00:00Joel Shulman is the Founder, Managing Director and CIO of ERShares.
00:04The firm's XOVR ETF had approximately $246 million in SpaceX exposure ahead of the IPO.
00:12Now, things have changed since.
00:14Yeah, we're up to about $370 million.
00:17Actually, SpaceX gave us about $130 million of profit coinciding with your numbers.
00:23$84 million of that was in June alone, which gave us a 5.3% return.
00:27It contributed about 75% of our performance for that month when the market was generally down, down as much
00:33as 2.7% for the ETF.
00:34Can we get to the back story here?
00:36Yeah.
00:36So you were able to include SpaceX in an ETF product when it was still a private company.
00:42How?
00:42Right.
00:42So we were the first ones to do this.
00:46We rebranded, relaunched, repositioned XOVR in August 2024.
00:51So we were the first ones to do this.
00:53We bought our first position, SpaceX, in December 2024.
00:57We bought in something called an SPV, a special purpose vehicle.
01:00Oh, the Bloomberg Tech audience knows about SPVs.
01:02We're going to get to it.
01:03Keep going.
01:03So we got into a position.
01:05We repositioned it later on into something called a zero-zero, no management fee, no carry.
01:11We increased our stakes several times.
01:13We actually increased it twice during the second quarter, 2026, which gave us about a 14% position going into
01:20the IPO.
01:21And one of the things we did is we had a shareholder protection plan, which prevented a big run-up
01:26of flows in the week preceding the IPO.
01:29You've probably talked about it before in your show.
01:31Many ETFs have had massive inflows preceding big events.
01:35We kept that money out, probably turned away more than a billion dollars in our estimates, maybe several billion dollars,
01:41to make sure we had a good wait for our shareholders going into the event.
01:46But the reason for talking about SpaceX today in part is NASDAQ 100 inclusion.
01:51That was accelerated.
01:53And we went through earlier in the show about the mechanics of that, right?
01:55If you're a fund manager in the world that tracks the queues or that index, you need to take some
01:59action to make sure SpaceX and its weighting on the index is represented in your fund.
02:04How did that impact you, if at all?
02:06Well, so we're seeing it today.
02:08The market, you know, the SpaceX is a little down today.
02:11A little, down 5-ish percent.
02:12Yeah, but we think, you know, long-term, we think it's a bullish sign.
02:15We've got to remember the NASDAQ has about $800 billion behind it, passive money.
02:21That represents, at a 1% weight, about $8 billion.
02:25We've got to remember the SpaceX has been trading about $19 billion per day.
02:30It's not all coming in today in terms of the $8 billion, but it's the start.
02:34And then we've got to remember that $400 billion, I'm sorry, $400 billion is accused, along $4 billion of that
02:40will be coming in.
02:41And so this is all coupled with the Russells, the MSCI's, and so forth, about $25 billion of passive money
02:48coming in.
02:49That's going to help boost the stock for a period of time.
02:51So I'm grateful to have you here in the studio with me today.
02:53There was a time, maybe just for a hot second, where you were kind of out there alone.
02:57Oh, yeah.
02:57I'm trying to work out how to describe this, but you were the only ETF for a period of time
03:02that had SpaceX.
03:03That's true.
03:04Right.
03:05Then everyone did.
03:07I've been trying to look at what's happened since.
03:09So SpaceX went public in June.
03:11Overall, I think the fund has seen outflows?
03:14A little bit.
03:15We've lost about $200 million.
03:17Some of the other funds that had SpaceX, one in particular that got in in late March, I think they're
03:24down 30% in terms of returns alone, and they lost more than half their funds.
03:29Another ETF lost three quarters.
03:32We've lost about $200 million.
03:34We're not taking it for granted.
03:36I mean, we're not a space-only ETF.
03:38We have the Entrepreneur 30 Total Return Index, which is a 21-year track record, and that has one of
03:45the strongest, if not the strongest.
03:47I'm looking at the holding.
03:47So SpaceX is up there, right?
03:49It's the top holding, 17%, 18%.
03:50And then NVIDIA.
03:51Then NVIDIA.
03:52And then we have other stocks like Astero Labs, which was very strong for us.
03:56It's up 400%.
03:57Yeah.
03:57And NAPLOV and other things as well.
03:59I appreciate the transparency on the flows and also the origin story.
04:02You know, we've covered a lot of some of the concern about SPVs.
04:05Right.
04:06What are you really buying into?
04:07And in the end, what did you really get?
04:09Now with SpaceX, the data shows it.
04:12Let's get to your thesis.
04:13Right.
04:13You know, you are bullish on SpaceX.
04:15Right.
04:16Which part of SpaceX?
04:17Well, I mean, as you know, there's a three-engine empire, right?
04:19You've got the launch where they dominate 90%, and even the competitors are using them now.
04:24So they've got 10,000 satellites in space.
04:27They dominate this market.
04:28They've got a clear moat in that area.
04:30Their costs have gone down from $54,000 down to about $2,000 per kilogram.
04:35We look at NASA, which over the last 30, 40 years has gone up from, you know, $54,000 up
04:40to $58,000.
04:41So they're the cost leader.
04:43Elon Musk is very much like a modern-day Rockefeller where he's very focused on costs.
04:48Then you've got Starlink.
04:50And you've got Starlink, which, you know, his leapfrog telecom, cash cow, clearly the crown jewel within the trifecta of
04:57the three-engine empire.
04:58They've got a lot of people may not realize they've got a five-pricing-tier model where they charge the
05:03lowest price for domestic, defense.
05:05And then they have maritime, and then they have aviation, which is the strongest piece.
05:13It's five times, 313 times more for aviation using the same satellite that they use for domestic.
05:19So when you have a five-pricing-tier model, that's really unique and we think going to be, you know,
05:25extraordinary.
05:26Then, of course, we've got the wild card, which is where you have the optionality on the data centers in
05:32the sky.
05:32We talked a lot about the NeoCloud business.
05:34Yeah.
05:35They played a pretty good short-term game with that.
05:37If they pull this off, you know, this justifies evaluation in them some.
05:42If they pull this off where they can actually get data centers in the sky and they can get energy
05:4724-7, you know, powering solar at five to ten times.
05:50Joel, just really quick, because we're going to hit a break pretty soon.
05:53Just reflect, where does this SpaceX IPO rank in your career in the markets?
05:57Well, for my career, it's number one, right?
05:59My career, it repositioned our fund, our thesis, and it put a spotlight on our VC lens where we get
06:06companies the same way the VCs select companies, publicly trade companies.
06:11We got into NVIDIA back in 2005.
06:13We've held it 21 years.
06:14We see SpaceX as a long-term hold, not unlike that.
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