you hear SpaceX about all of the things that they are trying to do right now with this capital. Yeah, these are not cheap things they’re doing. Correct. Yeah. Exactly. They’re standing up huge data centers. They’re trying to build a colony on Mars, go to the moon, fully reusable heavy lift starships orbital data centers. 

They want to become a strategic military supplier. I mean, at the end of the day, these companies need this capital because they have to keep growing to justify these multiples. And so when you see SpaceX trying to raise $75 billion, to give you a little perspective, the largest ever IPO previous to this was Saudi Aramco in 2019, and they only raised $26 billion. 

They’re trying to raise three times the largest ever. Insane. But they have to. And they’re going to. Good point. The money’smoney is already there. Yeah. Guaranteed, yeah. 

The second is liquidity for those early investors. Tom Mueller, who is famously the first employee of SpaceX. This one shocked me. I thought it started in like 2008, 2009. It started in April of 2002. He has gotten some of his money out, but at the end of the day, many of these companies have been hanging for 20-plus years. 

I think the third and more important one and maybe tells a little bit of the story about why we’re rushing to market right now, obviously, guys, there’s a huge enthusiasm about AI in space, right? 

It’s a recovering IPO market. Lina Kahn’s gone. Things are screaming higher. The administration’sadministration is all behind it. I think they’re taking advantage of what is a very enthusiastic market. 

And another thing is these things are so big, it behooves you to be first. I think I talked about this on our last podcast, but the market cap of the US stock market’s like $65 trillion, give or take a trillion, depending on the day. 

You’re talking about, a not insignificant percentage of the stock market you’re listing in one IPO, and if you stack OpenAI and Anthropic together, you’re talking about a 10% boost in terms of market cap. Like, you’re taking 10% of the market cap and trying to IPO that. There’s not that many dollars, to your point. 

It’s not going to go to $800 trillion or whatever. So if you want to go public and you need this financing, and you want to fuel your growth this way, it behooves you to go first, to be a first mover, and that’s what I think Elon’s doing. 

All right, listeners, so that is our rundown on where we stand. 

But we’ve gotten a lot of questions from clients, and so we’re going to do a little Q&A. Judson’s going to do a little Q&A with Brad and I, and we’re going to rip through some of these questions. 

Okay. My first question, not related to IPO, but people have been talking about the fact that this IPO of SpaceX could make Elon the first trillionaire, right? Yeah. Yep. 

Who was the first billionaire? You guys know this. Rockefeller? Yeah, I was going to say it’s either Rockefeller or Carnegie or somebody like that. Rockefeller. Okay. And they estimate it was 1916. So we’re talking about a little over 100 years later, he could become the first trillionaire, which is interesting. 

He will become the first trillionaire. He will become the first trillionaire. If anybody’s going to do it, it’s going to be him- Yeah … right? I mean. 

So my friend told me he knows someone that can get me into SpaceX, all right? Can I get into these companies, and should I do it? 

Let’s address the “should you do it.” It was Hunter, by the way. None of this is investment advice, by the way. Yeah, we’re going to qualify this about 50 times, that we are not giving investment advice, but we’ve have to give you answers to your questions. Let’s address the “can I get in before IPO,” “I have a friend who has access,” whatever else it is. 

Look, this S–1 has been filed, listeners. If you have a friend that is somehow saying, “Hey, I can get you in right now,” I think there’s – this is not correct, right? I mean, I think a first question becomes at what value? Because the reality is you should probably just wait for the actual IPO to do it. 

And if the value is less than the IPO price, which is going to be $175 to $2 trillion, why is your friend giving you access to it? Why aren’t they just taking it, right? Unless your friend is Elon Musk, I would, Yeah … probably ignore it. Exactly. 

I mean, the reality is that there are funds out there that you can buy that own it. 

I mean, there are public companies that are out there that you can buy that own it. You mentioned Google. Yeah, I mean, it, this is not complicated. If you want access, you can get it out there, but to say that your friend is giving it to you or, “Hey, is there a way I can get it when we’re only, what, two and a half weeks from it?” I think the answer is no. 

Yeah. The only SpaceX your friend is getting you is bought at a dispensary. Yeah, I mentioned how the IPO market ‘is different. I mean, it used to be if Goldman Sachs was the lead investment banker on a deal, and they would get allocated a ton of the stock, and then they would… 

If you were a Goldman client, you might be able to get some of the IPO shares. But most of those that happen today go to the uber wealthy wealth management part of those businesses. So if Merrill Lynch gets some of this, it’s going to go to, like, their super high net worth customers to try to retain them. Like, the, for the retail guys, it’s just not available for the most part. 

So let’s, I think just the second part of your question, Judson, is should you? Again, hear us loud and clear. This is not investment advice. We are not telling you to buy or not buy this company, all right? And we’re just going to deal with SpaceX first. 

A couple things to address here. Number one, you are betting, we already gave all the stats, 100 times sales. Elon owns 85%, has full voting control at 85%. Their loss was $5 billion last year if you actually use correct accounting. They have piled up $37 billion of losses over their career. No one’s even close. 

Prior to Uber IPO-ing, they only had $8 billion. They have piled up $37 billion of losses, okay? This is 100% a bet on Elon. That’s all it is. Yes. 100%. It’s an Elon meme stock. I mean- It, it’s an Elon bet- It’s a very cool Elon meme stock, but it’s an Elon meme stock. 

And quite frankly, a lot of people have said it, he’s probably not who you want to bet against, broadly speaking. 

So listeners this is, again, this is not a situation where you’re going to put $10,000 in, walk away with $80 million. And this is not a situation where you can expect to make generational wealth necessarily. I would just say that if you believe in Elon and believe in what he’s doing, maybe you consider doing it. Otherwise, the valuation of this company makes zero sense. 

Yeah. It’s being valued based on what he’s saying they’re going to do in the next three to five years. And if he can achieve 60% of that it can kind of work its way into that valuation or somewhere nearby it. If he fails to do some of that, if the economy craters, if something else happens, you’re buying it at the highest valuation I’ve ever seen for a newly public company, and that includes some of the dot com stuff and some of that was just, ideas with capital. But this actually has revenue and stuff. But this is not cheap. This isn’t, like, something your grandma is going to retire on or anything. 

Yeah, I think it’s important to know that these stocks tend to be very volatile. Now, Tesla’s probably the best example because it was a bet on Elon, and obviously it’s done very, very well since IPO. And so it’s probably the best one. It was a lot less volatile than many other IPOs that hit around 2010 as well. 

That being said, well, and I should say in addition, the lockup on this one’s particularly interesting. It’s not a traditional 180 days. There’s actually going to be lower lockups for a lot of the original investors that can begin to get out on certain spots, and that’s actually going to pair nicely with the liquidity that’s going to be coming from the indexes as well. 

So I do think there might be a little less vol. Who knows? Geopolitical things aside. But this could, this will in all likelihood be a very volatile position in your portfolio.  

Alright, Judson, what’s next? Should I buy these stocks at IPO? 

If you’re a big believer in SpaceX and you want to own some- Did we not just spend the last like- Yeah. I was going down the list … no, nobody here is going to tell you not to do that as long as you’re not wrecking your financial plan by doing so. But don’t, but to Hunter’s point you’re not going to go $10,000 to $80 million at this point. 

 If I want to buy, how do I do that? So that’s interesting. We referenced this a little bit earlier. SpaceX is going to be a little bit different, as in what shows in their S–1. 

They’re actually going to offer about 30% of the shares to retail and that’s not normal. Brad, you had already mentioned that a lot of it just goes to the big institutions. They have already named those the retail place custodians that they’re going to give allocation to. Vanguard is not on the list, so if you are a Vanguard person, sorry, you can’t buy it at IPO. 

Schwab and Fidelity are. Schwab just announced today you have to have $100,000 with them in order to even buy it. Then you have to file for a letter of intent, and you still may not get any shares. 

Fidelity said you have to have $500,0000 with them. So this is not something that you can just on June 12th go in when the market opens and buy SPCX with one share in your account that has $5,000 in. 

It’s not going to work that way. If you are interested in it, please talk to your financial advisor, your planner go out and look on the process with your custodian because it is more complicated than just opening your app and buying something. 

Yeah, and those Fidelity and Schwab, they don’t even know how much stock they’re going to get. 

So you have to basically have an account, have real money in there, and file an LOI and cross your fingers, right? 

But again, not investment advice in any way. Just if you’re interested that’s how you do about it, go about it. 

Okay last question, guys. If I don’t get any at IPO or I’m not interested in this crazy valuation, when will it enter into the indexes so I can become part of my diversified portfolio? 

Yeah it’s interesting because the rules here are a little bit different as well. 

I mean, the reality is that, you know, Nasdaq, FTSE, SPY, like they have rules on when they let things in, and Brad, you can talk through those a little bit. That being said, as I mentioned, there are opportunities as original investors are going down that the indexes will be given opportunities to put this in to help balance that out, right? 

Because that can create significant volatility like we saw with Facebook back in the day when everybody exited and the stock just went- it just plummeted overnight. The index, I think, is going to be used a little bit, Brad, as a buffer to help as people sell off. 

Yeah. Each index company has defined rules, so let’s just take everybody’s favorite, the S&P 500. 

In order to be included in the index, their original stated rules are that you had to be public on a listed exchange for a year, and you had to have shown a cumulative profit for those four quarters. Doesn’t mean you have to be profitable every fourth quarter, but you had to have a profitable business in that running four quarters to even be added to the index. 

Nasdaq had something similar. It was shorter. You keep going down, MSCI, they all have different rules, but they all had some wait period, and they are all basically filing to bend those now. So I’ve heard it, it’ll be in the S&P by the fall. I’ve heard it’s going to be in the Nasdaq basically in a couple weeks after it’s IPO’d. 

It’s going to be included in the Vanguard Total Stock Market Index within five days of its IPO listing. And so to Hunter’s point, when those get added to those indexes, all the indexes rebalance to buy those shares, and so that’s going to create a lot of liquidity. And we, Judson and I kind of talked about this later. 

That money’s going to be coming out of other index constituents in order to buy this and provide that liquidity to it. And so that’s going to be a very interesting process. I don’t like this, if I may say so, because what happens when you IPO is that you go through a six-month to a year period where you get price discovery in the market. 

Investors are buying and selling it, the business is moving around, and you kind of arrive at a price for a market cap for the business, and then it gets put into the index. 

Now, if you’re putting it in the index early, it’s just going to kind of justify current valuation or wherever it’s trading on that day, and all that money’s going to be coming in, and it’s going to kind of distort that. 

So again, that’s something to consider if you’re buying this. If it’s overpriced by 30%, it may not have the opportunity to reprice down 30% before the indexes start jumping in, and that’s just a– That’s 60% of all investment dollars are coming from ETFs these days, so that’s a tremendous amount of money. 

Yeah. Listeners hear us out. Most people don’t know what’s going to happen. We are not the only ones. I was actually up in New York City last week meeting with an asset manager that has $2 trillion, and I asked this question, and they were split internally on what’s going to happen to the index, when it’s going to get in, what are going to be the implications, what’s Vol going to look like. 

And then you layer on top of that geopolitics and inflation and interest rates. This is going to be probably the story of 2026, which is why we spent so much time on it today. And goodness, I hope this was helpful. It was fun. It was very fun. 

Now, my last question of the day. You got the right first billionaire. 

Does anybody know who the first millionaire is? Now, this doesn’t include monarchs because monarchs didn’t really report, and they were probably more than a millionaire, but the first self-made millionaire. Any idea? Like in the world or the United States? I mean- Well, it is in the United States, but he’s the first credited as being the first millionaire. 

It’s have to be somebody around railroads or something like that. That’s all I can think of. Yeah. It wouldn’t be banking, because they had to have been in there before that. 

Charles Ponzi. John Jacob Astor. Oh, yeah. Oh, okay. Yeah, that makes sense. Fur trading into real estate into international commerce. Good call, Hunter 

Yeah. John Jacob Astor. Is he a part of one of them songs that we used to sing? He is John Jacob Astor, Hymer Smith. La, la, la, la, la, la, la. I don’t think that’s how it goes. 

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