Transcription
In a very nice little village where a lot of people would love to live, there are 100 identical houses. But the owner of all these houses, who is the same person, a certain Ilon, decides to sell only one. Just one. So on the day of the sale, there are 20 buyers who rush to make an offer. There are auctions that are set up, the bids skyrocket, and there is finally one buyer, just one buyer, who ends up losing it a bit and buying a house for 20 million euros. So the next day, all the financial newspapers headline "Yon village is now worth 2 billion euros." It's math, isn't it? 100 houses at 20 million, that makes 2 billion euros. Except it's an illusion, an illusion of wealth. Because if the owner tried to sell the other 99 houses the next day, the price would collapse. Remember that there were, uh, 20 buyers for just one house. So 20 buyers, which is a lot, but if there are 99 houses for sale, that changes things completely. So the price will naturally collapse. Welcome to the behind-the-scenes of the IPO of SpaceX, one of Elon Musk's companies that manufactures and launches the most advanced rockets in the world. I think you've seen the images, it's quite magical. And today, it's important to know that 80% of everything sent into orbit, whether it's satellites, resupply, or even humans, passes through Elon Musk's rockets. And SpaceX is preparing to pull off the deal of the century this year because Elon Musk doesn't just want to take SpaceX public. What he wants to do is hack the NASDAQ system to force your savings, your ETFs, to buy a tiny part of his empire at a price disconnected from reality. And to understand Elon Musk's financial genius, or financial cynicism, depending on your point of view, you need to look at how the NASDAQ index works. So the NASDAQ, which is the stock exchange for technology companies in New York. Normally, being listed on the NASDAQ means joining the club of the 100 largest tech companies in the world, or at least in the United States, but practically the world. So, it's something very serious. But there are two safety nets that no one is supposed to break. The first is what's called the float in English. It's the portion of a company's capital that circulates freely and that anyone can buy or sell. Let's take Bernard Arnault and LVMH. Bernard Arnault and his holding company own a little over 50% of LVMH. At least, in terms of euros. If you consider voting rights, it's much more. But this leaves about 49% in the hands of the market. So anyone can buy and sell LVMH shares. And this is called a deep market, meaning there are enough shares available on the market for the world's major funds to buy securities without being able to manipulate the market. And traditionally, the NASDAQ required at least 10% of shares to be available on the market. If it was below 10%, the stock was considered too narrow, too risky, too easy for a single buyer to manipulate. And the second lock, then, is time. It's that before, a company had to prove its stability by remaining listed for at least 3 to 6 months, which is relatively short, mind you, before hoping to be included in the index. So the goal was to avoid hype bubbles and, you know, the brutal volatility of the first few days after an IPO. And Elon Musk knows this issue of indices very well because Tesla, for example, waited 10 years, 10 years of being listed on the stock exchange, before being included in the famous S&P 500 index, the largest American index. Simply because Tesla had not managed to meet the criterion of four consecutive profitable quarters. So he was very frustrated by that, by not being included in the famous index for 10 years. So on one hand, we have Elon Musk's desire to be included in an index, and on the other hand, we have the NASDAQ, which also has problems. Why? Because IPOs are becoming rare. Companies are trying to stay private for as long as possible. So for the NASDAQ, missing out on the next giants of the decade, SpaceX, OpenAI, Anthropic, Stripe, etc., is not an option. So, the NASDAQ finally cracked. Elon Musk obtained what is now unofficially called the SpaceX exception. That is to say, for him, the NASDAQ rewrote its rules. First, express entry, meaning no more waiting months of being listed before being able to join an index. A rule called "fast entry" was created, allowing entry into the index in just 15 days. Then, the craziest part is that instead of looking at what is available for sale, the famous float we talked about, the NASDAQ agreed to base its calculation on total capitalization. So it doesn't matter if Musk only puts 5% of his company up for sale; if those 5% trade at a base of 80-90 billion dollars, the NASDAQ considers the company to be worth 1750 billion dollars, and that's the valuation being discussed for SpaceX right now. And this makes SpaceX instantly one of the largest positions in the index. And this is where the index effect becomes super powerful because today, I think you know it, but the majority of money in the stock market comes from passive management, the famous ETFs that follow indices. So when you put 100 euros into a NASDAQ ETF, for example, the ETF's algorithm doesn't think; it buys the shares of the 100 companies that make up the index, according to their size, of course. So if SpaceX enters the index with a theoretical valuation of 1750 billion dollars, ETFs worldwide that are indexed to this index will receive an automatic buy order that could ultimately amount to tens of billions of dollars, all for a single stock. And as I told you, Musk will probably only put 5% of the shares on the market, so ultimately all this demand will target an offer that is likely to be minuscule. So billions of dollars from pension funds, ETFs, etc., will fight for a handful of shares. So during the SpaceX IPO, we will probably see its stock price explode, not because the company has found gold on Mars, but due to a purely mechanical effect. And to truly grasp the intellectual scam, you need to understand a fundamental concept in economics, that of houses I was talking about earlier: price is set at the margin. The last transaction sets the price. And that's exactly what I was telling you earlier with the houses when I said the little village was worth 2 billion euros, or rather just because one house sold for 20 million. And in the stock market, it's exactly the same. When we talk about market capitalization, we take the number of shares, the total number of shares multiplied by the stock price, the last listed stock price. But this formula is misleading because it leads you to believe that you can sell all the shares at that price. And that's false. Only the last share is traded at that value. SpaceX might be worth 1750 billion dollars, but that value holds as long as the rest, everything that isn't float, the remaining 95%, doesn't sell. Where this manipulation by liquidity is most blatant is in the world of crypto, where it's very easy to become a paper billionaire in 10 minutes. You simply create a token, let's call it Space. I haven't checked if there's a real token called Space. You create 10 billion units of this token. It's just a number to enter. You keep 9.9 billion for yourself, for your friends. This is called the lock-up. You then put 100 million units up for sale on an exchange. This is the float. Then you work your magic. Either you pay an influencer, or you create hype, etc., with one goal: that a buyer, even just one buyer, agrees to pay 1 dollar for a Space Coin. And very quickly, you'll see on CoinMarketCap, Space Coin market capitalization of 10 billion dollars. So you are officially a unicorn, you're worth as much as Renault. All because one person decided to buy one Space Coin for 1 dollar. But what happens if you try to sell 100 million tokens at 1 dollar to quietly pocket 100 million dollars? The price will instantly drop to zero or close to zero, simply because there's no market depth. The marginal buyer is, well, ultimately this poor guy or this poor ETF who agrees to pay top dollar for the last available unit. And in the case of SpaceX, it remains quite easy to attract this marginal buyer because we see two very strong aspects. We've seen the liquidity problem, and on the other hand, we have the appeal of space, the appeal of AI, etc. So it's very easy to find this marginal buyer, whether it's an individual fan of space or an index fund that will pay, I'm just guessing, 1000 dollars per share on the market, and that will cause all of Elon Musk's shares, all the shares of venture capital funds that are already shareholders of SpaceX, to be valued at that price. And what bothers me in the case of SpaceX is what I was telling you earlier: this marginal buyer will ultimately be individual investors or ETFs. Especially since in these IPOs, you know, individual investors get almost nothing at the official initial listing price. So very often, they are forced to buy on the market at much higher prices. And if you remember the Airbnb IPO, the official listing price was 68 dollars, but the first listed price was 144 dollars. So a second after the start of Airbnb's trading and its official price of 68 dollars, most of the individuals who rushed in paid prices at 113% more, 144 dollars, 113% above the listing price. I fear that SpaceX's stock price will explode, especially solely because of this problem, or rather thanks to this problem of low liquidity of shares put on the market, much more than on fundamentals. Because the day the float increases, what we call vesting or unlocking, the day SpaceX employees or early investors will finally have the right to sell their shares on the market, we will have an offer that will flood the demand. And then, the illusion of a potential 1750 billion dollar capitalization will potentially evaporate, giving way to the reality of liquidity. So, before going further, I wanted to talk for 2 minutes about Saxo Bank. You know, Saxo supports my channel and is especially my favorite platform for managing my portfolios daily. What I'm looking for is quite simple: first, to be able to invest everywhere. With Saxo, we're talking about 23,000 stocks, 7,000 ETFs, and over 5,000 bonds available. Another important criterion for me is to have low, clear, and consistent fees, whether in Europe, the United States, or Asia. And precisely on fees, if you open or transfer a securities account, a PEA, or a company account, you can benefit from 500 euros of free brokerage fees for the first three months if you click on the link in the description of this video or podcast. Alright, let's get back to it. Well, you see, I am very critical of Elon Musk's method, who is really trying to play with the rules, even more than playing with the rules, so transforming the rules to have a kind of artificial demand or rather an artificially weakened supply. But we must admit something: this company, SpaceX, has something magical about it. Elon Musk, and I'm not a fan of the person, has nevertheless created an incredible company. If you ask anyone on the street what SpaceX does, those who know will tell you they send rockets into space. It's true that it's really the brand image, the prestige, the storytelling that makes investors dream. But SpaceX is much more than a space transport company because it's a complete integration between launchers, the Falcon launchers, so really the image we have of the rocket, the Starlink satellites, and then services, including AI. Now, it's clear that the launchers will fascinate us because that's where we see the magic of technology, but the real financial gem in SpaceX is really Starlink. In 2025, Starlink crossed the symbolic milestone of 100 million subscribers in over 150 countries. Starlink is a constellation of thousands of small satellites that envelop the Earth. I think you've already seen them passing in the sky. All this to offer high-speed internet everywhere, even in the middle of the desert. And it's true that for Musk, it's a jackpot because he's no longer just selling rockets or rather rocket transport; he's now selling monthly subscriptions. And we know that as investors, we much prefer this type of business model. For 2026, Starlink's projected revenues are around just under 19 billion dollars, which is nearly 80% of SpaceX's total revenue. And when we look at the margins, that's where it gets crazy because the launch business, the Falcons, Falcon 9, etc., is a business with decent but limited margins. Whereas Starlink is software, it's subscriptions, and here we're talking about 60% operating margin. So once the satellites have been launched and are in orbit, each subscriber paying 120 dollars a month becomes almost pure profit. And yes, we know this platform business well. Generally, it's a business that, as I said, investors like. And Starlink, precisely, is one of the two aspects that justify a valuation of 1750 billion dollars for Elon Musk because without Starlink, SpaceX would just be a kind of space Airbus, probably valued at 100-150 billion dollars. Whereas Starlink has another very interesting point: Starlink has a clear path in defense. We know how much Elon Musk changed the war in Ukraine by cutting off service to the Ukrainians at times and then to the Russians. We now know that Starlink will be integrated into the American missile defense shield, the Iron Dome. And when they send 80%, as I said, of what is sent into space passes through them, we see that they have a kind of monopoly in launching. So, they have a fairly unique position, and as I said, Starlink is one of the aspects that allows SpaceX to be valued so highly. But the other point is that in February 2026, Musk finalized the integration of xAI, his artificial intelligence subsidiary, into SpaceX. So officially, it's to manage a constellation of 40,000 satellites in the sky that communicate with each other via laser, etc. They say an ultra-powerful AI is needed. They don't have 40,000 satellites yet, but that's Musk's goal. But above all, Elon Musk has understood that integrating the artificial intelligence subsidiary into SpaceX allows him to add a zero to the valuation. Because now, by merging xAI, artificial intelligence, and SpaceX, he sells investors the dream of orbital intelligence, meaning data centers located in space, cooled by the vacuum of space, with almost infinite energy thanks to the sun, and most importantly, outside of any terrestrial jurisdiction. And we know Elon Musk's view on this. So all of this is the perfect narrative for the marginal buyer who wants to bet on the future. I'm really looking forward to seeing what this IPO will be like, which apparently shouldn't be too long, and given the current stock market valuations, we can understand why Elon Musk is in such a hurry. In my opinion, it's going to be truly crazy. Crazy because we have a bit of everything: the size, the scale, the narrative, and then this mechanism of liquidity with reduced float, if you will. But it's important to realize that this reduced float mechanism is a double-edged sword because, indeed, it will probably boost the stock in the first weeks, the first months, but when you go very high with very little volume, you can come down even faster. So the crash test will take place in December 2026 if SpaceX is indeed IPO'd in June 2026. And what will be interesting is to see the behavior of employees and venture capital funds. But especially employees, imagine them: they've received shares, they're paper millionaires, they surely dream of changing their lives in some way, but they can't because they absolutely have to sell them on the market, and they will have the opportunity to sell all of that starting in December, or at least after 180 days. So we'll see how they behave, both the funds and the employees. Now, be careful, even though the NASDAQ rolled out the red carpet for Elon Musk, they're not completely crazy either. They introduced a new rule in 2026 stating that if a company has a float of less than 20%, which will likely be the case for SpaceX, its weight in the index will be capped. So even if SpaceX is worth 1750 billion dollars on paper, it cannot weigh more than 4 or 5% in the NASDAQ-100 index. So if Musk tries to maintain a float that is too low to manipulate the price, he will himself limit the amount of shares that ETFs are forced to buy. I find it quite fascinating what Musk is willing to do with the stock market. He has clearly understood that liquidity is a weapon. We know he fought hard against short-sellers on Tesla. And so what he's doing now is transforming SpaceX into a kind of giant crypto. And I find it a shame because, even if I'm not a fan of Elon Musk, it must be admitted that SpaceX's business model is truly fascinating. We have very little information, but I have the impression that the fundamentals are not that bad, especially thanks to Starlink. As I told you, based on the first figures I saw, even though what has been published by SpaceX is confidential today, we don't have the information, but there have been some leaks, and I have the impression, I was talking about operating margins of 60% for the Starlink part, that the fundamentals are not that bad. So I'm eager for it to be introduced, to see the IPO madness, but also to see the documents, balance sheets, income statements, to see how good a company it is. I don't plan to buy any. You can imagine, I won't be buying SpaceX at the IPO or in the following days. But you, tell me in the comments, do you plan to buy SpaceX if it goes public in the coming months? Is it a company that interests you? In any case, as I said, in terms of technology, I find it quite fascinating. And also the fact that there's a defense part, which is a sector that interests me a lot for the next 5-10 years, I find that interesting. But in any case, I don't plan to get into it. Unless the price is really super interesting, but I doubt it very much. So, tell me in the comments what you're going to do. Alright, thank you all and see you soon.