Our Editors Discuss Spacex's Historic Public Debut And How Investors Are Thinking About The Right Time To Buy

• SpaceX has finally gone public in the biggest IPO in history.
• Two of Business Insider's editors and newsletter authors sat down for a live Q&A to discuss the historic IPO.
• They talked about the first day's price action, Elon Musk's role in the company, and what comes next in a year of mega-IPOs.

SpaceX, Elon Musk's aerospace, satellite, and AI company, has finally gone public. Shares were priced at $135 each Thursday afternoon, making it the biggest initial public offering in history. The stock's early price bump on its first day of trading helped cement Musk as the world's first trillionaire.

Joe Ciolli, executive editor and First Trade newsletter author, and Dan DeFrancesco, deputy executive editor and author of the Business Insider Today newsletter, sat down for a live Q&A to talk about the record-breaking IPO on the first day of trading.

They discussed the fairness of the company's valuation, if there is a "right" time to buy, Musk's influence, retail involvement, and what this IPO means for Tesla, OpenAI, Anthropic and the market in general.

This transcript has been lightly edited and condensed for clarity.

Dan DeFrancesco: Hey, good morning, good afternoon, good evening, wherever you're tuning in from. Thanks for being here. My name is Dan DeFrancesco, author of the BI Today newsletter.

Happy SpaceX Day. The historic IPO is now in the books, and Elon Musk's rocket company is officially trading after raising $75 billion in a historic IPO at a $1.77 trillion valuation. It's officially hit the public markets. Popped about 20% when it first started trading a little bit less than an hour ago.

We have a lot to unpack today, so I wanted to bring on my colleague Joe Ciolli, author of the First Trade newsletter, who's going to help me talk through a lot of your questions and comments. Joe, thanks so much for being here on this historic day.

Joe Ciolli: Yeah, thanks for having me. I'm pumped to talk about this with you.

SpaceX IPO: Is it a buy or a bust?

Dan DeFrancesco: Let's start with the initial market debut: a 20% pop, which for those that don't know, is about the sweet spot for where you want to be for an IPO. What are your initial reactions as it's trading within the first hour?

Joe Ciolli: I think with the 20% pop roughly, the bankers on this deal earn their money, they earn their fee. It's perfect, because you want the stock to go up something, because you want the existing shareholders to get a nice jump off the first day, but you also don't want it to go up 100% because that means that you priced it too low, you left money on the table, you left proceeds out there that you could have raked in. So it's not too cold, not too warm. It's nice Goldilocks position right there at about 20% higher today.

Dan DeFrancesco: Yeah, it's also interesting when you consider the uniqueness of this. First of all, it's the size: largest IPO ever. Second of all, it's the fact that there was not really price discovery for this, as far as with the road show. Elon just comes out and says this is the number I want, so there's that factor.

And then there's, and we'll get into more of this a little bit later, the retail factor. The factor that 30% of the shares were allocated to retail investors, a much larger number than typically. So all that considered, it basically hit its mark. I'm looking now, it's still trading about 22% of a pop. Pretty impressive, I'd say. Right now, early days, so far a success.

Joe Ciolli: I totally agree. There was a lot of worry about that retail allocation. They offered 30% to day traders, and there was other stuff like Fidelity lowering its minimum account requirement to $2,000 from $100,000, like they really wanted retail to get into this trade.

I think a lot of the fear going — at least from retail traders on the internet and from skeptics, including those that have written into us — is that maybe these retail traders are just kind of being set up to hold the bag for all of the longer term shareholders that are going to mint their money and hop out as quickly as possible.

That hasn't happened yet, but you know it's still early innings, we're still only public for the last 60 to 90 minutes, so there's no guarantee that today the moves are going to hold. Or maybe we'll go up 100%, but it's still early innings, but you know, so far looking good.

And just a couple numbers to recap how unprecedented this is. We have a chart that shows that this is the biggest IPO ever. It's raised the most proceeds, $75 billion, that's roughly triple the next closest, which was Saudi Aramco several years ago, so that's pretty monumental. And then when you look at the actual market cap that it entered the market at, $1.77 trillion, that is the most ever, again exceeding Saudi Aramco. And with this 20% spike, we're actually north of $2 trillion. So SpaceX is now 90 minutes old, and also the seventh most valuable company in the world. So not bad, Elon.

Dan DeFrancesco: Not bad for 90 minutes work. Yeah, no, it's really incredible, and that's why we're so excited to talk through all this.

So we're gonna start with the big question that everyone had coming into this, and people maybe still have is: If they would buy the IPO, if they would buy the stock.

So we put up a LinkedIn poll, almost 2,600 of you voted, and most, 69%, said no, versus 31% said yes. But the beauty of this company, of the CEO, is that regardless of which side you fall on, your opinions are probably pretty strong, which makes it a fun discussion.

Let's start with the valuation, which is the big topic that a lot of this is coming around. We have two schools of thought.

Joseph in Boston writes: "Meta at IPO was a 28x PS; SpaceX at $1.75T is close to 90x. I'm never the smartest man in the room but I'm okay sitting this one out."

And then on the other end, you have a reader in California says: "Yes, it's not profitable, but SpaceX is lifting 83% of satellites into orbit, reusable rockets making each lift cost-effective. Starlink, energy producer, robotics equals great potential for the Musk conglomerate."

So that I think, in a nutshell, is the two arguments there, Joe. I'm curious, if you have thoughts right off the bat about this remarkable valuation, and whether it's fair or foul.

Joe Ciolli: Yeah, the first person to write in really said it all. This company isn't profitable, and it's the only company in the upper echelon of market cap in the world that isn't profitable.

But to the other point, this is an Elon Musk property that we're talking about, Tesla, which is right now about the 10th most valuable company in the world. It wasn't profitable until very recently, and it achieved massive valuations without profitability, and eventually the people that stuck it out held the stock through those unprofitable years. They have been paid out pretty nicely.

So that's the age-old conundrum. Are you investing in Elon and his vision for 10 or 15 years down the road, for putting people on Mars, and transforming AI, or are you just, looking at this expensive stock that doesn't make any money and just saying, maybe I'll wait til they start making money, so that's the dichotomy that we see, and both points are very fair. If I knew the answer of which way it was going to go, I'd probably be trying to run a hedge fund somewhere, not talking to you right now. So let's let the market tell us what the price is, and how and whether this company is fairly valued.

Dan DeFrancesco: The thing I will say on the valuation bit, though, is I definitely appreciate why people's palms get a little bit sweaty seeing that number, especially for a company that's not profitable. But if you look down the pipeline of what's coming, and the two big ones are OpenAI and Anthropic, those numbers aren't going to be any better either. So people, and at least SpaceX, is a little bit more mature as far as its rocket business and Starlink, so not here trying to carry water for anyone, but I am saying, we're kind of entering this new era where people are investing incredible high amounts into capex. They're having a tough time turning profitability.

I'm not saying it's a bubble or it isn't a bubble, but this is a little bit of the new reality. So, to point at that number, fair, but then you also have to realize this is kind of a little bit of the new name of the game for a lot of the new players that are coming in.

Is there a 'right' time to buy?

Dan DeFrancesco: I want to pivot to another point that has come up a lot, which is the "right" time to buy. So, Hunter from Atlanta writes: "Like most IPOs, unless you're in pre-IPO levels, then it's not worth bidding for the day of. Most of these tech stocks lose at least 10% value in the first week. That's when I will make the decision on whether or not to invest. Maybe even after that point."

Sam in NYC says: "Not at IPO but definitely will be down the road. Mars, robots, autonomous cars equals the future."

So I think it touches on an interesting point that I've seen a lot, I'm sure you've heard a lot from people you're speaking with, is I don't like it at IPO. I do like it in the long run. I just got to time it right, which I mean, story of every investor's life. Good luck. I don't know what's your sense on the "right" time to buy.

Joe Ciolli: Yeah, the main thing that's looming over people that want to wait is the lockup period for people that the insiders that own shares, you know, the people that have worked at the company forever and are one of those thousands of millionaires that are going to be minted today on this pricing. So yeah, I think that there's definitely a consideration.

I also, think that, once you once you think about, Elon Musk can't sell for a year, and he's someone that isn't really going to decide, you know, what I'm going to take half my money out of this, like he'll sell at predetermined intervals, but I think it's just that intermediary period, you know these staggered like 30, 70, 100 day windows, and people are worried that if they do buy in now, that as soon as the people that inside the company that have, already kind of seen their, their net worth rise on paper to astronomical levels, like who's to say those people aren't just going to sell, quit their jobs, and you know, go buy an island or something. Because there's a lot of them, and so that's what they're worried about.

So then it's like, do you wait until the full year is up, do you wait until the first two rounds, and that's that's a tough question, and I think to the point of like, if you're someone that's gonna buy and hold SpaceX for 10 years, or you really believe in the people on Mars thesis that's behind a lot of this, it might not make a huge difference whether you buy now or in six months in the grand scheme of things, with the upside that you're imagining might exist in the stock.

So it's really just a matter of personal preference. We've thrown around the saying, you know, trying to catch a falling knife. We talked about that, and I think that, like, the stock has to drop for it to be a falling knife. But I mean, that's that's also risky. If you're trying to bottom, you know, bottom hunt and find when this stock is going to be attractively valued. You might either be waiting a while, or you might just get that timing wrong, and I think it's just as penal to, like, buy too late as it is to buy too early, right?

Dan DeFrancesco: You hit the nail on the head there on a couple points, but specifically the concept of if this is a company you believe in in the long term. Okay, sure, there's going to be some volatility, like, when you talk about Elon Musk and what that comes with investing with him or in his companies, but ultimately, if you believe in the mission and you believe the direction that SpaceX is heading, and you think it's a good long-term bet, do you really want to wait a month, two months?

Because, you know, Skip in Georgia talked about, he said never buy until after the expirations, which is something you touched on, but it's a little bit unique here, as far as there's the staggered release schedule of when employees can sell shares.

So a lot of it comes around the first earnings report that SpaceX will have, which should be the late summer, and then depends on the stock performance, more can be released. And then to your point, like this, these, this concept of over the next couple, you know, whether it's 70, 90, 105 days, and then as far as some of the strategic investors in Elon, it's an entire year, so it's not like there's this drop off point, this cliff, where it's like: oh, all bets are off now, everybody can go, it's going to be staggered throughout, so you might not necessarily see that massive drop to your point that knife that you can catch, and if you sit it out and you believe in this company, you're going to miss on some big returns that you can get in, potentially.

Joe Ciolli: Yeah, and a lot of times, like on these IPOs, we had one of our readers say, IPOs have been falling 10% in the first week, and I think that's been relatively true.

We did see a really successful tech IPO, Figma, last year. We've seen Cerebras, which was a cybersecurity stock that had previously the best IPO of the year. So we've seen a couple data points, very small sample size, but to show that maybe that that decline isn't going to happen.

But, of course, SpaceX is a unicorn, it's sort of its own deal. It's done everything kind of unconventionally, so I wouldn't expect it to follow any traditional pattern. So, it's really anyone's guess how this early going goes. But there is a very real possibility that this stock doesn't drop down to the level that it priced at for a while if the euphoric retail investor phase continues like it is now.

Dan DeFrancesco: Yeah, I mean, we're holding firm right now, a little bit over 23%.

In the YouTube chat, Stupid Smart asked, to buy now or wait for those planning on holding for 10 plus years.

Again, I think if this is your long-term play, this is something that's just gonna sit in your portfolio, and again, and you believe in SpaceX as a company in Elon. I don't know if trying to price it out over the next couple months is really going to be beneficial to you, but I think you mentioned it's not traditional.

The one comparison we had some of our reporters make, was the Facebook IPO, which, already to be clear, this is going way better than the Facebook IPO went way back when. But maybe talk through about like that volatility, and how in the long run for people that were invested in long run, it ended up being fine, even though they had to grin and bear it for a bit.

Joe Ciolli: The Facebook IPO, we thought it was gonna be a parallel that could play out, but it tanked right away. I think the overwhelming consensus was that bankers got too ambitious with what they were trying to raise, or the price they were trying to target, and that was really like a turning point for tech IPOs broadly.

I think it was almost sort of like their financial crisis moment, not that it was that bad, but it was something that re-dictated the calculus for every tech IPO after that, and made things more conservative, and put more controls in place, so that couldn't happen again.

So that was in 2012 so this is over 10 years ago, and then there was also technical issues with the exchange that it went public on, and it's been 14 years, so we've got much faster internet, much better technology, and doesn't seem like there's any snafus with the plumbing of this offering. So that's good, and then for Facebook, it went down. It was, you know, in the doldrums for months, and it didn't really overtake its where it priced for several months, and the people that got in at the IPO and waited it out on the dip and wait back on the way back up.

I mean, look at Meta now, it's just absolutely astronomical over the last 15 years. So, it's been a good bet. Does it really make a difference whether you caught that falling knife at the very bottom, or you just kind of like picked it up somewhere else on the curve? In the grand scheme of how much Meta has gone up, not really. So that's again, there's good and bad takeaways and parallels to be made to what's happening today.

What role does Elon Musk play?

Dan DeFrancesco: Well, there's the saying, pinch a penny, lose a pound, you know? If you're in it for the long haul, I think you just got to kind of buckle up.

But a viewer in the UK asks: "What if something happens to Elon?"

The "key man" risk factor of Elon. So, I think we can have a broader discussion now about Elon. First of all, congrats to him, he's now the world's first trillionaire, which it blows your mind to think about. But beyond just the key man risk.

We also have this question from Susan in Overland, Kansas, who says she made her decision because of Elon Musk. That's all she said, which I kind of love, because it's unclear if she made that because she's going to invest in it or not invest in it because of Elon Musk. But it's a valid point, and it brings up this wider discussion of this polarizing figure that is Elon Musk. Plenty of people have gotten very wealthy backing his companies. Plenty of people don't like him. I think off the top, how much, especially with the increased political activity, I'll say, that we've seen from Elon over the past couple years, how big of a factor does he play into this entire investment decision for our viewers.

Joe Ciolli: I think he's the factor, especially with an innovative company that's still not profitable, that's still probably 10-15 years from really achieving its final vision or form. You're really making a bet on the person, and, like you said, betting on Elon in the past has been an extremely lucrative proposition, whether you got in on Tesla in the 2010s at some point. If you did, you know, I hope your yacht is nice. Good to see you. And then you know, if you just like kind of wait out any dip in Tesla, it almost inevitably retakes it within several months, and reaches new heights, and it's happened continuously for over a decade now.

But as for the reader question: What happens if something happens to Elon? Well, we kind of got a dry run up, and when I say something happens, like he went and worked for the government for several months, and he seemed to be focusing all his attention on DOGE and optimizing the government's finances, and all that stuff that we covered breathlessly here at BI. It was a huge national story. Well, during that time, Tesla stock didn't do very well, and a lot of it had to do with, you know, Trump and Elon butting heads after a harmonious relationship.

At the beginning, they started butting heads. All of a sudden, Trump's saying, "I'm going to do stuff that's going to mess with Tesla," and the stock is getting hit, and people are saying: who's driving the bus if Elon's in Washington, who's making our cars, who's doing Robotaxi, does this guy have time for this company that's worth a trillion dollars? And so they were worried, they saw a big stock slump. Then wouldn't you know it, right when Elon was like, "I'm out of the government, guys, I'm going back to Tesla," stock went back up, rest is history.

So, you know, Elon needs to be at the helm, he needs to be running the show. People want him to be sleeping in the warehouses, they want him to be on the front lines at these facilities, being the master engineer that he is. So, he is everything, I would say.

Dan DeFrancesco: Yeah, and look, ultimately, you have a gun to your head: do you want to be investing with the world's richest man, or do you want to not be investing with the world's richest man? I mean, I think most people would say they'd want that guy on, or that person on their side. I will also say, not to discount the work of SpaceX COO Gwynne Shotwell, who's done a fantastic job, and as Elon has worn the million different hats that he has, Shotwell has done a really good job of continuing to keep the company moving forward. But I think it is a real consideration that everyone needs to discuss.

What about purchasing shares in partner companies?

Dan DeFrancesco: Another question we have from David in Dallas, mentioned: "I selected a few shares via Robinhood. Another option is to purchase shares in partner companies today, before the IPO. Echostar, Firefly, Rocket Lab, and others."

Joe, as a market expert, do you think that strategy holds? It's like I want exposure to SpaceX, but maybe I don't want to go full in. What are your thoughts about kind of playing with the players that do play with SpaceX and kind of riding off its coattails?

Joe Ciolli: It's a great idea. It's a great diversifier. If you're going to own SpaceX stock, I think it's a good idea to own these other ones as well.

But here's the thing, the cat's out of the bag. Everyone knows that these companies are linked to SpaceX, and everyone has known that SpaceX is going to be going public for several weeks or months, and the moves affiliated with SpaceX have been priced into these stocks already.

They went supernova when we found out that this thing was going to be hitting the public market, and really, with any new valuation round or any new positive news around SpaceX historically, these stocks have been proxies for that. They've gone up. So, is no one looking at this? Are you going to find a steal in the bargain bin on these stocks? No. But are they a good option for diversifying and hitching your wagon to SpaceX-exposed investments? Absolutely. Just don't, don't think that you're the first person to have that idea, and I'm not saying you are, but like it's, it's definitely a known trade, but one that could still make you a lot of money.

Dan DeFrancesco: As the wonks say, they're not a ton of alpha there, necessarily. Right, it's not this hidden gem. I'd also say, and look, not financial advice, don't take this. We should have disclosed this upfront. We're not financial advisors, but I would say, if you're bullish on SpaceX, right, why not just bet on SpaceX? If you're betting on the partners, there's the risk that something specifically would happen.

The partners talk about Elon, maybe he has a falling out with the vendor, you know, whatever reason there's the downside risk of that stock, and the upside is already going to be built in with just investing in SpaceX.

I don't see it as much of a play, like if you're that bullish on SpaceX, why not just back SpaceX, but again, not a financial advisor, so do as you see, do as you see fit.

Why did SpaceX open the IPO to retail investors?

Dan DeFrancesco: We talked about the retail, right? 30%. SpaceX President Shotwell also mentioned on CNBC that the demand from the regular people pushed the company to go public. You wrote about this in the First Trade newsletter, which is a must-subscribe if you haven't already. There was a lot of discussion about the retail involvement and allocation in this IPO.

Was it Elon democratizing finance and letting the little person get a shot, or was it institutional? We got to fill the void somehow. Let's get the dumb money involved.

Joe Ciolli: I'll give you the PR answer, and then I'll give you what I think is probably the right answer.

The one that I think is the prevailing narrative online. The PR answer is, yeah, we're democratizing finance, we see all of our legions of Musk fans out there that have backed Tesla during lean times, and we want to throw you a bone, give you an opportunity for generational wealth, hitching your wagon to this great company that sounds awesome, you know. I'm sure people really appreciate that. Anyone who wanted to buy the stock on the IPO had a much greater opportunity to do so. So, yeah, that's one piece of it.

But then, if you do look at online chatter, there's been a little bit of cynicism, and maybe not a little bit, a lot of cynicism around why this is happening. I guess the logic is, why would a company just give something away as a favor? Is there something more nefarious going on with institutional demand? Is it not as strong as what we thought? Are they basically trying to supplement that demand with retail traders? And so, yeah, it's been unclear, you know, which one it is, but people are cynical about it. Still, the stock's up, so if you bought it on the IPO, you've made 20% today, you're looking good.

Dan DeFrancesco: But even more now we're up to where you've eclipsed 25% closing in on 26%. That's the beauty of doing this live, you get it right here.

I see both sides. I see it on the one hand of a famous saying: I would never be a member of a club that would have me. Like, if you are trying to actively, aggressively give me something, especially on Wall Street, something's probably up. You know, I'm probably being sold a bad bill of goods.

The counterargument, right, is that this is a company that's been private for a very long time. It's raised a lot of money from institutional investors, and they just might feel like: Look, we are already extremely overexposed to it. We do like it as a company, right, but we've already pretty heavy in it.

And this is, I don't mean to, again, like carry water on the PR side of it, but that's the flip side of it. But to your point, we're a couple hours in now, and stocks performing pretty well, so those who did end up jumping in, are ending up on the good side of it, so far.

Tesla: How will this affect Musk's 'old toy?'

Dan DeFrancesco: I want to talk about the other Elon company, Tesla. So I think this is super interesting. In the S-1 for SpaceX, there was a mention of potential mergers or acquisitions. A lot of people naturally pointed to Tesla.

You mentioned Tesla before. It's another trillion dollar giant. It's huge, has a very strong retail base. You know, I was watching it earlier today. It dropped a little bit more than 2% at one point when SpaceX started trading, now it's back up. It's basically flat.

I find it a really interesting thought process, you know. One, if they stand alone, what happens to those two stocks? If we see SpaceX continue to perform, do the Elon fan boys just go, "Well, this is the old toy, now we want to go to the new toy?" Is there a potential for an acquisition, and then we get into this idea of an even more of a Frankenstein Elon conglomerate company? But what's your takeaway on the SpaceX-Tesla sibling rivalry?

Joe Ciolli: That's a really good question, and I think it's something that is still yet to play out. Tesla is basically flat now, it's been notable that it's not like getting any sort of huge boost. There's no Elon trade that one one thing goes up and they all go up, apparently.

So, and I think the old toy analogies is a good one. If Tesla has historically been a bet on Elon and there's a fresher bet on Elon, and there's honestly more stuff under the hood of SpaceX then you could say of Tesla, because it has the space business.

But it's mostly going to be an AI company eventually, that has a $28 trillion expected addressable market. Eventually $26 trillion of that is going to be AI and like $600 billion will be space and so it's gonna be an AI company. It'll be more of a pure-play AI company than Tesla, because it has xAI under the hood.

So let's, let's imagine that happens, Tesla starts to fall out of favor, maybe people are even funding their SpaceX purchases by selling Tesla. We definitely saw retail investors leading up, kind of trying to create dry powder for themselves by selling other AI stocks, so it's very much within the realm of possibility.

But I'm gonna drop the hammer here, and I'm just gonna say, what if they merge? What if there's one big Elon conglomerate that's Tesla and SpaceX combined? I'm not, that's not just me, you know, saying BS, like that's definitely something that's been on the ether, it's something that's been rumored, and I think it would really address a lot of this, like this risk that you're seeing if there's two separate entities that kind of are both pegged to Elon.

Dan DeFrancesco: Yeah, I mean, look, there's only so much money these Elon fans have to invest, so ultimately they have to make a decision, and I think in a lot of ways it makes sense that the SpaceX trajectory as an AI company is very much in line with Tesla's trajectory. Like we've heard on the earnings call, he's not pitching it as an EV company anymore, he's pitching it as an AI company, he's talking about robotics and all these different things. So in that sense, there is a lot of synergy, and to your point, like just making it Elon Inc., right, and letting everyone buy in on SpaceX. I think that makes a lot of sense.

The flip side is, I think this is a lot of the criticism heading into for the potential Tesla merger, is that it becomes this kind of Frankenstein company, right, where you have all these different things: you're doing social media, you're doing satellites, you're doing rockets, you're doing AI, you're doing EV, you're doing robotics, and sometimes investors don't like that. They want a pure play, they want to understand this is the space I'm in, because on the one hand, while it gives you diversity, it also gives you a lot of risk, because if one of these things, a lot of these things couldn't work out, and you're spending a lot of money.

So I do see it, not to be middleman Dan here, I do see both sides of it, and I think it's, it's really interesting, and will be fun to watch, if nothing else.

OpenAI and Anthropic: What does the SpaceX IPO mean for them?

Dan DeFrancesco: I guess the other question I had for you, Joe, but now that, again, not to call things early, but we're in, we're now up to 27% almost 28%, What do you think the folks at OpenAI and Anthropic are thinking as they're watching this? Again, those are more pure AI plays, but they've filed paperwork privately, they're eyeing this. What's your sense of how they're viewing this, and what are their thoughts on entering the market?

Joe Ciolli: I think they're pumped. They're popping the bubbly over there. They're, they're like, you know what? We're gonna get what we want. We're gonna get the proceeds, those huge proceeds. And the market is revved up for these things associated with AI and for, you know, these innovation companies going public this year. So yeah, I think that they're, they're clinking their glasses.

I think there's probably a race to see who can get out first. Because, you know, we talk about retail investors having limited dry powder or, needing to make, make selective allocations as to which stocks they're gonna own. I have to think there's a first mover advantage there.

Anthropic did confidentially file its S-1 first, then OpenAI did it second. I think that it was kind of viewed that OpenAI was winning and then Anthropic leapfrogged it. So, and that's kind of Anthropic's vibe. They're like very confrontational with OpenAI. Like they run commercials about Claude that are very confrontational. So it's gonna be awesome. And as a markets reporter, I can't wait for them to go public and reshape the market and how tech trades.

My mouth is watering at the prospect of an Elon Musk Frankenstein entity. But, that's neither here nor there. I think it's a really exciting time. Silicon Valley — and we've written about this across Business Insider, across our tech team — it's gonna be reshaped entirely. Like there's a ton of people that are coming into a lot of money all of a sudden, and they're not the people that had it before. So how is that gonna tilt the scales in the Bay Area, or in Austin or other tech hubs? It's gonna be really cool to watch and we're gonna be all over it.

Dan DeFrancesco: Yeah, lots of discussion about what this means from a market structure perspective, from a real estate perspective, from a corporate culture perspective. You know, the other thing you see with a lot of these types of events is there's a big IPO, a bunch of people make money and then they go out and start their own companies. I mean, that was Elon's origin story, coming from the PayPal mafia.

How will this affect the Nasdaq and S&P?

Dan DeFrancesco: You mentioned the market structure thing. I want to touch on that too because, you know, SpaceX got fast-tracked to get in some major indices. Other ones said no, but that is a big piece of this puzzle. The fact that because it's coming in at such a large size, there's gonna be forced buyers. And we talked before, should I buy, should I not, you might not have a choice in your portfolio, in your pension and your 401k, you might already very soon, within the next couple months, be a buyer of SpaceX because of the ETFs or whatever else you're invested in is forced to buy SpaceX,

Joe Ciolli: So the one that's gonna be most immediately impacted is the NASDAQ 100. It's fast-tracked SpaceX, it's gonna be in there in 15 days, that's really, really soon. And, so I mean, Invesco, QQQ, the ETF, if you watch basketball, they advertise it on the score scores box, you know it's out there and it's got major assets under management and a lot of people own it.

And it's been doing really well because tech stocks have been doing really well. A lot of people own the Q's. So the Q's are just gonna get completely thrown on their head because this is a $2 trillion company at the moment, and it's gonna suddenly come in here and take a commensurate weight in that index.

There's only a hundred stocks in there. It's gonna start pushing it around the same way that we see all the other major AI companies, other major tech companies, like Alphabet, Microsoft, Apple, Meta. It's right up there in that elite rung. And I think we're gonna need a new acronym because we call these things MAG seven, we've called them FANG stocks, like what's the new acronym that includes these new companies? I think that's maybe a job for us, Dan.

I'm not gonna start brainstorming live on the air here, but that's something we need to do. But then the S&P 500 is not gonna have SpaceX in it until the normal waiting time of a year. So that really creates a situation where you have two major indexes that normally traded a certain way. The NASDAQ usually trades it probably two or three times, the S&P on the way up, on the way down, it's just kind of got a higher beta to the market.

So if that thing has this huge company coming in fast-tracked, and assuming that the other two, Anthropic and OpenAI are gonna get in there eventually, and those things aren't in the S&P for, you know, 11 and a half months, those two indexes are gonna start trading in an uncorrelated way that we've never seen. I can't predict what that's gonna look like, but it's gonna be very interesting to see, like if there's any arbitrage opportunities between the S&P and the NASDAQ going forward.

Anything else that stands out?

Dan DeFrancesco: I'll be honest, I've just been trying to think about acronyms now that we can use and, and shorthand. I just love it. But yeah I totally agree. I think this is a historic moment, not just because of the size, because of what it signals for the future of the stock market.

I just wanted to read off some other comments that we're getting from LinkedIn.

Joe in Australia: "Yes, as a long-term investment," so then sides with, you know, this is my long-term bet.

Joseph in Grand Rapids says: "Overvalued. Every big IPO drops after people are allowed to sell," you know, in hashtags after the lockout period.

We also have Carl and Sweden: "Overpriced, overhyped, and the top management fails on all KPIs. "

Tom in West Virginia: "And I'll flip it really quick, it's just a big bag of Elon hype. I mean, there is value there, just not at these ridiculous numbers for the long term. So get in fast, get out fast, but under no circumstances, hold the stock. Just like at a Vegas blackjack table. Take your winnings and then run for the door."

I don't win much when I'm at the blackjack table. So I don't know what that is like, Tom in West Virginia, but let's definitely hang out.

I do like this reader from Ghana. I think it had the most salient point, and it's a good one: "$1.75 trillion valuation for a company that isn't profitable yet? That's either visionary or bonkers maybe both. The hype is real, but so are the risks. I'm curious to see if retail investors go all in on the Musk magic or take a wait-and-see approach. Personally? I'd probably let the first few days of volatility settle before jumping in."

I mean, that's it in a nutshell. This could be the best bet ever. It could, you know, crash and burn right now. It's looking pretty good. We're almost at 29% up for the day. By and large, I think, so far obviously a pretty successful IPO.

Is there anything else, Joe, before we let our viewers go, that you're really interested now in the aftermath? I mean, certainly we'll see how it continues to trade in next week, but anything else that really stands out to you?

Joe Ciolli: Yeah, well, I guess first off, I think we should probably just keep going. It seems like the stock's just been going up since we started talking. Should we just talk this thing up to a hundred? Like how far can we push this thing? I mean, we're almost at 30, so I think we're a good luck charm.

In terms of my final thought, I think that retail is the story here. One of the bear arguments that I've heard is that because of the huge retail allocation early on, because 30% of shares were given to them, and just because everyone that wanted to get in really had the chance to, it wasn't like anyone was locked out.

A lot of people got in now, so are they gonna buy more in a week or two weeks? What's next? Like, are they gonna do what one of our last readers just said and just pop in, pop out, take your profit, walk away from the blackjack table? I don't know. So one of the bear arguments is that because they essentially went so big on retail right off the bat, that retail might not be able to sustain this groundswell of interest over a longer period of time.

Of course, retail is not the only game in town. There was really strong institutional demand for this. One of the stats that I saw from the Wall Street Journal was that BlackRock put in for $5 billion, and that is almost as much as Cerebras, the previous biggest IPO of the year, raised in its entire offering.

So that just gives you an idea of the scale of the SpaceX IPO and also the fact that there was institutional interest and maybe the demise of that was greatly over exaggerated. So yeah, I'd say keep an eye on retail. There's various research firms that track the retail interest, and it can be a leading indicator. Like if retail starts to get cold feet, then that could permeate through and because of the huge chunk of shares allocated to them could end up being market moving.

So yeah, watch out for that, but yeah, it's an exciting time. Congrats on Elon on his trillion, and think big everyone. He certainly has and look at what, how it's paid off.

Dan DeFrancesco: It's paid off. Well, we're just shy of 30% now. Just real quick on the the retail point. I feel like a lot of people like to pick on retail traders. They point to Wall Street Bets and things like that, and they say, oh, it's the dumb money.

And, and look, there is some evidence of that at times. But retail traders, as things have kind of opened up, as the market has opened up, they become pretty sophisticated in a lot of ways and very smart sometimes in holding.

So I think the, the, the immediate stereotype or the immediate knock on, well, it's a ton of retail money, and that's dumb money, and they're just gonna sell and, and they're gonna hold the bag for everyone else. I think in cases that has been correct, but at other times they have turned out pretty well, and they've done well. And certainly a lot of times with Elon, they've invested in the long run. So I think to immediately cross this off as well, because a ton of retail has been invested, this is dead, and we need to wait till it drops as we're seeing now, it's not necessarily turning out. I mean, we're just, we're just shy now of that 30%.

Joe Ciolli: Yeah, I think you're right. And, I think retail is gonna continue to be the story. Retail and its relationship with Elon is kind of at the heart of all of Elon's properties and at the heart of all of his prowess in the market over time. And you know, I think that you're right. Like it's not really dumb money anymore.

Hedge funds scrape online forums for sentiment data. They use retail traders as an input to make their professional investment decisions because they realize there's something going on there that's worth paying attention to, and that these people are more sophisticated than they used to be. So that's absolutely true. Team retail, they've definitely grown into their shoes a bit, and this is a big moment for them. And I'm happy for anyone who, you know, bought in and is seeing this nice 30% spike today.

Dan DeFrancesco: I saw we touched 30%, so that feels like a good time to end it. Joe, as always, I appreciate you coming on and riffing on all this stuff. So thanks so much for taking the time. To you, the viewer, thanks so much for tuning in. Subscribe to BI Today, subscribe to First Trade, let us know what you think in the comments. And until next time, thanks so much.