Valuing the SpaceX IPO, New Playbook for Public Markets 6/12/26

 All systems go for SpaceX, and it's historic IPO.
 I'm Morgan Brennan, and this is your morning call.
 [♪ OUTRO MUSIC PLAYING [♪
 Good Friday morning, and welcome to a very special edition of morning call.
 Let's get a check on U.S. stock futures in the back of yesterday's hot rally.
 You can see futures are higher again this morning.
 The S&P, though, only up about, fractionally, about 15, 16 points, Dow, up 256, and the NASDAQ
 right around the flat line about a point higher, playing with negative right now.
 Investors are preparing for the big event for the market.
 SpaceX is a blockbuster IPO, the largest initial public offering in the history of the world,
 selling for more than $555 million shares for $135 a piece.
 This is what they said last week, and they are sticking to their guns with final pricing
 last night, raising $75 billion, valuing it at just under $1.8 trillion.
 The stock will trade on the NASDAQ under the ticker symbol SPCX, and we will have much
 more on SpaceX's IPO throughout the day on CNBC, including my exclusive sit-downs with SpaceX
 President and COO Gwen Shotwell.
 We're going to have more on that in just a moment.
 Let's take a look at shares of other space stocks because they are lifting off ahead
 of this IPO.
 As we've seen, by the way, for a number of weeks and a number of months, just a huge
 re-rating hire for this broader sector, and you can see right here, pre-market names
 like Rocket Lab, AST Space Mobile, Planet Labs, Firefly, Red Wire, others, all trading
 higher in anticipation of this milestone.
 We're tracking treasuries as well.
 We did get that fresh-read lung-consumer sentiment a bit later today coming off the heels
 of two different key inflation reports, but you can see Treasury yields are lower across
 the curve.
 The US 10-year Treasury yielding 4.44 percent right now, Fed sensitive 2-year, 4.04 percent
 right now.
 We have seen just a shift in the last 24 hours in the Treasury market towards the possibility
 not of Fed hikes, but either of Fed holding steady, maybe even putting cuts back on the
 table.
 Two stocks on the move of the back of earnings.
 The Dobie and Lanar right now, you can see both are lower, Dobie's down about 4 percent
 Lanar.
 Down about 2.5 percent right now after earnings, and we are also watching energy prices
 after President Trump's announcement yesterday that he is calling off new military strikes
 on Iran, claiming a breakthrough in negotiations to end the war.
 That is what is sending Treasury yields lower, and that is sending oil prices lower, marketly
 lower right now here, too, with the WTI down about 4.5 percent, trading around 83 bucks
 a barrel, and Brent's also down about 4.5 percent.
 Well below 90, it's trading at $86 a barrel, our bug gasoline, natural gas, also lower,
 but in the Oval Office yesterday, the President claiming the US had made a, quote, great settlement
 of the war, subject to the, quote, finalization of documents, the President is saying he's
 expecting a signing to occur over the next few days, quote, unquote, repeating similar claims
 that he made throughout the war, but the President adding that the Strait of Hormuz will be
 reopened as soon as a deal is signed.
 So let's get to Dan Murphy with the latest.
 Dan, some new comments coming from Iran just a short time ago, and of course you are
 joining us from the region.
 That's right Morgan, good morning, Iran's moon news agency has just published what it says
 are details from a 14 point draft MOU between Tehran and Washington.
 Remember the document hasn't been confirmed by the White House and still requires approval
 inside Iran, but if it's authentic Morgan, it offers a significant glimpse into Tehran's
 demands here.
 According to Merb, the draft calls for an end to the war, the lifting of the US naval
 blockade, the reopening of the Strait of Hormuz, sanctions relief, and access to frozen
 Iranian assets.
 It also reportedly includes some $300 billion in reconstruction assistance, and the release
 of $24 billion in frozen Iranian funds during a proposed 60-day negotiation period.
 Now interestingly, the draft doesn't make a mention of Iran's missile program or its
 support for regional proxies.
 These were key demands of the Gulf States as well as Israel.
 So the question right now is, is this a ceasefire and a confidence building agreement designed
 to buy more time for those tougher talks ahead, or is this a comprehensive settlement
 that actually resolves missiles, proxies, enrichment, and sanctions?
 Either way, Morgan, the markets like what they see, it's risk on across the equity trade
 and oil prices are sinking back over to you.
 Okay.
 Devils in the details, we'll see what we get.
 Dan Murphy.
 Thank you for the latest.
 Well, let's see how global markets are reacting to all of this, Lisa Kim is in Singapore.
 With the trade in Asia and Steve Sedgwick is in London tracking early moves in Europe,
 Lisa, let's start this with you.
 Hey Morgan, so Asian markets wrapped up the trading week in the green as risk appetite
 return on hopes of a potential peace deal in the Middle East, but the highly anticipated
 IPO of SpaceX was really front and center all day.
 Take a look at South Korea's honey semi conductor.
 It's less known compared to the trillion dollar market cap chip makers, Samsung Electronics
 and SK Heinix, but that stock closed higher by jaw dropping 25%.
 This after the company said it is acquiring around 30 billion US worth of SpaceX shares
 in its strategic investment in Elon Musk's terrific project over in Hong Kong and mainland
 China.
 Investors there are blocked by SpaceX from participating in the IPO, but our China reporter
 Elaine reported that some Chinese investors are turning to tokenize assets and Chinese
 companies linked to SpaceX's supply chain for exposure.
 So really all eyes are on that blockbuster IPO today.
 And have a great weekend, let's turn to the early trade in Europe as well with Steve Sedgwick
 Steve.
 Yeah, Morgan, it's always the same way, isn't it?
 Elon Musk and Donald Trump competing for attention.
 So the two biggest stories on the planet dominating here in Europe as well.
 Mr. Trump's hope for an end to this war and of course Elon Musk, which I know is a story
 you're particularly excited about.
 So European equities are also joining the global rally this morning, hopes rise of a deal
 between the US and Iran as well, stocks are boosted by that reporting that Dan was talking
 about from the Iranian state media on what the draft MOU includes and of course trade
 is also anticipating maybe a little bit of volatility on that record breaking IPO as well.
 In terms of sectors, as you'd expect, travel and leisure stocks leading gains in Europe
 as well, all the big airlines lifted by those hopes of a peace agreement oil and gas again
 on the back of what you were seeing with the Brent and WTI price going down.
 The oil and gas sector coming off fairly aggressively as well.
 And I just want to say on a programming note, Morgan, I absolutely love what I've seen
 so far of your Gwynn's shot well interview as well, looking forward to seeing much more
 of it on your show now.
 Back to you.
 Steve, thank you.
 I appreciate that.
 And we're going to be rolling out quite a bit here over the next hour.
 In the meantime, we're having this conversation with seeing this market rally in Europe and
 we had the ECB hike yesterday, is the expectation that maybe perhaps if we get a deal here
 we're one and done.
 Yeah, we want to position these central banks are in.
 Kevin Warsh is going to have the same problem on your side of the pond as well.
 They were hiking rates, but only 25 basis points.
 They were cutting their growth estimates as well and hiking their inflation estimates.
 But a lot of it is just backward looking given the news we've had today.
 They didn't have the luxury of holding off.
 They think they did need to just show a little bit of intent regarding inflation given
 the mistakes, of course, made again on both sides of Atlantic by central banks.
 The last time rounding COVID as well, so they're kind of uping for the first time in over
 three years as well.
 But it's a very tepid move to the upside, only 25 basis points.
 And of course, events now, if we do have a deal in the Middle East, that could mean that
 perhaps the further rate hikes that people are penciling for later in the year, maybe
 they won't happen.
 All right, we'll see.
 Steve Sedgwick, great to have you on.
 Thank you.
 Well, we just touched that up, but we're going to dive a little deeper here.
 SpaceX's IPO, what's set to be an historic day, not only for the company, not only
 for the space sector, but for the broader markets, also retail investors.
 Rocket Maker, the space and AI company, Bucking, Tradition, and many ways in the lead up
 to the company's trading debut.
 And while Elon Musk is the center of conversation around the company, when it comes to the execution
 of this formidable and ambitious and extraordinary mission, there is an incredible team of talent.
 And it starts with SpaceX president and COO Gwen Schottwell.
 So on the eve of SpaceX's road show, I got to go to SpaceX's star-based headquarters
 in Texas.
 I sat down with Schottwell in the only journalistic, the only traditional media interview that
 anyone from the company is doing and getting an up close look at the rockets, the starships
 that are key to the company's success.
 Morgan, so what we're looking at here is the top part of starship or the nose cone.
 It's at a place in the inauguration, we've got the flaps on, we've got some of the tiles
 on, and then the next station, we're going to start adding four structure underneath.
 And if this is ship 42, by the way, we just flew 39.
 How quickly are you turning these out?
 So right now, the individual stations are at about two week exit rate.
 I think final ships are at about one a month.
 That's wild.
 And that's not fast enough.
 We want to go two week centers, one week center, and then probably two a week.
 Welcome back to morning call, returning back to SpaceX and its historic IPO, set to
 raise $75 billion, easily surpassing the previous largest global IPO and record, which was
 Saudi Aramco at over $25.5 billion raised back in 2019.
 Now the shares priced at $135.
 The company enters the public market value at $1.77 trillion.
 This is higher than the market cap of sister company, Tesla, also Meta.
 Tesla is just under $1.5 trillion.
 And SpaceX's valuation is also bigger than Boeing and the entire rest of the aerospace and
 defense companies in the S&P 500 combined.
 The IPO also adding to Elon Musk's already impressive wealth, likely making him the world's
 first trillionaire on paper.
 By the way, keep in following space for a while.
 You knew that the first trillionaire would be minted in space.
 It will also add to the wealth of a number of other company insiders, including SpaceX,
 President and CEO Gwen Chattwell.
 But on the eve of SpaceX's road shows this last week, I got to go to SpaceX's star base
 in Texas.
 And I spoke with Chattwell exclusively, this is the only journalistic sit down interview
 anyone from the company is doing around this history making IPO, discussing a number of
 topics, including why right now felt like the right time to take this company public.
 I wasn't sure we would go public.
 Having a private company was important to us early on because we really worked focused
 on quarterly financials.
 We were so focused on the long-term outlook for the company.
 But we've gotten so many of the building blocks completed for so many of these different
 business areas that actually feels like the right time.
 Now, instead of, I mean, there's still development left to do.
 We still have work to do on Starship, we've got work to do on Starlink.
 We've got the building blocks there and now it's time to scale.
 What is being public and able to be private at this point does not?
 Capital.
 $75 billion.
 Give or take.
 Give or take.
 Mine has 20 billion to pay on that.
 Yeah, scaling is very expensive, actually, and the things that we're doing cost a lot
 to do.
 And what I want to just focus on the financials, we've been feeling over the last few years
 a lot of pressure from everyday Americans and our friends that wanted to buy stock.
 And there was just no way for these folks to get in.
 Unfortunately, probably some got scammed, but there was no way to buy SpaceX stock.
 And it feels like a company that, you know, great people should be able to own a piece
 of.
 It's interesting to hear you say that because, obviously, SpaceX has rewritten their
 space and defense playbook.
 Are you rewriting this retail investor playbook, too, with this IPO?
 You know, I think we'll see what happens, right?
 But certainly, letting everyday Americans and everyday people purchase the stock was
 a big focus for Elon and the team.
 Yeah, I want to get into the businesses themselves.
 I first just one more question on all of this.
 And that is, you just mentioned the long lead times, I mean, SpaceX has famously done
 things that everybody else has said wasn't possible, whether it's Broadband Leo or whether
 it's reusable rockets.
 You can go down the list, but all this takes time to be a publicly traded company.
 Now you're dealing with investors that are thinking on a quarterly basis and any headline
 can move the stock.
 So how are you just saying to that?
 So I hope the folks that do decide to invest in SpaceX take a look at our history and see
 how we do operate and become comfortable with the way we operate, right?
 Our horizons are very long term.
 I do not want to focus on quarterly earnings.
 I'm not saying we're not going to do right by our investors, but what folks that invest
 in SpaceX, SpaceX AI need to know is they need to know that what we're doing is very
 futuristic and we should be thinking about the future as well as the current quarter.
 Yeah.
 And 300-page plus perspectives that is very focused on the future.
 But out of the gate, what should investors be focused on judging the company on right
 now?
 Well, I think for sure you need to look at our track record.
 We do.
 It's funny.
 Elon jokes that we make the impossible.
 We just make it late.
 People say, oh, you're moving so quickly and we feel like we're actually behind.
 We always feel very behind.
 I do want people to basically look at our track record, look at our history.
 We do do really difficult things.
 We do bring them to product level.
 In fact, you know, XAI is definitely starting to be product focused.
 It was very much a lab, very much a research organization and now after the acquisition
 and obviously they were focused on product more than just when we purchased them earlier
 than that.
 But they're definitely focused on product now.
 I just want to go back to something you said, that tend to be a little late, but you
 always get it done.
 Yeah, kind of think about that in terms of forecast and managing investor expectations
 around timelines, because it's a little different than what you usually hear.
 We're very candid.
 I mean, some people look at us as a very quietly, you know, not very public company and
 I mean it in the financial way.
 I think we put a lot out there actually.
 I think we're quite candid about what we're trying to do, the risks involved, and when
 we're late, we're late.
 Like it's pretty obvious when you set a launch date and you don't hit it.
 So I think we're pretty candid about kind of the hurdles in front of us.
 And if we're late or if we have a misstep, we'll be very clear about that and why.
 And by the way, I think it's actually really important to have failure.
 You don't have failure.
 Like, if a launch goes perfectly, all you've learned is that that launch vehicle
 on that day worked.
 You didn't get any more data than that, right?
 So when you have failure, you actually get this treasure trove data.
 So failure, whether it's in the development phase, obviously you don't want failure on
 the mission phase, or failure in missing milestones from a time perspective, you learn from that
 and you can get better.
 What I think also speaks to this highly iterative process that's under the hood in all parts
 of the businesses that space, including there at Starbase, with Starship, not a single
 rocket that's being produced and of course those are being produced on a monthly basis
 is the same.
 And it does speak to this fast and aggressive timeline to just keep testing these vehicles
 and testing the technology to the max here to get it to market more quickly, actually.
 So let's get more on the SpaceX IPO and what we just heard from Gwinshot while joining
 me now in studio is Jennifer Nason, former global chairman of Investment Banking at
 JPMorgan.
 On the board of Rio Tinto and Accenture, Aaron Burnett, founder and CEO of Mach 33 Financial
 Group and independent research firm and asset manager that specializes in the space economy
 and has been open sourced modeling the SpaceX, like nobody else, I think, across the financial
 industry.
 And it is just like a special morning call crew is what I'm going to call this.
 So excited to have both of you here.
 And I think I just want to start right there and Jennifer, I'll start with you, your reaction
 to what we did just here from shot well as we do see SpaceX, make history today.
 Yeah, she's so impressive.
 I'm so glad you showed that clip and I feel like this is a bit of an unveiling of Gwinshot
 well with the SpaceX IPO.
 Elon can take a lot of the oxygen out of the room, but she's been there from the beginning
 employee number seven, 24 years.
 She's really been the engine room for a lot of what's happened here.
 So I think this is a great moment for her personally and I'm glad you got to do that
 session with her.
 But it's an exciting day and it's going to be a big moment for the markets and a big
 moment for American capitalism and innovation and entrepreneurship and it's worth celebrating.
 And hopefully the trading will support everything I just said and it'll be a great day for
 the stock as well.
 Yeah, and of course we're getting reports that it's something like four times oversubscribes
 and when you think about how much capital they've raised, I mean, we're talking about
 a huge, huge potential order flow to that point.
 It's pretty incredible.
 10 years ago, Aaron and I know you and I are sort of in a similar boat on opposite sides
 of the coin here.
 When I started covering the business of space, I had a lot of folks who thought I was
 wasting my time and yet here we are with this moment and this milestone, how important
 is SpaceX?
 Not just to the space economy, not just this future build out of AI, but just to the future
 and to the markets along the way as well.
 Well, first let's say it's awesome to see Gwen on camera.
 Think every investor that I've ever talked to loves Gwen, so it's really cool to see
 that.
 But yeah, it's a very important moment.
 As you mentioned, space has been when we started covering SpaceX back and I think it would
 have been 2324 as almost as if it was a public company.
 We thought we were nuts to really be covering at quarter to quarter.
 And so yeah, it's an incredibly important company and just like Gwen said, it's a long-term
 vision.
 If you're in space, you really need to understand that everything gets delayed and there's always
 these delays that happen and just have to be able to understand and look at the long-term
 vision.
 Yeah.
 And almost $1.8 trillion market value here as it goes public.
 If it is a long-term vision, I get asked this question by multiple people and multiple
 places in my life just this week.
 Why buy in now to that long-term vision if we are talking about quarterly updates along
 the way?
 Yeah.
 This is a big question.
 It's always, when we were looking at this back in early 2020, initially as an investment,
 every investor we've ever talked to, it's always been the exact same question.
 This is the top where SpaceX can go from here.
 And so what we've seen is that everyone that's answered that question, it probably is
 the top has been annoyed that they didn't buy in and everyone that did buy in is wishing
 they had bought it more.
 And so that's a recurring theme, not to say that history is guaranteed to repeat itself
 of course, but what we've seen here is that when you kind of combine and do the modeling
 that we've done, which is very robust and deep and it's operational, it's bottoms up,
 you really start to get a lot of conviction.
 And I think that's where really our kind of willingness to share things publicly has
 come from is just seeing all the numbers, seeing over time, kind of leveraging the physics,
 just to understand what the future looks like, you don't have to guess 14, 15 years into
 the future, it might be hard to guess normally.
 So if you're looking at physics, constraints are pretty bound and you don't have to guess,
 or when mechanics probably won't change in that 15-year timeframe, rocket equations won't
 change in that 15-year timeframe.
 And so it gives you a lot of confidence to say, what's the some of the parts here, what's
 the opportunity, what's the capacity for Starlink, and you can just build off of that
 from the revenues.
 So timelines might be uncertain, but the science is not.
 I want to go back to some of the comments we just heard from shot well regarding retail
 investors regarding sort of going to market here.
 They put it out last week, $135 a share, we didn't get a price range.
 Small float, they didn't move from any of that with final pricing last night.
 And of course a record allocation to retail investors here as well.
 How is the IPO market changing with this offering if it is, or is this really just
 a one-off?
 Yeah, I don't know if it's a one-off, and some of what's happened here has been done
 before Tesla has a big retail ownership as well.
 So I think he's, I think they are operating within the parameters of sort of a more typical
 IPO.
 They're just pushing the envelope in certain areas.
 So retail, they're definitely pushing the envelope, you know, 21 banks involved, some
 of the governance structures, just the way they've gone about a few things.
 They've pushed the edges a little bit, but I don't think there's anything terribly off
 spec here.
 I think they've chosen to really bring retail in.
 It's sort of the nature of the beast for them.
 I think it's very consistent with how Elon sort of sees the world.
 It probably will create a little more volatility, but I'm all for participation in the market.
 And I like to see that this is a good combination of institutional and that the average guy in
 the street, you know, gets to own the stock at inception as well.
 Yeah.
 I just want to quick question this before you go to commercial break and that is you're
 already seeing this launch of things like two times levered ETFs tied to SpaceX and, you
 know, I think there's been some fishing scams out there this week, etc.
 I mean, shot will touch it on at the fact that part of the reason they're coming to market
 is because they want everyday Americans to participate in this, their friends to participate
 in this, and that some folks perhaps have gotten scammed along the way.
 How frothy is it to see some of these new types of products come to market right now?
 Yeah.
 I think it's a good thing.
 I like to see the innovation.
 I think, you know, the IPO process has basically not changed.
 I was in banking for 40 years.
 It was basically done the same way throughout my career.
 I think it's good to see some innovation and the capital markets need to evolve.
 And I think SpaceX is a great, they have the cloud and the power to sort of push things
 in the direction they want to go.
 Now we'll see how it trades and not just today, obviously, because it's not a referendum
 on one day's worth of trading here, but we'll see how this evolves.
 And hopefully what we have is sort of a Microsoft, you know, if you'd bought Microsoft in 1980
 and they owned software for a long time, is this SpaceX going to own space?
 And are you going to get on the ground floor of that?
 Okay.
 We are going to take a commercial break, Jennifer and Aaron, we'll have more with you
 throughout the hour, and it's great to have you here.
 Here of my exclusive sit down with SpaceX's Gwenshot Well as well, this is all part of
 CNBC's complete coverage of the SpaceX IPO all day, and we do have you covered every
 corner of the earth and bond, then beyond, but straight ahead, housing headwinds.
 The home builder warning about growing risks, sending its shares sliding, its seal and
 iron, your screen right there down about 3%, but first a check on shares of RocketLab as
 well.
 As Sarah labs, core weave, nebius, teradine, all officially being added to the NASDAQ 100
 on June 22nd.
 The move is part of the index is quarterly rebalance, and you can see all of those shares
 are popping this morning.
 Morning, call your back.
 Welcome back.
 Let's get a quick market flash on Adobe shares.
 Those are under pressure, despite better than expected earnings.
 The company announcing that its CFO, Dan Dern, is leaving the company Monday to become
 the CFO of Marvel technology in addition to the Q2 results beat.
 Adobe also raising its full year outlook for the year was above street forecasts, and yet
 the stock is down 4.5% right now, pre-market.
 Well, Linar shares are also sliding on the back of its latest results, beating on earnings
 but missing on revenue, also cutting its full year home deliveries forecast to around 82
 to 83,000 that's down from 85,000.
 Linar citing high interest rates, geopolitical uncertainty, and those shares are down about
 2.5%.
 We'll still on deck.
 We've got much more of my exclusive one-on-one with SpaceX CEO, Gwynne Shotwell, take talking
 key issues for the company, including orbital flights for Starship, massive AI spending,
 and the profit engine that is starling.
 You don't want to miss it.
 We'll be right back.
 I'm Morgan Brennan.
 Welcome back to Morning Call.
 Let's get a check on you as stock futures on the back of yesterday's rally.
 You can see green on the screen right now with the SMP up 45.
 We dial up 432 points in the NASDAQ up about 159, 160 points, pre-market investors preparing
 for the big event, SpaceX's blockbuster IPO, selling more than 555 million shares for
 $135 a piece, raising 75, that's before the green shea, raising $75 billion, valuing
 we added just under $1.8 trillion.
 SpaceX will trade on the NASDAQ under the ticker symbol SPCX, and we will have much more
 on SpaceX's IPO throughout the day on CNBC.
 Also throughout this hour, so you want to stay tuned, including more of my exclusives
 sit down with SpaceX, President and CEO, Gwynne Shotwell in just a moment.
 But first let's also get a check on energy prices, because those are dropping after President
 Trump's announcement that he is calling off new military strikes on Iran, claiming
 a breakthrough in negotiations to and the war WTI is down about 4.5% $83 and change
 per barrel, and Brent is also lower trading around 86 bucks a barrel, a positive finish
 to the trading week in Asia, as well the knee-k up nearly 3% cost be up over 4.5%.
 And those gains are carrying over to Europe in early trading as well as you can see on
 your screen.
 We got the DAX and the CAC both up 2% right now, checking some of the morning's latest
 headlines.
 In video has started pitching its new Vera Ruben AI chip to Chinese customers.
 There's reports the company says that they can start placing orders for the chip, which
 could be available as soon as August.
 Some Chinese companies have shown interest in the Vera chip, which the Ruben chip, which
 is in videos first standalone CPU built for agentic AI, or systems that can perform tasks
 autonomously.
 You can see those shares are about 7.10 to 1%.
 The US is planning major cuts to fighter jets and warships that it supplies to NATO operations
 in Europe meantime.
 The New York Times reporting that the move would limit NATO's ability to launch long-range
 strikes and conduct surveillance.
 And President Trump says that he will nominate former SEC chairman, Jay Clayton, as the
 next director of national intelligence, the announcement coming more than a week after
 the president appointed his federal housing chief Bill Poltie as acting director to replace
 Tulsi Gabbard.
 Now, that led to pushback from Democrats and some Republicans on Capitol Hill.
 And a failed vote in the House to extend the Foreign Surveillance Program, known as
 Pfizer, was also, in part, perhaps a result of that.
 Clayton currently the US Attorney for the Southern District of New York, and he will need
 to be confirmed for this new role by the Senate.
 Also, a known entity to CMBC back to the big story viewers, I should say.
 Big story of the morning, SpaceX's IPO sets to begin trading on the NASDAQ in hours,
 just mere hours.
 The eve of SpaceX's road show, though, I got to go to SpaceX's Starbase headquarters
 in Texas, and I sat down with President and CEO Gwen Shotwell.
 It's the only journalistic interview anyone from the company is doing amid this history-making
 IPO.
 Shotwell and I discussed the next steps for SpaceX's Starship launches.
 When do we get to full reusability?
 When do we get to orbital flights for Starship?
 So it largely depends on the FAA, actually.
 We have done an in-space Raptor lighting, so we feel pretty comfortable, but we want
 another sub-orbital shot on the next flight.
 And then I hope we at least attempt an orbital injection on flight 14, and then from there
 on out.
 Okay.
 What do you think is a reasonable timeline?
 I realize a lot has to happen.
 A lot has to happen.
 I think we're, so what is it, beginning of June, maybe a month-ish away from flight
 13?
 Okay.
 And then we should fly every month.
 So we could actually see a Starship that is in operation by the end of this year.
 Oh, in orbit?
 Yeah.
 Oh, yes.
 Welcome back.
 We're turning back to SpaceX's historic IPO.
 My exclusive sit down with President and CEO Gwen Shotwell on the eve of the company's
 Rocho at Starbase and Texas, talking about SpaceX's massive AI spending.
 It's profit engine, profit engine Starlink and much more.
 Take a listen.
 I never really think about topping out, it's just not in the, in the line frame.
 We will, so the early satellites, we still have some very early satellites up in orbit.
 They're not as good as the latest ones, and they certainly don't have as much capacity
 as the V3s that we'll be flying later on this year on Starship.
 And so I feel like we will continually refresh the old satellites that we have, and we'll
 add a lot more capability.
 We are actually constrained by capacity in many markets, it's really important markets.
 So scaling is actually really quite important to the revenue story for us.
 Meaning there's more demands than you can actually, so there's more demand than we can
 still feel right now.
 Yes.
 Okay.
 Starlink mobile, how big is that opportunity?
 I think that opportunity is huge.
 If you were to look at numbers of subscribers, I think Starlink mobile will far exceed Starlink
 broadband in the home.
 I think more than half the population, the global population has a cell phone, which is
 a shocking, but it's some, it's crazy numbers of people have cell phones.
 Not everybody is going to need broadband, a Starlink broadband in their home, there's lots
 of other options as well.
 But I think the numbers of users of Starlink mobile will far exceed our Starlink broadband.
 How are you thinking about launch in-house versus out-of-house for government customers,
 commercial customers over the long term?
 What I think is really important with launch, or really with almost any tough engineering
 development, is you want to do that thing a lot.
 Like production cars tend to be more reliable than the hand-built one-off cars, right?
 The more you can fly a vehicle, the more reliable it will be, the safer it will be.
 Starlink provided that market for Falcon 9.
 We flew 100 Starlink missions in a year, right?
 The AI satellites will be that same market, but for Starship.
 And so we find the AI satellites to be incredibly important to the development of Starship.
 Do you think you can get them going by 2028?
 Because I saw on the prospectus, targeting as soon as 2028 to begin deploying some of
 these AI-computed satellites, there's also severe lack of atmospheric cooling in terms
 of challenges, hardware degradation from cosmic radiation, a number of other things.
 What does it take to actually crack the codes on some of these challenges?
 You know, the AI satellites are, to some extent, simpler than the Starlink satellites.
 I think the technology on the Starlink satellites is far more, it was harder to achieve.
 AI satellites are simpler.
 I'm not saying it's a slam dunk by any stretch, but I'm not worried about the development
 of the AI satellites.
 We do have, we've got some supply chain challenges in front of us.
 We've got to get solar cells, right?
 And we have to build a lot of chips.
 Not because we necessarily want to build chips, but I don't think the chip manufacturers
 are thinking about scaling in the same ways that we're thinking about scaling, or they don't
 believe us.
 All right, I want to get into that in just a moment, but first, just one more question on
 these data centers in space, and that is up to potentially a million.
 Where do they go?
 How do you manage that many satellites in space?
 You know, it's interesting.
 People talk about the size of the Starlink constellation, 10,000 satellites.
 It doesn't seem like a lot to us.
 I'm not saying that that team doesn't work hard, but so much of it is automated.
 If you need a 10-people to monitor and babysit a satellite, this would be a total loser,
 right?
 But we don't.
 We have maybe 10 people at a time monitoring the entire 10,000-sweet satellite suite of
 Earth Starlink.
 So, these are largely very highly automated satellites, and the constellation itself works
 together in a highly automated way.
 Okay, so let's go back to the chips, TerraFab, joint venture with Tesla, Intel's in the
 mix as well.
 What does this bring online in terms of capacity, capability, supply chain challenges being
 averted here for SpaceX?
 Yeah, so there's no question that we have a lot to learn in order to get this done, but
 we are a company of builders, right?
 We build launch vehicles, we build our launch sites, we've brought our own software, we're
 producing some of our own propellants for the vehicles right now too.
 This seems like a very obvious thing, next step for us.
 We live a lot to learn, there's a huge amount of equipment that we have to invest in.
 We'll be making our own solar cells, that's going to be a huge part of this.
 So the satellite, the AI satellite is basically a rack of compute with a giant solar array.
 So solar's critically important to us, and we're spending a lot of time and energy thinking
 about that and being able to produce our own.
 Is the way to think about this, that especially with XAI, as part of SpaceX now, that you
 are building out vertically integrating the full AI tech stack, much like you've done
 in space?
 That is actually a great way to think about it, and I'd love to reframe it.
 As well, so yes, we are building data centers here on Earth, but the most efficient place
 to put inference compute is on orbit.
 It's always sunny in space, you get 6x the amount of power out of a solar cell in space
 as you do here on Earth, and cooling is free because space is actually quite cold, so radiative
 cooling is free.
 When we see these satellites actually go to space and we able to engage in that AI compute,
 does it disrupt all of the trillions of dollars potentially that's going into the AI
 infrastructure here on Earth, does it render it obsolete?
 No, I think you'll need both, actually, but hopefully the massive growth area will
 be AI in space.
 I don't think people are making a mistake by building data centers on the planet right
 now.
 Making a mistake from the perspective that you're not going to need that compute, you're
 certainly going to need that compute, but I think the growth in compute will far outpace
 in space than it will here on planet Earth.
 Of course, SpaceX and under the hood within the AI business, AI specifically is seeing
 a big ramp in CapEx as well amidst all of this, so how to think about that trajectory in
 that space?
 So luckily, the Starship program has a huge amount of capital expense as well.
 I think if I were to go back to the panorias days of Falcon 9 and Dragon, and we were to
 talk about the capital investment for that program compared to what we're doing in AI,
 it would be a total mind-blowing situation, but Starship is also the investment required.
 We're building our own natural gas pipelines.
 We're actually looking at basically mining our own natural gas.
 So these huge investments develop our own propellant and bring it to the rocket.
 Launch sites are quite expensive.
 I think you got a tour of our site today that's billions of dollars of capital out there.
 So luckily, we could go from those panorias Falcon 9 Dragon days to the more expensive,
 capital intensive Starship and then to AI, because it is next level expensive, but it
 feels quite doable.
 Well, you can catch the entire interview, and there's so much more to this conversation.
 With SpaceXPresident and COO Gwen Shotwell, it is live now on CNBC.com, and we will be continuing
 to roll pieces of this out throughout the morning, next up 6am Eastern on SquatBox, where we
 talk about the M&A strategy and oh, that merger speculation regarding Tesla.
 Morning call, we'll be right back.
 Welcome back.
 Take a look at futures, because we're moving higher here, taking a leg higher, where the
 Nasdaq now at 130 points to Dow, almost 400, and the S&P just about 40.
 Well, let's bring back our guests for the final, for the hour, for the final thoughts
 on the SpaceX IPO, Jennifer Nason, as well as Global Chairman of Investment Banking at
 JP Morgan, Aaron Burnett, is founder and CEO of Mach 33 Financial Group, great to have
 you both here.
 And I'm going to pick up right where that conversation, that piece of conversation was
 shot well, left off.
 And Jennifer, I'll start with you, because we were talking about the CAPEX ramp, particularly
 where AI is concerned, but also including Starship, the other piece of is the fact that, in
 terms of earthly computing capability, they're starting to rent it out for rather large sums
 to other companies like Anthropic and Google here, as well.
 So are we seeing them actually enter another market, the so-called NeoCloud market, too?
 Yeah, I think they very clever about finding revenue streams.
 That just makes a lot of sense to me.
 And I look, one of the great things about this IPO, I think, is that they're going public
 for the best reason of all, which is to access capital.
 And I think sometimes over the years, with tech IPOs, there's been a bit of confusion
 about why some of these IPOs are happening.
 It's very clear.
 They have big ambitions, they need a lot of capital.
 And although they're a 24-year-old company, there's so much growth ahead of them.
 That's how she frames it, very simply.
 And that's why they're raising all this capital today.
 And I think that's just the best reason to go public.
 Yeah, investing for this big and robust future, Aaron.
 I mean, there's been so much debate about valuation coming into this IPO.
 How do you see it, especially since you have been modeling around this company and doing
 so uniquely for a number of years now?
 Yeah, I think the best way to look at SpaceX and what they're building and all the growth
 opportunities that they have today, is really it's kind of like a bond staple to a call
 option.
 That's the way we label it internally.
 Your bond being Starlink, the ability to really produce relatively high cash flow, which
 we believe in our estimates are quite larger than most people's, I think.
 And then the AI compute is clearly there.
 There's clearly deals on the ground.
 We believe that's obviously going to be cheaper in space as well.
 And that scales to just some kind of ridiculous numbers that look kind of nuts when you put
 them on a screen forecasting out into 2040.
 And of course, M&A has become part of the equation.
 We're talking about this a little bit more in just a few minutes on Squawk Bucks, but
 Jennifer, I mean, obviously M&A is rocking and rolling in general across the markets
 right now.
 But for SpaceX, I mean, they spent the better part of two decades really sort of steering
 clear of that.
 And then we get spectrum deals with Echo Star, XAI being absorbed by SpaceX now, an option
 to buy cursor as well.
 And of course, all of the speculation around the possibility that SpaceX merges with
 a sister company Tesla at some point.
 But how does it speak to what we're seeing with this AI landscape and how it is driving
 deal flow?
 Yeah.
 I think the M&A environment in tech generally is a bit of a tale of two cities.
 So you mentioned the cursor deal, the capital raising, bioanthropic, and others.
 If you or the GameStop eBay situation, if you add all of that together, then the tech
 M&A environment is rocking and rolling.
 But if you strip out some of those funkier deals, we're actually tracking it 50% below where
 we were last year.
 Oh, so there's the big AI and the big player story, and then there's everybody else.
 So it really depends on what lens you put in it.
 But we're definitely seeing this concentration around big AI and what's happening, and that's
 where all the action is right now for sure.
 Yeah, I just want to throw this calcium chart up on the screen here.
 When Tesla and SpaceX will merge, this is what prediction markets are putting.
 56% before May 1st, 2027.
 Are you modeling this possibility into your valuations, your analysis of SpaceX or no,
 you're putting that to the side for now, just focusing on sales?
 Yeah, there's enough new things coming in with the terrestrial compute and all that.
 It's very difficult to try and forecast the Tesla at this stage.
 So, yeah, we like this strategy and the technology.
 It thinks it makes sense if that were to ever happen.
 It's obviously up to the company.
 But yeah, we haven't started modeling that just yet.
 Okay, we're sub one minute here.
 Aaron, final thoughts as we do look to this company opening up on the Nasdaq for trading
 later today?
 I think that there's a, no idea what it's going to do today in the market.
 I think if you're a retail investor, then you have a unique position to not be bound
 by a certain timeframe.
 You should be thinking long-term.
 Okay, sub 30 seconds.
 Jennifer, what does this mean for the IPO pipeline with Anthropic and OpenAI?
 I think that let's hope that stock trades up.
 Nobody wants to see anybody lose money, but irrespective what SpaceX is doing is good
 for the market, good for the world, good for civilization.
 It's a really important day for American innovation, so let's play the long game here.
 All right.
 Jennifer Neeson, Aaron Burnett, thank you both for joining me here on set for a special
 edition of Morning Call.
 CMBC will have complete coverage of SpaceX and its IPO all day.