This Makes No Mathematical Sense

[00:00:00]Today, we're talking about both rockets and money, which is appropriate because the sponsor of today's video is Rocket Money. I'll tell you more ABOUT THAT LATER. SPACEX HAS FINALLY IPO'D, and a lot has happened in the few days since that has made me want to rip my hair out.

[00:00:15]The financial numbers of this whole situation, both Elon Musk's net worth and SpaceX's valuation, make so little sense they must be explored. But first, we have to celebrate with THE MAN.

[00:00:26]>> [screaming] >> YEAH!

[00:00:28]WOO!

[00:00:30]>> [cheering] >> THE SPACEX IPO!

[00:00:36]EVERYBODY'S CHEERING. And everybody in this room is actually cheering. They're not just faking it for their boss because almost all of them became millionaires from this. SpaceX IPO'd a few days ago at $135 a share, roughly a $1.75 trillion valuation, and immediately it took off like a rocket, popping 20% in the first day. And then you'd think, "Okay, well, that's insane." And it didn't stop. It kept going like a rocket until it passed Amazon.

[00:01:06]From $1.75 trillion to $2.6 trillion in two days. Then it kept going. I'm sorry, wait. I had to pause right there because uh Elon Musk took this opportunity to call Amazon fake and gay thanks to Grok.

[00:01:18]>> [laughter] >> Classy. A classy way of handling this.

[00:01:22]And then it kept going, and it passed Microsoft briefly, nearing $3 trillion in valuation within three days of trading. Now, if you check companies by market cap today, SpaceX is hovering right around fifth or sixth, which is just genuinely insane. And this valuation, this massive spike, has made Elon Musk immediately the world's first trillionaire, as declared by Forbes. So, congratulations to him, huh?

[00:01:49]He is now top of the list. Now, he was $1.1 trillion on the first day of listing immediately, but after a few days of continued rising, he is now done not just the world's first trillionaire, but a trillion dollars ahead of the next guy. He could lose a trillion dollars and still be the richest man in the world. It's the >> [laughter] >> It's a really unique time. And I'll explain why this is such a comical number given the valuations of the the economics of the companies in a second.

[00:02:19]But first I want to say, this is a great loophole he just discovered. Because people like to say things like there are no ethical billionaires. And Elon Musk has often pushed back against that saying, you shouldn't insult people for being billionaires. It's morally wrong and dumb being billionaires on a pejorative. But now he's sort of found an airbud style loophole.

[00:02:38]>> [laughter] >> There are no ethical billionaires, but there's no rule about trillionaires, okay? If you consult this graph, you'll notice that after 999 billion, your ethics actually come right back up. He's no different than you or I.

[00:02:54]>> [laughter] >> So, why is this a big deal other than just big number? Rockefeller was rich.

[00:02:59]J.P. Morgan was These are all rich people in the past. He's just the next line in the line of rich guys. Well, you bet all the finance YouTubers saying the same thing. The SpaceX IPO is wild. The SpaceX IPO situation is crazy. The SpaceX IPO is troubling. Everybody's saying the same thing, and I can kind of bottom line it for you. It comes down to one word. This is a real company that sells the real product of Starlink. But the crazy part of it is the valuation.

[00:03:27]And when you really dig into it, you find how insane this story becomes. I kind of want to like zoom out a bit and explain to you what the core concept of valuing a company is. Like why we do this to begin with, why investing in a company, how it normally works in a real economy instead of the crazy clown show we're in right now. So, I want you to think of an example of something like a vending machine. A vending machine is a great way to think about a business that you're investing in. A vending machine has some fixed cost you pay up front and then it makes you a certain amount of money over time. And the goal is eventually the amount of money it makes you exceeds the the price you paid and you're making profit from there. Do you understand? The average vending machine, I looked this up, is estimated to make around $400 a month. So it's a sincere question to you the chat. If this vending machine was going to make you an average of 400 bucks a month, how much would you pay for it? What would you pay for this vending machine? What is it is that a trick question? What would you pay? What do you think would be a fair price to pay? It's going to make you $400 a month. People are saying four grand, people are saying 5,500, people are saying 10,000. What you just said says a lot about your risk tolerance, your ability to wait for payoff. It says a lot about you as an investor. If you want a small amount of money, you like to have lower risk. You want a high amount, something like that. So a lot of questions have to be asked because you don't know the future value. You know that right now this thing makes 400 bucks a month so you can kind of do some math and figure out after 10 months it would be four grand, but you don't know like will I need repairs? Will consumer demand for snacks increase or will they decrease or will they all stay the same?

[00:04:55]How long can I personally wait before needing my money back? These are questions that you have to answer as an investor. But there's roughly a range of acceptable answers, right? The actual answer to this question, if you look at the market today, is $4,000. That's what this thing costs because the market collectively has decided that's about a fair amount of time to get your money back based on normal estimates. So it's around 4K. But like if you were somebody who would wait for a deal and wants to do 3K or you're willing to pay more because you think snacks are going to go to the moon.

[00:05:23]And you're like, I'll pay it cuz I need to get in the business now. I'll make the money back. I don't care about my profits right now. Depending on the kind of investor you are, it's different numbers. But if I were to tell you, "Hey, I've got a vending machine to sell you. I'll charge you a hundred million dollars."

[00:05:38]>> [laughter] >> You would know that makes no sense. You would know that whether or not you're like a little more risky or a little less risky or whether or not you think snacks are going to do well or not, you would just understand that this valuation will not make you your money back. That there's no reasonable path to success. But if you were to paint an X on it and have Elon Musk pitch it, >> [laughter] >> it turns out that actually works in today's economy. That is the only person alive right now that can sell this level of payback at this cost and people will go, "Yeah, I think it's worth it."

[00:06:14]Understand that this is the largest IPO ever done and its valuation at the launch is greater than almost all actually all these other major American IPOs combined. All previous largest IPOs in the 10 list combined are smaller than SpaceX. The amount he's chosen to launch his company at before it has any provable revenue or profits is astronomically bigger than what it should be deserved. And it's telling that he opened his speech that we showed earlier. He opened his speech by saying, "While most companies opening remarks during their IPOs are about profit, today was something different. It was about hope." That's an easy thing to do when you have no profit.

[00:06:53]>> [laughter] >> You can't talk about PROFIT IF YOU HAVE NONE. And yet people give him so much credit for this. They're inspired and impressed by it and they throw their money at it, but it's just an insane thing. I want you to try and look at this list of the world's largest companies by market cap. These are the most valuable companies in the world.

[00:07:12]The most valuable vending machines, okay? You'll notice if you take this list of the most valuable companies and you click this button right here, earnings, to see which companies make the most money, you'll notice it's almost the same list. The difference between these list, you'll notice only two COMPANIES HAVE CHANGED.

[00:07:31]>> [laughter] >> ALL THE SAME NAMES ARE there except for two. You can't find Tesla and SpaceX.

[00:07:40]They're the two that don't belong.

[00:07:42][laughter] Now look, the order of the list is slightly different. Companies ordered by their profit, Saudi Aramco is number two. But on companies ordered by like how much the market values them, Saudi Aramco is number nine. And that slight gap is because Saudi Aramco makes a lot of money now, but some of these companies might make more in the future.

[00:08:00]They still make a lot of money right now. So, there's some elements of like hopes and dreams, and there's some element of real profit right now. But Elon has skipped the part of any real company right now and has managed to get into this upper echelon of the list with just hopes and dreams. It's just vibes.

[00:08:18]That is the It's the first time that's been done. It's the only one in the list. Even the new entrants to the list like AMD and SK Hynix are making real oodles of cash right now. I mean, look, I can say this a million different ways, but I really want to get it through your head that one of these companies doesn't belong.

[00:08:35]>> [laughter] >> Look, how can SpaceX be worth more than Amazon by any, even though craziest stretch of imagination? It's so out there. You can look at this one. Which company doesn't belong?

[00:08:49]>> [laughter] >> You know, this is all the companies, revenue, and net income. There's one on this list that is not making any money.

[00:08:57]There's a lot of astronomical ways to point out how absurd this valuation is, and I'm going to hit you with a couple more of them cuz I really want it to get through your head why people think it's so crazy. When I first made these slides a few days ago, SpaceX, at their launch market cap of 1.75 trillion, was greater than the valuation of every basically every other aerospace company. Raytheon, Boeing, Airbus, Honeywell, Lock- All these companies make money. All these companies combined. And like, if you pick any one of these companies, even like poorly performing ones, let's pick Boeing. Let's pick one example. If you pick Boeing, Boeing is much larger than SpaceX individually as a company.

[00:09:30]>> [laughter] >> It makes like four times the amount of revenue that SpaceX does, but it's worth more than all of these combined. But this slide is out of date when I made this because we've already had 3 days pass. In fact, now SpaceX is bigger than the entire aerospace and defense sector of the world.

[00:09:47]>> [laughter] >> Like it's gotten so much bigger in 3 days. It's unreasonable. And so I really I searched high and low to try and find the perfect company of an example of where SpaceX actually is. Like what is a company that actually is near SpaceX if it wasn't Elon there. If it was valued based on more like fundamentals, which is a crazy thing to say nowadays, where would it be? And the answer is Carnival Cruise. SpaceX is roughly the revenue size of Carnival Cruise, but it's valued like it's Amazon OR GOOGLE.

[00:10:20]>> [laughter] >> I'M NOT SAYING STARLINK IS A bad business, but I'm saying it's it's relatively small. Look, I'll compare the two. Carnival Cruise last year made $25 billion in revenue. SpaceX did 18.7. But the difference is Carnival Cruise made money ON THAT.

[00:10:39]>> [laughter] >> AND BECAUSE THEY ACTUALLY had the gall to make some money, they're valued like a normal company while SpaceX is valued bigger than all the aerospace companies in the world combined. It's a truly staggering number. And again, if we go back to the vending machine example, in order to justify not even the $100 million one. Let's say you wanted to buy like a more expensive vending machine.

[00:11:01]In order to justify a higher valuation, you'd have to promise that this $400 a month number, it'll get bigger. You'd be like, "Hey, you know what? We have a new line of snacks. The vending machine profit's going to go up. Foot traffic's going to increase." You have to have a reason. You have to have a story, okay?

[00:11:14]That's how you can justify these higher valuations. It's a story. And if you want to justify a valuation this big, you need a story of growth that is really absurd. So Elon Musk got Morgan Stanley to put out numbers, estimate [music] numbers that are truly crazy.

[00:11:28]That show an astronomical level of growth happening very, very quickly. And this is a way to somehow justify your current valuation. Now, is Morgan Stanley biased? No, of course not. This is just Morgan Stanley SpaceX IPO launch mission control cuz they're one of the key bankers that made a hundred million dollars.

[00:11:45]>> [laughter] >> As one of his partners in the IPO, of course they're not biased. Are they are sincere and honest Wall Street firm. But what's so funny is because even if you take these numbers at face value, they would only justify the 1.75 trillion dollar valuation that they started at.

[00:12:01]So this has to all happen to end up where they started. But the stock's already growing cuz of this crazy mania.

[00:12:07]So they have to make up new numbers. And so Elon Musk is responding to these numbers and saying, "Nah, it's going to be way bigger. We're going to have a trillion dollars in revenue BY 2030."

[00:12:18]>> [laughter] >> YOU MAKE 18 billion now. The numbers you paid for are not astronomical enough.

[00:12:25]And when he does that, this is what's so crazy. This is what makes Elon different from every other grifter out there. When Elon says this, which is just an absurd, insane thing to say, his fans come out of the woodwork and go, "Damn." Like this guy goes, "Whoa. Elon predicts that SpaceX could reach 1 trillion in revenue by 2030. That means even the big banks are underestimating SpaceX."

[00:12:47]>> [laughter] >> The true value of space-based AI computer But like what? Based on what?

[00:12:54]Cuz Elon Musk said it? You just went like, "Oh, the banks are wrong because Elon Musk tweeted it?" Do you think maybe he's biased as the guy that owns 80% of SpaceX? Like does that >> [laughter] >> Does that cross your mind at all, Nick Cruise Pantages? And then, you have stock pumpers like Bill Ackman coming out and saying literally like comically funny lines. I can't believe he's saying this with a straight face. He goes, "One of the things that makes SpaceX so valuable is how valuable it is."

[00:13:19]>> [laughter] >> THAT'S A HALL OF FAME opening line. But these guys are Wall Street professionals. I mean, we're It's a joke, dude. So then, when people point out, like, isn't this kind of crazy? SpaceX is worth more than Amazon despite being astronomically smart smaller in the size of the business and in the profit. Doesn't that feel like odd to you? Like, I know the fundamentals don't seem to matter anymore, but that's so extreme and so crazy. People will respond and go, "Unless SpaceX hasn't even started yet.

[00:13:46]SpaceX is going to innovate." And it's like, are we really trusting Pepe Yugi Soul?

[00:13:51]>> [laughter] >> For most companies, you wait until there's some evidence of the innovation being a real business, and then the valuation increases. We're skipping all the steps. It's valued like it's already printing money, and it's not. So, obviously, I'm thinking, like, >> How do you know?

[00:14:08]>> Trust me, call Vennett.

[00:14:10]>> It feels so crazy. Obviously, this is so divorced from anything resembling reality that it makes you feel [ __ ] crazy. But, I want to explain a little bit about how it happened cuz there's a specific bit of financial engineering that Elon Musk did to engineer this level of a pop. So, let's think of SpaceX like a rocket ship here. This is the entire company of SpaceX. Now, if you break it down, 54% of the company is held [music] by banks, insiders, and employees.

[00:14:36]That's who owns most of the shares.

[00:14:37]Then, 42% of the company is owned by Elon Musk himself personally. Now, you might be thinking, does Elon Musk get outvoted by these guys? No, good question. Elon Musk has special 10x voting shares.

[00:14:50]>> [laughter] >> So, even if 90% of the company was owned by someone else, and they said, "Hey, can we just do rockets and no Grok?" HE COULD SAY NO.

[00:14:58]>> [laughter] >> UH WHICH USED TO NOT BE ALLOWED, but rules got changed for Elon Musk. Even if all investors voted one way, he could he could overrule. So, these are all that's owned by insiders and Elon. Now, these guys aren't yet allowed to sell. These guys are are still forced to hold to the beginning of the IPO. They can't sell their stock yet. The amount that we've been talking about lately is this last 4%. This is the IPO. They They floated a very, very small percentage of the company that's been trading on public markets. And everyone is chasing after these small amount of shares and bidding the price up, which makes the value of all of this seem higher on paper. So, it's an exploitation of this very, very small float. Again, 96% of the company is not yet available for sale. It's off the market. So, all of the bidding is going on a very, very small percent. The way he engineered this was Normally, when you do an IPO, you'll have a you'll go to an investment bank. You'll get one of the big investment banks and you'll say, "Hey, look, we want to sell a good chunk of our company to raise money for factories or going to the moon or whatever. We need money. So, we're going to we're going to give you this chunk of the company to the investment bank and you're going to guarantee that you can get the public to buy it. That's your job." They're kind of underwriting it is the idea. Elon Musk didn't get one bank.

[00:16:15]He didn't get two banks. He didn't get five banks. He didn't get phase banks.

[00:16:20]He got 20 different Wall Street banks all to underwrite this and got them all a massive $500 million bonus pool if they could pump and sell this stock. So, basically, every major bank on Wall Street is all pumping and pushing this stock.

[00:16:36]>> [laughter] >> And it's only 4%, a tiny bit of the float. So, if you go through Twitter on finance Twitter the past few days, every major bank is tweeting [ __ ] like this.

[00:16:45]It's just Wall Street people smiling, happy as they [ __ ] dump these shares onto retail. They are all just shilling to the anyone they can to get this [ __ ] out to pop in the first few days. And they all made incredibly fat fees for doing so. Goldman and Morgan Stanley pocketed $100 million each, but there's a bigger bonus pool that went to the rest. So, they're all If you've seen advertisements, it's been bought by them. All of these banks have been buying the ads, the pop-up ads, the all and every Everything that's pushing the the retail buying SpaceX has been through these banks that they got to underwrite. And by the way, it worked.

[00:17:18]So, whenever there's excessive retail demand for an IPO, they do what's called a green shoe and they issue some additional shares to feed into the demand. You'll notice they're all wearing [ __ ] green shoes.

[00:17:30]>> [laughter] >> Because retail demand was [ __ ] crazy.

[00:17:35]Record-breaking traffic on Robinhood, rules got changed. So, Fidelity, where a lot of like regular Joes do their 401(k)s in banking, they usually have a rule where you have to have a hundred thousand dollars in your account to gamble on an IPO, cuz they're so risky.

[00:17:49]They changed the rule to two thousand dollars just for SpaceX.

[00:17:53]>> [laughter] >> So, even like broke retail traders can dump all in on SpaceX cuz the hype was so crazy. Also, they made a rule that you can't even flip it. So, if you buy SpaceX day one and sell it day three for a profit, you're banned from IPOs for life. They want you to be a bag holder for six months minimum.

[00:18:13]>> [laughter] >> They have mandatory diamond hands to make sure that you as the retail buy this [ __ ] overpriced and bag hold for six months. It's crazy. All this stuff used to be criminal, but nobody cares anymore. It's all like subtly slimy and crooked to make sure retail are the ones holding this bag. Now, I know what I sound like to some of you. If you're a true Wall Street better, I'm the guy in the middle. Oh, no, the valuation. And you're like, it's up. I'm going to the moon. And I totally get that. And if you're gambling in the short term, bro, play that casino. But just understand that on some fundamental level, the math of this company does not make sense on a level that's even extreme for Elon. Even for Tesla, this would be extreme. It's so out there that you are betting all your chips on one roulette thing.

[00:19:02]On one square in roulette. Maybe it works, but understand the risk is mostly [music] with you. It's not It's not with them. They They smiling because they It's your expense.

[00:19:12]>> [laughter] >> They are cashing out. Even you know, people are obviously many think pieces are coming out like hey, this feels like rampant enthusiasm is buoying tech shares to levels that defy gravity. Like it's starting to get even New York Times which usually doesn't talk about [ __ ] like this is like bro, this is this is getting mathematically so crazy. And I do recommend you read this article how to kick SpaceX out of your 401k. If you have a 401k and want to be 100% certain you're not taking unreasonable gambles, >> [music] >> this is a great way to look at it. I'll link it in the description below. But here's what you have to understand is that all of this enthusiasm and mania and hype and popping the stock works really well when only a tiny sliver of shares are available. There's a lot of frenzy demand and a small amount of supply. But eventually all these employees and Elon want to get rich too.

[00:19:58]They want to make real cash. And they want to dump some of these shares and that happens when their lockup period ends. That is staggered over the next 6 months. You can look at it here. So every few weeks a lot more shares get unlocked and a lot more SpaceX employees want to buy Ferraris and houses and watches and expensive [ __ ] And they're going to start dumping their shares in the market and there's going to be more and more supply and less and less enthusiasm from idiots like retail.

[00:20:24]>> [laughter] >> And all of the sudden you might see this great [ __ ] pop slowly dematerialize.

[00:20:30]I'm not a guarantee, nobody knows the future. But understand this math is not in your favor as more and more shares unlock. The average IPO has a 54% drawdown in the first year. That's the average. And this one's more crazily valued than many than others. So I urge you to listen to the advice briefly of Warren Buffett on why he doesn't buy IPOs like this.

[00:20:52]>> And so I'm reporting earnings definitely than I would report earnings. I mean we don't we have more than IPOs and and if you think about it, you've got a whole bunch of people on the other side who have an interest in marking up each stage of it. Even if it's funny, sometimes they offer one price for the employees that already have the shares and then but then they have an artificial price that so they can say that this round went at a higher price.

[00:21:16]They're picking the time to sell to you.

[00:21:17]I don't like when I'm picking the time to buy in a 2008 rather than having them pick the time when they've decided this is the time we can cash in by selling to you. We're going to do you a big favor and let you >> So, think about that. The 20 biggest Wall Street banks in the world and Elon Musk have decided this is the time to sell to you.

[00:21:36]>> [laughter] >> At the most extreme nosebleed valuation ever seen. And you're thinking, oh, I got a good deal. I'm getting one over on them.

[00:21:43]>> [laughter] >> They are smiling. They're celebrating.

[00:21:46]They're popping champagne as they dump these shares onto you. And you're the one thinking, oh, yeah, this is I'm I'm the brilliant savvy investor [laughter] here.

[00:21:56]However, maybe you're right cuz why would I trust Elon I'm sorry, why would I trust Warren Buffett when he's poor?

[00:22:03]Warren Buffett is only a $144 billion in net worth, bro. He's like so much He's a rounding error on Elon Musk. Why would I care about this broke ass? I mean, listen, has Warren Buffett been an investor for 70-plus years compounding his wealth? Yes. And yet, Elon Musk made more money than him, his entire net worth, in one 6 hours.

[00:22:28]In one day. One trading day, 6 hours.

[00:22:31]Elon Musk added to his net worth Warren Buffett's entire 70-year compounding interest net worth. That is the [ __ ] world we're living in. The 10th richest man got passed in one day. [laughter] And if you want to get to that level of wealth, if you want to pass Warren Buffett, obviously the best way to do it is by saving money on subscriptions, thanks to Rocket Money. If you look at your recurring bills, things like streaming services and gym memberships and things you're not using anymore and you forgot you're paying, All you have to do is go to rocketmoney.com/biga, download it, link your accounts, it'll show you everything you're paying for, and you can one click unsubscribe from the app. It's a great way to find recurring costs you forgot about, save some real money in your pocket, and add up to a quick trillion in a few years time. This is how Elon did it. This is how you can do it. It also has incredible budgeting tools, which I think Elon Musk is a big budgeter.

[00:23:26]>> [laughter] >> So, you can plan for upcoming things and trips and events by making sure you see where all your money is going. It's an incredibly useful app. I've used it for a very long time, and they've been a long-time supporter of the content. So, thank you to Rocket Money.

[00:23:37]rocketmoney.com/biga, check it out. So, is there an upside to this? Is there an upside to all this financial mania? I couldn't find a ton, but I did find an insightful post by Nassim Taleb, who I I like the writings of, who said, "The upside of this, the great thing about Elon becoming a trillionaire, is that he makes [music] a few farts whose identity is entirely linked to being rich feel truly inferior."

[00:23:59]>> [laughter] >> And it's true. There's people who dedicated their entire life to nothing but money, and they're now a rounding error on a guy who cheats at video games. Who cheated at Path of Exile and Diablo for a public that instantly called him out on it. That's got to feel like a bad aura loss. I mean, there's CEOs, I looked at the highest paid CEOs in the world, people like David Solomon of Goldman Sachs, who makes 118 million dollars in pay. He has a 741 times ratio of the average Goldman Sachs employee.

[00:24:33]David Zaslav, 1,378 times, 161 million. You go up this list, you have Dylan Field of Figma making almost a billion dollars in pay. And then you go to number one on this list, >> [laughter] >> and they all look like chumps. They all look chumps, dude. The level of pay is so astronomical, it has put all other wealth accumulation to shame. Even Jeff Bezos, who has, you know, as recently as mid-last year was trading spots for the world's richest man, Jeff Bezos is closer to a homeless man than he is to Elon Musk. [laughter] Like, there's such a gap. You and I are much closer to Jeff Bezos than he is to Elon. It is such an absurd and he's like the third richest man in the world. It all makes you think. It It's like I'm not a person who believes everybody should have exactly the same amount of money. I do believe if you make a if you make a successful business, if you make a product someone wants, I don't care that you have more money than me. If Elon just sold cars at a profit and made more money than me, I would not care. I don't have a problem with it. I don't care if Jeff Bezos has more money than me. But, there is a there's a limit, right? There starts to be problems at certain levels of wealth concentration.

[00:25:41]A long time ago, 4 years ago, we made a video called can you spend Elon Musk's entire fortune? It was a bit of a goofy video that we made back in 2021 or 2.

[00:25:51]And in that video, I remember we bought 31 NFL teams, an NBA team, an F1 team, an M1 Abrams tank, a Hollywood movie, 20 original Mona Lisas.

[00:26:02]We bought all of this and we were still one of the top richest people in the entire world. Like, it wasn't it didn't you couldn't even hurt the net worth if you tried. Back then, Elon Musk had a wealth of about a hundred billion dollars. He is now 10 times that in 4 years. You can't spend it. You could click all day on this website, you cannot spend it. Now, I did cheat a bit and use the macros and I was able to buy 400 million AirPod Pros.

[00:26:29]>> [laughter] >> I'm sorry, 4 billion. I'm sorry, 4 billion. So, you can buy AirPod Pros for basically one out of every two people in the world and that would be spending Elon Musk's fortune and it'd be bigger than Nike, if you can believe it. But, I have to ask you like having more money than than the average person is not really the problem. It's when you have as one individual more money than the net worth of nations, wealthy nations. Elon Musk's net worth is greater than the combined net worth of everybody in Finland or everybody in Qatar. These are These are like top 20 wealthy nations. We are in it We are in through the looking glass.

[00:27:05]It's truly crazy. And if you think about how in just a recent election, the 2024 election, this one man donated $300 personally to drastically influence it, it's gets crazy when you think about how now he could do that 3,472 two times. [laughter] We'll have to wait till THE YEAR [ __ ] 20,000 to get through all of his money to spend on elections. It's just too much political power and control and influence in one person and it allows him to ignore all the rules. One unique thing you see about Elon Musk is that all the rules that bind you or I if we started companies, that would be called financial fraud or unacceptable, don't bind him. He is able to skip the rules because of his wealth and power because people that are rich and famous don't want to piss him off. They don't want to lose access to his spigot of money. And it's allowing him to have a different system for him that even average wealthy people, let alone regular people. It's breaking the whole system. So, what now?

[00:28:06]We're already seeing what he's going to do with this absurd valuation, which is what smart companies that have absurdly valued stock in the past have done. He's basically printing shares to buy companies. He's doing all stock deals.

[00:28:20]In the past few days, three days after going IPO, SpaceX bought Cursor for $60 billion using only stock. So, it cost them nothing. The stock swings in value $200 in a day. $60 is a rounding error and he's not spending real money. He's not taking on debt. He's just issuing shares to retail traders and then buying companies. You also, he raised from all this $85 billion. Remember when he buying in? And he used that money primarily to pay off debt on previous bad mistakes he's made. So like Twitter and XAI are both losing money and have big loans they can't pay, but he sold them to SpaceX. SpaceX IPO'd and then he paid down the debt on his previous companies. But he's a man that doesn't change because even though he has all of this new money, he's flushed with fresh real cash, the first thing SpaceX did today is issue more debt.

[00:29:12]>> [laughter] >> THEY JUST PAID OFF THEIR last debt. They don't need more money and they're taking on another 20 billion dollar loan. So I promise you, I promise you, I don't know this timeline, but the end game of this is risky for retail. And I think the way it's going, as I've said before, but it's seeming more and more likely, is that as the fake [music] realities of these two companies really start to pile up, as the divorce from their numbers and their reality start to become more apparent, he's going to the last quiver in his arrow. It's not his last arrow in his quiver. The last trick he can pull, and that is he is going to merge Tesla and SpaceX. Almost certainly, you will see this as the final game. Tesla and SpaceX merging to give one last final mega pump to both of these combined stocks and hide for a little bit longer the lack of like real economic generation that these two companies have. However, whether this works or not is up in the air, but if it does, we may see Elon Musk become the world's first quadrillionaire, which he said is not impossible, but requires factories on the moon and Mars to achieve. But don't worry, if you think him being a quadrillionaire is a problem for society, dollars won't matter by then.

[00:30:24]>> [laughter] >> So let's keep shoveling them his way cuz by the time it works out, it won't matter. Thanks for watching the update.

[00:30:30]Hope that helped you understand what's going on with SpaceX.

[00:30:34]>> [laughter] [music] [music] >> Hey.