This Is The Craziest IPO Ever

Added: 2026-05-22

[00:00:00]Today on the Jezel Carlson show, there is a space company that flies rockets to outer space that has satellites floating around planet Earth offering satellite internet that has now decided to go public and we get to see the initial IPO filing. This reveals everything that's in this company's documents. Of course, the company's SpaceX and it's ran by Elon Musk. Now, I had a chance to look over this and I expected for it to be interesting, but what I saw was far more than interesting. This was the most crazy, unbelievable, shocking IPO filing that I've ever come across. And that's saying something because it's shocking even in terms of Elon Musk. I mean, this is truly shocking. So, we're going to be going through all of this. We're going to be looking at this entire IPO. I'll be going over what I believe is is the most important aspects of it and really what this company's doing. Now, this company is aiming to go public in June on the NASDAQ under the ticker SPCX.

[00:00:57]So SpaceX could be going public relatively soon, right in June. And we have the initial public valuation, the target as 1.5 trillion or more. Now, we note here to get to this 1.5 trillion valuation, you have to look at a couple different things because on the surface, the finances don't look great. The financial picture is notably worse than any other mega cap US company. It lost $4.9 billion last year on revenue of 18.7 billion. Again, we have a company here that's target valuation is $ 1.5 trillion and last year it lost $5 billion and has revenue of 18.7. Now, we can come up with some comparisons here in terms of revenue and earnings. We can take, for example, Netflix. I think Netflix is a company that's relatively undervalued, but it's not dramatically undervalued or dramatically overvalued.

[00:01:48]It's a company that's trading somewhere within its fair value range. In the past 12 months, Netflix has done $47 billion in revenue. On this $47 billion of revenue, Netflix also produced upwards of 12 billion of net income when you take away the Warner Brothers Discovery Breakup fee. So, just to put these in comparison, Netflix is generating well over twice the revenue that SpaceX is.

[00:02:12]It's also generating instead of $4.9 billion in losses, Netflix makes $12 billion in net income. And while SpaceX is going to trade at a $ 1.5 trillion valuation, Netflix trades at a $376 billion valuation. So at least 134th the actual size. So when we look at this all together, we can see that investors are willing and prepared to pay an extraordinary premium for SpaceX shares over other companies that have even stronger financials. And there's a couple reasons why. See, what you're paying for with SpaceX is optionality.

[00:02:47]It's a company so diverse with options that you can have any type of investment thesis that you want. It almost fits into anything. For example, it's not just Starlink, but they're expanding from Starlink internet to direct cell phone connection. So now SpaceX can be like a cell phone company, a T-Mobile and AT&T. It's going to compete with all those companies. It's also an AI data center company. Remember Elon Musk with all his big data centers for XAI? Well, he doesn't need those anymore, at least not as much. So, he's renting them out to Anthropic. We also have a Starship development company. They're creating rockets. They're monetizing that as well. We have people paying for rocket flights. We have costs going down for it. We have all different use cases for that, including a lot of government use cases. We also have XAI, which includes Twitter or X as part of the SpaceX IPO.

[00:03:35]So, that's being folded into the business as well. That also includes Grock and all the other AI stuff. So overall when we look at this business it's basically a big conglomerate of future technology and investors are pricing it as such. So when you compare it to any other company whether it's a software company or even many of the big tech companies SpaceX has just more thesises existing within it. There's more things that you can develop as a story or a narrative within this stock and that is the reason investors are analyzing this and pricing it at this incredibly high valuation. Now, to really put the valuation in perspective, if SpaceX does successfully IPO at $1.5 trillion, that would imply an 80 times price to sales over the trailing 12 months. But again, SpaceX has a lot of optionality, and they're doing a lot of things to try to justify and sell investors on this valuation. One of them is their massive deal with Anthropic.

[00:04:28]The company recently signed a deal with Anthropic, whose claude AI tool competes directly with SpaceX Grock. SpaceX will rent out compute capacity across its two large data centers for 1.25 billion a month in a deal that stretches through May of 2029.

[00:04:44]This is a mind-boggling amount. They're renting out extra compute capacity for 1.25 billion a month. Not a year, a month. Every month, Anthropic's paying them 1.25 billion. Now, you may ask, how does how can Anthropic afford paying like $15 billion a year to SpaceX? How could they even afford doing that? We don't know. They're getting the capital somewhere. But either way, SpaceX is making a fortune from Anthropic in the meantime. And the Wall Street Journal says that this deal stretches through May of 2029, which is technically true.

[00:05:16]But they leave out an important caveat here. In that deal, they have an important exception. Either party can cancel the deal with 90 days notice. So even though it technically runs through 2029 and multiple years, investors should not be looking at this anthropic deal as consistent 1.25 billion for the next three or four years. That's just not the case. It's not guaranteed.

[00:05:37]Anthropic tomorrow could say, "Hey, we're giving you our 90 days notice.

[00:05:41]We're only going to be using your services for another 3 months and then it's canceled." Now, moving past the anthropic deal, we get to another part of this that I don't believe this part is shocking. It is crazy to some extent, but it is expected. and that is that Elon Musk basically made himself unfireable. There is no way to get rid of him. For every share he owns, he has 10 shares worth of voting power, making it so that he is the ultimate decision maker. He will 100% be unfireable in this company. Musk holds 849 million class A shares and 5.6 billion class B shares. together with other board members and executives, insiders own about 20% of the class A shares and 94% of class B shares, giving them 80% of the combined voting power. So even though this company will technically IPO and it will be publicly traded, it's not going to be publicly ran. Investors in the public will have virtually no say on what goes on. Not any say at all.

[00:06:37]Everybody on the inside of the company has the huge majority of say, primarily Elon Musk. And again, that's no surprise. You'd expect SpaceX to go one-on-one with Elon Musk and that's part of the value proposition here.

[00:06:48]People want to invest in whatever Elon Musk is doing. You look at the Tesla valuation as an example of that and this gives investors a more direct access into everything Elon Musk. So having him inseparable from the company, I actually believe increases the valuation of it.

[00:07:04]If it was easy to get rid of Elon Musk, that would probably make investors in this company actually more skeptical and more concerned. In January, SpaceX gave Elon Musk a package worth 1 billion class B shares, which vest if the company establishes quote, a permanent human colony on Mars with at least 1 million inhabitants. And it's a series of market cap goals that expand the company to 7.5 trillion. So to clarify, Musk gets paid in a large amount if they fly rockets to Mars. They land there with people in them. Those people start to develop a colony on Mars and then over a million people end up living on Mars. Another big part of how Elon Musk gets paid is if they have non-earbased data centers, which means data centers orbiting in space, which is very realistic. In fact, Sundar Pachai has mentioned doing that. Other people have mentioned that as a a realistic possibility. When I look at this, I see that Elon Musk has found multiple levers to make sure he makes a lot of money in the process. And even in addition to all these additional pay packages, he just owns an enormous amount of the company.

[00:08:06]So if the stock price just appreciates, his net worth is going to appreciate dramatically alongside it. Another thing I'll point out, just another interesting thing is in the actual SECS S1 filing, the collaboration between the AI companies that are within this SpaceX company are called Macrohard. So, he actually has a Microsoft troll name in in the actual SEC filings, which I don't think I've ever seen. I've never seen a company like this big, this big of a market cap actually in SEC filings having the name of their subsidiaries troll another company. So, instead of Microsoft, it's Macro hard. And that's what he's calling it in the filing.

[00:08:45]Another little fun fact that was revealed in this filing is that SpaceX spent $131 million buying 1300 Cyber Trucks at full MSRP value, $100,000 a piece. Now, to me, this looks like clear-cut self-deing. Self-deing is when you favor one other party or company that you own at the expense of the shareholders in another company that you own. Basically, it's that Elon Musk favored Tesla by artificially supplying demand for the Cybertruck at the expense of the Space X shareholders by overpaying for those Cybert trucks. Now, that's what it looks like to me, but SpaceX is going to have to defend this as a fair purchase. To pass that test, they'll have to show that they bought these trucks out of the best interest of SpaceX and they would have done so even if Elon Musk didn't own Tesla. Now again, I find it hard to believe that SpaceX would have purchased 1,300 Cybert trucks at full MSRP if Elon Musk wasn't the owner of Tesla if he didn't benefit from those purchases. I I think that there's always a chance maybe they would have, but I find that very unlikely.

[00:09:47]Now, don't worry, there's more weird things in the SpaceX IPO. For example, the total addressable market that they outline. Now, the TAM, for those of you that don't know, is the maximum amount of revenue available in this market. So if the TAM is a hundred billion, that means that that's all the revenue available for you to gain if you're to grow into that total addressable market.

[00:10:07]In this case, the TAM that they outline, this total addressable market is 28.5 trillion. We have consumer subscriptions. That's $760 billion. They can earn up to 760 billion. That's the market that they can grow into just with consumer subscriptions. Then we have digital advertising. and that's 600 billion. Then we have enterprise applications and that one's a whopping 22.7. So that's the big one. When you add them all up, you get to $28.5 trillion in total addressable market. To say that this TAM is not realistic is like a understatement of the century.

[00:10:46]This is such a theoretically ridiculous TAM. I I've really never seen anything like it. Just to put it in perspective, the total amount of processed volumes of payments that go through the Visa network. Think about as big as Visa is, how many transactions go through Visa.

[00:11:00]This isn't Visa's revenue. This is the amount of money that's processed on Visa's network. It's $14.2 trillion. So, the total amount of money that Visa processes through its network is half the total addressable market of this one company that's doing currently less than half the revenue of Netflix. So, you may be asking, how does SpaceX come up with these numbers? How did they get a TAM of 28 trillion? Well, you see, it's just the way that you look at the world. It's just the way that you view things. I can, for example, say, what is the TAM of all food sales in the world? Just all foods sold to everywhere. The total addressable market, TAM, of the global food industry ranges from 9.6 trillion to 14.7 trillion. Well, I'm investing in Texas Roadhouse. Now, Texas Roadhouse could technically one day grow to be the entire food industry of the entire world. So, Texas Roadhouse's TAM is now 14.7 trillion. Sounds good enough to me.

[00:11:57]We got a lot of room left to grow for Texas Roadhouse. Now, you might of course say, "Joseph, that's ridiculous.

[00:12:03]Texas Roadhouse's TAM is not $12 trillion because that's the global revenue of all food sales." But when it comes to having these disclosures, that's really all that matters. You don't have to be right. And these don't even need to be realistic. And the SEC is enforcing disclosures, not really the merit of the statement. See, the SEC here is allowing you to make a bad investment. They're saying that as long as everything is transparent, as long as you're seeing the arguments they're making, we're going to allow it. But they're not protecting you from making a bad investment. They're not even protecting SpaceX from filing statements like their total addressable market that seem delusional on the surface. So, just keep that in mind. This total addressable market is highly optimistic.

[00:12:47]Now, even after all of this, even after the self-deing of buying Cyber Trucks, even after the 28 trillion dollar total addressable market, that's a complete fantasy, even after the fact that they're losing money last year and they make half the revenue of Netflix, but are being priced at five times the market cap. Even after Elon Musk controls 85% of the company and has part of his pay package tied to colonizing Mars, even after all of that, this company's IPO is likely to be successful. In fact, the stock price will likely go up after IPO for a few mechanical reasons. One of them is the amount of the actual company that they're selling is incredibly small.

[00:13:24]They're IPOing likely four to 5% of shares outstanding, which means it's a very small amount of float. float is the amount of shares that you can actually trade with. And the fewer the shares, the more valuable the shares. And because there's so much interest from every different direction for any company that has future growth potential, especially one that's involved in space and AI and AI infrastructure with compute power and so on and so forth. All those buzz terms today, there's enormous interest from outside investors. You have Saudi funds wanting to invest in it. you have the QQQ that will be forced to buy shares in it. Other ETFs like SCHG or growth ETFs are going to buy shares of this as well automatically. Many investors that want a growth tilt or a speculative part of their portfolio, they're going to be buying this IPO as well, all with a very small amount of float. Now, when you artificially constrain the supply of the shares, it means that any buying pressure can push the entire valuation of the stock up more. This small float I believe will be instrumental in making this IPO successful. And on top of that, Elon Musk has made it so that there's very few ways for insiders to cash out in the short term. Most of it's locked up for 180 days. And the people that own a lot of shares are locked up for over a year. So there's also a restriction on selling pressure initially for at least the first year in this stock, which again constrains the overall float. When there's not that many shares, they're more likely to go up. So, I believe that this stock may actually do well. Not necessarily for the financials. In fact, I don't even think that's going to play a role at all, but for the story.

[00:15:03]There's lots of stories attached to this company. There's lots of narratives and because of the scarcity. It's a big story with only a few shares. So, even if it's trading at 80 times price to sales, you better get them while you can cuz they won't last for long. Now, let's go ahead and move on to some news. Now, the first piece of big news is that Nvidia just reported earnings yesterday.

[00:15:21]They had a record quarter with total revenue at $82 billion, up 85% year-over-year and a 20% quarterover growth. Now, another thing worth pointing out with Nvidia is in this most recent quarter, they posted free cash flow. We can look at it here. Almost $50 billion in free cash flow in a single quarter. I've never seen this before by any company ever. This is out of this world good. Nvidia's posting numbers that make every other company look weak by contrast. So investors are looking past Nvidia right now. They're going to all these secondary companies. We can see those ones racing up as well. And it seems like Nvidia is getting left behind. I believe another factor here is just the simple fact that the hyperscalers, specifically Google is now competing directly with Nvidia with their TPUs. We have Amazon offering their Graviton. They're not as good as Nvidia, but all these little factors play a role. Now, another company that just reported earnings yesterday is INT, and it's down currently around 19% on the day. A huge drop for INT. Investors are not excited about this earnings report or the progress of the company, and neither am I. I didn't like the report. I decided to sell the company, and I'll be going over which ones I'm buying. But before, I want to address some of the reasons I did not like this report. The first thing we can look at comes directly from their earnings call.

[00:16:38]As I listened to this, one part of it stuck out to me and that is directly from the CEO of the company. He says, "Shifting to our DIY market, this is like the Turboax do-it-yourself." He says, "I am constructively dissatisfied with our performance. We face pressure among the most price sensitive DIY filers earning less than 50,000 a year.

[00:17:01]We lost on price. To reacelerate this part of our business, we will evolve our business model by delivering the right lineup and the price points to meet simple filers needs at the low end and lean into the power of our broader consumer platform to monetize beyond tax. Now, that doesn't sound good at all because it confirms a lot of fears that investors had that AI is making it easier for people to file taxes at a much cheaper price point than into its Turboax. into it. Turboax charges like $150 to $200 to file taxes and now people can use these nice snifty tools to do it for a cheaper price. But the CEO of the company says it has nothing to do with AI. You got it all wrong.

[00:17:41]That's not the problem here. He says, quote, and I just tell you that none of this has anything to do with AI. This is all about being priced right for customers that are less than 50,000 in income. they're actually willing to have experiences that are far worse for them as long as the price is right. So he says directly that this has nothing to do with AI, which is a claim he can't possibly make. How can he know that this has nothing to do with AI? Intuit's now facing a lot of competition from upand cominging startups that are offering tax solutions software that is AI powered.

[00:18:14]That's obviously causing some of this.

[00:18:16]So I just don't believe him. I think that this has a lot to do with AI. I think that AI is making it so that the perceived value of in it IT's Turboax is becoming lessened. Their pricing power is becoming pressured and that is a story I believe will evolve over time.

[00:18:31]Now, one of the things especially difficult about in it is when you hold this stock, it is highly seasonal.

[00:18:37]Basically, you have three quarters of the year where you just get no information. Like you you just don't know. So, for the past three quarters, you're holding the company thinking that they're going to have a great tax season and then they don't. the stock goes down 20%. Now, normally with a less seasonal stock, you can look at this situation and say, well, maybe they'll do better next quarter, but with into it, you can't. To be able to fix these problems with Turboax, to be able to actually see if their solutions are working or whether or not they're getting worse, we have to wait a full year. And outside of that, we really have no data to work on.

[00:19:10]It's only our best guess. So, you have three full quarters of waiting around hoping that they're going to fix this issue next season. That's going to be a long wait to answer these important questions. Another part of this is that they announced that they are cutting their workforce by 17%. Now, they've tried to talk about this, how it's a great improvement and how they're just operating more efficiently and streamlining processes and all the rest.

[00:19:33]But this also comes after they just recently cut their workforce within the last 2 years by another 10%. In it is chopping away at their workforce like crazy. And I believe that this is very clear-cut financial engineering. So, it looks like management is taking drastic action to protect the earnings per share projections. Cutting all these base costs, getting rid of all these expenses while buying back shares helps out the earnings per share, but it's only a temporary fix in the long term. We need better solutions and I'm just not seeing that with this report. So, overall, when I look at the situation, I just don't like what I see here. I don't want to wait till next year to see if the problems are solved. And I also believe that there's just that ongoing headwind they're going to face for a long period of time of AI. So I sold my entire position, took on around a $9,000 loss.

[00:20:18]I have $42,000 in proceeds from the sale, and I'm deploying that into three other companies. The way that I'm deploying that $42,000 is 50% of it into Amazon, about 30% into Meta, and 20% into S&P Global. So that's where I'm putting my money from the proceeds of this sale. And as sad as it is that into it didn't work out as an investment, not every investment works out. That is baked into investing. It's part of the expected process. When you invest in an index, not every company that you have your money in in that index is successful. When you buy individual companies, you come with the expectation that not every single one of them will be successful. That is why we diversify.

[00:20:58]If we had a crystal ball and we knew the future perfectly, we wouldn't need to diversify at all and we could just buy one company. But that's not the case.

[00:21:05]and that's why I buy more than one company. In this case, into it didn't work out. It's sad to see it go, but it is a 3% position overall. So, it's not a dramatic impact on the portfolio. And overall, the portfolio has moved up substantially over the past couple of months, well over $100,000 in gains. So, I'm excited about the future and excited about the companies that I hold. Now, moving on, we get to the fail of the week, which in this case is Trevor Noah, who used to be one of the people that ran one of those late night comedy shows, and now he's moved into the role of political commentator, which they basically have been anyways. A lot of the comedy shows now are just about politics increasingly, but in this case, he's shifted into the role of the finances. He's gone into the world of investing in the stock market, and he has some opinions, some hot takes to share on that. Let's go ahead and listen to this. This is like a little clip from a podcast. Let's go ahead and play it.

[00:21:53]If I ruled the world, >> I would abolish quarterly earnings >> that companies report on >> and I would probably extend it even further than like companies wouldn't be able to report on their earnings for like maybe like a few years actually.

[00:22:08]>> Mhm.

[00:22:08]>> Like no no reporting at all from >> He just said that if he ruled the world he would abolish quarterly earnings and make it so that companies couldn't report their earnings for a few years.

[00:22:21]>> Any company They wouldn't be they'd just be like we just run run run run run run run run run run run run run run run run run run run run run run run run run run run run run run run run run run run run run run run run run run run >> like the SP500 we wouldn't know what's going on with those no you wouldn't know their earnings like so you know like right now it's quarterly quarterly earnings report >> like yeah made 300 >> normal quarterly earnings and I would even extend it to maybe like two to three years maybe like every 3 years they could report their earnings >> right >> okay >> and I'll tell you why tell you why >> in my mind I think we can draw a direct line >> Mhm.

[00:22:54]>> between quarterly earnings >> Mhm.

[00:22:57]>> and the destruction of most things society has held near and dear.

[00:23:01]>> Oh yeah, I'm with you on that.

[00:23:02]>> I think theation of everything as I call it.

[00:23:06]>> Yeah. I greatly attribute to quarterly earnings because >> the quarterly earnings has made it so that every CEO of every major company >> has to make sure that the reporting that they do >> four times a year shows that the company's making more money and is more profitable.

[00:23:26]>> Four times a year you have to do this.

[00:23:29]And because you have to do this and because it affects the share price and your job as a CEO, >> your incentive is now to make sure that every quarter your company makes more money than it made in the previous quarter or the money is going up >> versus looking at the long-term prospects of the company, the employees, >> and the thing that you're actually trying to do in the world.

[00:23:51]>> Uh he makes a lot of claims. He says that quarterly earnings should be abolished and we should do them maybe every 3 years. So on the premise, just in Trevor Noah's world, you should buy into a company where you're putting your money behind it. You're the owner of the company. You're quite literally part owner of this business. And it should be illegal for the business to actually tell you how it's doing. They should not be able to to post earnings. Apparently, the insiders, like the CEO and the executives, they should know what's going on. They should be able to buy and sell shares and do what they want. But you, as an investor, you shouldn't be able to know have a clue. It'd be like buying a pizza a pizza shop or a, you know, opening up a sandwich shop and you literally have no clue what your business is doing for years. You don't even know if it's profitable. It could be going bankrupt and you just have no clue. And the reason why, as he states, is not one that he came up with. This isn't an original thought. It's something that he read on like Reddit or popular social media. It's become more popular over time. The thought process is that if a company is transparent and reports its earnings every single quarter, it cannot function in a way that's long-term, which is entirely empirically false. There is no basis for this and the arguments don't hold up for it. For example, Costco is one of the most longterm running companies. They look way out in the future. They make plans that are multi-year out in the future. They're always looking at making the customer happy today for the lifetime value of the customer years and years in advance. Costco reports their revenue every single month. Not only every quarter, but they report three times every quarter. So, they're reporting their numbers 12 times a year.

[00:25:30]By Trevor Noah's estimate, they should be the most short-term focused company in the world. But Costco is ironically one of the most long-term focused companies in the world because you see there's no correlation between the two.

[00:25:41]You have other companies like ones in the UK that have moved to a semiannual reporting basis and there is no verifiable or empirical evidence that reporting on a less frequent basis improves any aspect of the company.

[00:25:54]There's no empirical evidence that it makes the customer service better that it makes the company more long-term ran that they uh report more capex spend nothing. It goes on to this idea even more. I am yet to find a company that became a better version of itself once it went public. Trevor shares this common sentiment that public companies are bad and they only make life worse.

[00:26:16]They're only driven by greed and they just grow earnings every single quarter and it makes life worse for everyone.

[00:26:22]And this is just objectively not true.

[00:26:25]And the idea that publicly traded companies are worse than private ones or they're uh they're ran in a more greedy way than private ones is also not true at all. There's many private companies that are ran in an extremely greedy way.

[00:26:36]Many of them commit fraud. Like there's lots of bad private companies. I could name literally thousands of them. Uh watch an American greed episode. I mean there's literally example after example of private companies not doing good things. And you can take this argument of him saying that ah public companies are always getting worse. They're just getting worse every single quarter, every year. It's just not true. Take a company like Amazon. Before Amazon existed as a public company, you could not buy what you wanted online. You'd have to put in payment information in a website that you didn't quite trust.

[00:27:07]like you had to do research on it. When you'd order something, it would be shipped through USPS and take 5 to 10 business days to arrive at your home, if you got it at all. That was the experience shopping online. There was limited selection. The shipping times were 2 weeks out and you weren't even sure about the retailers you were buying from. Then comes Amazon where today I can literally dream of any of tens of millions of items. Tens of millions.

[00:27:33]anything that I can dream of. I can go to one website that I can trust that has excellent customer service. I can buy that item in like 20 seconds and then have it show up on my doorstep today or tomorrow. That is the most incredible service ever created. Like it's it's genuinely one of the most incredible developments in the country in the United States over the past 20 years.

[00:27:53]And it comes from the result of a publicly traded company that reported earnings every single quarter. Amazon keeps prices lower for people not more expensive. It makes the country's infrastructure and shipping better. They built out things that no private company ever would. So overall, he's just wrong here. And I believe this is a dangerous precedent to set that every public company is bad for society somehow, which doesn't make sense at all. It's not backed up with the the data. Or that reporting your numbers and being transparent makes you short-term focus.

[00:28:23]That's just again wrong. We have the biggest companies in America making the biggest long-term investments they've ever done in society ever. More capex is being spent this year than all of society ever. So the idea that these companies are short-term focused is just absurd. This clip in 2 minutes, he's wrong on multiple fronts. And that is why it is the fill of the