00:00 Speaker A
Joining me now Kevin Thompson, founder and CEO of 9i Capital for this week’s ETF Corner brought to you by Capital Group. Kevin, good to see you again.
00:10 Speaker A
So, everybody wants to know, like, how can I get on these things? Should I get in on these things? Um, and, you know, I think that folks in your position are are are saying like, slow your roll a little bit, maybe. I don’t know.
00:23 Speaker A
Well, are you getting a lot of client incoming that they that they want to get in on these IPOs?
00:27 Kevin Thompson
That’s good to see you.
00:30 Kevin Thompson
Not necessarily, but what I’m trying to do is be in front of them to help them understand. You know, there’s a lot of backstory to to this stuff because again,
00:37 Kevin Thompson
the circular financing that you mentioned, I mean, you have Google owning 14% of Anthropic, Google owning 6% of SpaceX. I mean, how does all of this work, especially when you have a competing AI that’s competing like Gemini that’s competing directly against Anthropic.
00:54 Kevin Thompson
So, hey, all these companies are putting money into each other, and then how do valuations come to to a head? Because again, 1.7 trillion into a marketplace when you’re losing 4 billion a year, it’s just mindboggling.
01:06 Kevin Thompson
And what people are not talking about, which I guess a lot of people are saying now, are the pundits saying the exit strategies for PE and venture. When you’ve had this company for over a decade, yeah, you’re looking for an exit and this and they’re about to get it right now, especially in the Nasdaq.
01:18 Speaker A
I mean, on the flip side, you know, you do have the investors that have to buy, you know, index funds that have to buy, for example, on the Nasdaq side, as we just learned, not on the S&P side. So that’s a support. But would you tell investors, okay, you know, maybe give it a month, like is there a certain, are there certain milestones or a time period that you’re looking for where then you’d come back and reassess?
01:40 Kevin Thompson
I don’t like it because again, the tiered lockups that they’re come the accelerated tiered lockups, the 70, 90, 120 days, you don’t really see that much. And then the accelerated listings, you don’t see that much. S&P did a good job protecting the retail investor, which again, I applaud them for, but I just don’t understand why this has to be floated.
01:58 Kevin Thompson
And again, they’re only floating 4% of the of the company. But again, 70 days later they’ll float more, 90 days later they’ll float more, and what happens, you have supply coming to the market that the indexes have to buy.
2:09 Kevin Thompson
So that’s natural buying coming to the market and that’s onto the retail investor. And then the the real winners here, we can all say it, is venture and PE.
2:16 Speaker A
Yeah. Uh Kevin, um, you know, obviously we don’t have the full S1s yet for something like an Anthropic but or Open AI, but do you do you would you approach them in the same way? How are you thinking about those?
2:28 Kevin Thompson
I I I think, um, especially when I see the revenues coming in for Anthropic, I mean, well, for SpaceX, because Anthropic is paying them $1.25 billion a month for compute. I mean, these companies, like I said, circular financing, they’re paying for compute, they’re paying each other for for services, and that’s where a lot of their revenues is coming from.
2:45 Kevin Thompson
So when you’re telling me you’re getting 1.25 billion a month for for for SpaceX from Anthropic, and of course, you have Google invested in both of these companies because again, you don’t know what the winner is going to be. So you’re hedging your bet. I just think that
2:57 Kevin Thompson
at the end of the day, I hope it it it works out, but what happens a lot of times is that the retail investor is holding the bag because you start putting these large market weight, these large market caps inside of these indexes and then again, once they start going in the other direction, like again, Tesla has underperformed the the market since its IPO.
3:09 Kevin Thompson
I mean, it’s it’s just I think it’s a it’s a it’s a win for the consumer because the S&P’s doing the job that the Nasdaq didn’t. So, uh I just hope that there’s more regula regulatory bodies that come to the the front the forefront that uh that can get ahead of this.
