00:00 Speaker A
There’s this thing that happens in business journalism, um, uh, that doesn’t distinguish from business and stocks.
00:10 Speaker A
Yeah. And, you know, the value is what you get and the price is what you pay. But this the the really peculiar dynamics of the way that this company and its investment banks, its plenitude of of of investment banks are manipulating the share release. It’s being manipulated to jack the price up, and then the giving of so much stock to retail. When you have a CEO who is the most famous CEO in the world right now.
00:41 Speaker A
And so you have this sort of hype around this deal, some of it orchestrated, some of it that’s just in the air, that I think the trading of the around the price could be very separated from the fundamentals of the business.
00:58 Speaker B
Is there a world in which the 135 a share looks like the bargain of the millennium?
01:05 Speaker A
It is hard to imagine that that there the projections out into the future to get to today’s price are really optimistic. I mean, is SpaceX going to go great like it has so far or is it going to go like Grock and like XAI has so far, which is to say different directions, or like Twitter, right? Elon Musk comes in to run Twitter and runs it into the ground, sitting on all that debt.
01:41 Speaker A
such that they have to collapse it into XAI and they have to collapse XAI into SpaceX and they’ve got to uh put lipstick on that pig. You know, which which Elon Musk are we going to get? He certainly has tried in both cases. He doesn’t always succeed. I think he would admit to that. He asks tough questions in meetings and I ask tough questions of this business in our research report. But as an investor,
02:05 Speaker A
are you counting on all these things working? Are you counting on um Starship getting to 100 launches a year 18 months from now when they haven’t had a single launch and has been able to deploy satellites ever before. Um, I like the, I like their odds there. I think that they’re doing great things with Starship and they might actually get it done. Right now, they’re grounded by the FAA.
02:30 Speaker A
I think XI XAI is a real struggle. Um, to quote my friend Jim Chanos, the contracts with Anthropic and Google to use the XAI data centers have more easy outs than a kids’ T-ball game.
02:49 Speaker A
So I I I’m assigning a probability that that, you know, at least a 25% probability that one of those two contracts drops out in the next two years when their other compute becomes available. But right now, at $135 a share, you have to believe all of these things work fantastically, things that have never ever happened before. Data centers in space is not a business, it’s an idea. And if you pay $135 a share, you’re betting that the business exists and will exist, a thing that has never existed before. It’s a big bet.
