00:00We are seeing this share price come back down to earth. This was the most hotly anticipated IPO
00:05of the year so far. And we're seeing just yesterday that share price slumping some 16%
00:11in a single day. Now, why is this happening? This was so hotly anticipated. Debt has a lot to do
00:17with it because the company yesterday said that they are seeking to raise investment grade debt
00:22for the very first time. Bloomberg News has reported that they are seeking some $20 billion
00:26in debt. Now, this is an unusual move. This is early in the lifespan of a company to be seeking
00:31that sort of debt. Again, the company is not profitable yet. They have been burning through
00:36cash. And some of the language that they have used to talk to debt investors, let's take a look at
00:40that
00:41because it's very similar to what we saw in their IPO prospectus. It is very grandiose.
00:46This company is talking about how our mission is to build the systems and technologies necessary
00:51to make life multi-planetary. Now, that sounds all fine and well if you're trying to drum up
00:56excitement for equity investors. Debt is a very different instrument. Some of these investors
01:01could be with the company for up to 30 years. They get paid at maturity. They get that interest
01:06as well. Now, what we know about SpaceX, it has been given investment grade ratings from a lot of
01:11these agencies, from these major agencies. But there are questions here. There are bigger questions
01:16about the tech space right now. How much these companies, Apple, Amazon, are raising in debt
01:21markets. JP Morgan has estimated that those large hyperscalers have raised some $300 billion in debt
01:28since November. A lot there. And another big question here, why this debt question feeds back into that
01:34share price. Open AI and Anthropic. They are also thinking about going public later this year.
01:38They're keeping a very close eye on the equity performance of SpaceX.
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