Prof G Markets - SpaceX Just Filed to IPO — The Numbers Are Ugly

Episode Date: May 21, 2026

Ed Elson is joined by Patrick Boyle to break down SpaceX’s newly released IPO filing and what it reveals about the company’s financials. Then, Zed Francis joins the show to unpack the key takeaways from Nvidia’s latest earnings report. Finally, Ed shares his reaction to the news that the Trump family was granted immunity from IRS audits and investigations. Patrick Boyle is a professor at King's College London, former hedge fund manager, and host of one of the most popular finance YouTube channels. Zed Francis is the CIO & Co-Founder at Convexitas. Subscribe to the Prof G Markets Youtube Channel  Check out our latest Prof G Markets newsletter Follow Prof G Markets on Instagram Follow Ed on Instagram, X and Substack Follow Scott on Instagram Send us your questions or comments by emailing [e-mail] Learn more about your ad choices. Visit podcastchoices.com/adchoices

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For years, if you ran a media company, you obsessed about Google. Because Google could send a fire hose of traffic your way. But now things are changing fast. So last year, I told all of our teams, you need to plan your businesses around there being no search. And if you don't have a plan for that, you may not have a business. I think it was very effective. That's Roger Lynch, the CEO. CEO of Condé Nast, the home of fabled magazines like The New Yorker and Vogue.

And if you want to hear how Lynch is thinking about Google and AI companies and who's going to replace his most famous editors, good news. You can hear all of that on channels with Peter Kafka. That's out now everywhere. If money is evil, then that building is hell. Welcome to ProfiMarkets. I'm Ed Elson. It is May 21st. Let's check in on yesterday's Market Vitals. The major indices all climbed more than 1% after President Trump said talks with Tehran are in the final stages. Brent Crude declined, even though Trump also said, quote, we're going to do some things that are a little bit nasty if a deal wasn't made.

Treasury yields also stumbled. Tech rallied ahead of Nvidia's earnings. More on that later. And finally, speculation swirled all day in anticipation of IPO filings from SpaceX and OpenAI, we will get into that right now. SpaceX has officially filed to go public. In a prospectus filed with the SEC yesterday, SpaceX said it will list on the NASDAQ under ticker SPCX.

The company is looking to raise $80 billion or more, which would make it the largest IPO in history. The prospectors offers the first peak into SpaceX's financials before the company goes public on June 12th. So lots of numbers to discuss here. Today we're speaking with Patrick Boyle, professor at King's College London, former hedge fund manager and host of one of the most popular finance YouTube channels. Patrick, thank you so much for joining us again on the show to discuss again SpaceX, the filing for which literally came out about 15 minutes ago, 20 minutes ago. So we've had that amount of time to get up to speed on it. But there are are some interesting things here. I'll just start with some of the financial data that we learned.

$4.7 billion in revenue in Q1, $2,000, $4.3 billion in net losses in Q1. Revenue grew 15% from last year. But plenty of other things that we could talk about. Where would you like to start what strikes you? Yeah, I mean, you know, to be honest, it's a fairly interesting IPO document. I mean, I'm sure you saw the first 15 or 20 pages were photographs of rockets, which is a little bit unusual and somewhat reminiscent of the we work, you know, IPO document where the, you know, there were lots of photos in there. You know, other things that were interesting, the company has lost $37 billion since inception. There's lots of stuff. There's some new business stuff in there. There's you know, there's talk about point-to-point travel, you know, where people will be able to

travel from place to place on rockets rather than airplanes. There's talk of, I believe I saw in-orbit manufacturing or at least manufacturing on the moon, but I've noted down in-orbit. I'm not sure if that's correct. Asteroid mining is another business that they expect to make money from as well. Yeah, I mean, when we spoke with you on this topic, what, One of the things you pointed out is that the financials here are just a little bit concerning, especially if you're looking at a company that's going to go public at $2 trillion. That's at least what people are expecting close to $2 trillion. One thing that struck me is they are losing money, but they also included their adjusted EBITDA,

which they reported was over $1 billion in Q1, 2026. And I couldn't help but notice the fact that they, you know, in order to get to that number, you have to add back almost two and a half billion dollars in depreciation and amortization costs, which to your point is their whole business because they're building rockets. Yeah, because it's the cost of the rockets. You know, there's huge R&D to build the rockets. And then the depreciation, you know, they put all those Starlink satellites up there. They last about five years and then they fall out of the sky.

And so that is your depreciation. They have to constantly replace them. It's not, EBITDA is not an interesting number for a company like this. Like you want to look at basically, you know, is it profitable or is it on the path to profitability? It doesn't seem to be. There's other stuff in there as well. I don't know if you noticed that Elon Musk will get, I think, 85% of the voting shares. There's, you know, for, he doesn't like, as we know, a shareholder lawsuits.

And so that has to go to arbitration. So essentially, if you're buying, like this is very much an IPO for the Elon Musk fan. Like, you're not necessarily that worried about profitability. Right. You know, it's sort of, you know, it's what, it used to be sort of rockets. Now it's rockets, Twitter, AI in space, you know, space manufacturing, transportation by rockets and asteroid mining. Not all of these businesses are functioning at the moment. Even if you look at the, you know, the starship thing, the starship, they're talking about, what is it?

Sorry, I've got the numbers down here. Basically, they're talking about hourly launches of starships in order to get, I think, something like a million tons of stuff in. into space per year. At the moment, you know, I think the next starship test is tomorrow. It's never gone into orbit. It's never carried any cargo. I think it's going to carry some dummy SpaceX satellites tomorrow. But this is, you know, this is very much a vibes-based IPO.

Like it's for people who are excited about Elon Musk. It's not really for people who are going to scrub through the numbers and ask questions about profitability. Yeah, just on that point, some of the company statements that we saw at the top of the document, the mission of this company is to, quote, ensure species-level redundancy and that the light of consciousness will not be tied to a single planet. It's also to, quote, understand the true nature of the universe to ensure that humans don't have the same fate as dinosaurs. By the way, that phrase, the light of consciousness is mentioned 10 times in the filing, and A.S.

is mentioned over 1,200 times in the filing. Just looking at profitability again, they break out each of the businesses into space as a business, connectivity, which is like satellites and AI. Space lost $662 million in Q1. Connectivity turned a $1.1 billion profit, and it seems that actually the satellite business is pretty good. AI lost $2.5 billion, and that really struck me that maybe this AI thing is perhaps the problem.

And I think that's per quarter, isn't it, that loss? That's the quarterly number. Yeah. What do you make of those numbers? So, yeah, you're looking at, and I think that was growing as well, like the loss from AI is growing. And the whole story of SpaceX, it's no longer about spaceflight. It's kind of about this data centers in space idea. You know, there are a lot of people who've done research.

It's not clear why it would be cheaper to put a data center in space than somewhere on the earth. It might be cheaper to put one on the bottom of the sea. You know, it's not clear why this is necessary. But I think it's a mistake to ask too many questions about this. You just have to go with your feelings, you know. So this, I mean, what do we think this will mean for this IPO? I mean, they're looking to raise $80 billion. Biggest IPO in the history of business.

But it sounds like you are not really convinced at all. I struggle to be convinced. I like the idea of space travel. I'm excited by sci-fi stories in general. But, I mean, looking at these numbers, personally, this seems insane. What do you think this means for the IPO? Do you think that this stock will actually perform? Wow. You know, firstly, I think they're kind of rushing out largely because it's burning so much money, right? Like 37 billion in losses since inception. And, you know, the VCs and whatever, only want to keep putting more money in for so long. And there's a very hot market right now. You know, S&P is near highs. And people are excited by Elon Musk stuff. They're also excited about AI. And I think, you know, Elon for years, says,

that he would never take SpaceX public until he had reached Mars, I think, until there was like a colony on Mars. So we're a little bit early for that. I think the real reason is just VC funding is kind of drying up for this sort of stuff. They've, you know, this is worth a lot and they want their money back.

On top of that, you've got big IPOs coming from open AI and coming from Anthropic. And even, you know, there's an argument, And, you know, they basically want to get out first because the question is, will there be appetite, you know, if investors have to liquidate something in order to buy these new things? At what point do they not necessarily want to buy the next AI thing coming out? So I think to a certain extent, this is a race to get this stuff out before the others. For the people listening who are fans of SpaceX and who plan to maybe purchase this IPO or believe in the company, I mean, what is your honest bull case for this company? Like, in what world, what would it take for this company to make sense and for it to be a profitable and sustainable business that is worth investing in?

Well, a much lower price to start with, but that's not what's going to happen. right? Because of course, this is the whole thing with investments. Like it's, you're buying a thing, and the question is how much are you paying for the thing? Yeah. And this is the most out there valuation of any company you can think of. Like, it's way beyond the valuation of Nvidia. And Nvidia is hugely profitable with massive margins. SpaceX just isn't. It's, you know, it's a money furnace, right, especially with all this, you know, X-AI, the AI company, you know, I think he paid $250 billion for it, like SpaceX bought that from Elon Musk. Then within a few weeks, he announced that the tech stack within XAI was not working.

Basically, it wasn't very good, and it had to be rebuilt from the ground up. And he said, well, that happened with Tesla as well. And it's like, yeah, but you just got people to pay $250 billion for this, right? They bought it from you. And so, you know, this is, you know, the thing is, would I bet on the price falling? I mean, in the long term, yes, just because I think it's, you know, this sort of gravity can only be overcome for so long. Yeah. But, you know, there's the funny thing, as last time we spoke, we spoke about the NASDAQ inclusion.

So 15 days after the IPO, passive investors, whether they like it or not, will become shareholders. And that is an incentive even to get in the IPO because, you know, 15 days later, there's sort of some new bag holders to take it off your hands. In the long run, like any company, the value of any company is the cash flows. Like you're buying cash flows, you're buying the profits of a company. You know, is there a version of the world where it could become profitable? Yeah. But it doesn't look like an amazing business at the moment. Like, it's a wonderful, it's a cool science experiment,

but that doesn't mean that, you know, it's not obvious how you convert all of this stuff into dollars and cents. You mentioned earlier the other company that is set to go public, which we actually just learned, is going to go public. As of yesterday, that is OpenAI. There were questions over whether this was going to happen. Even the CFO was saying that we, needed more time, that the company needed more time before it goes public. But apparently,

now that the Elon trial is out of the way, they are going to go public just before we let you go. I'd love to just get your top line thoughts on OpenAI as a business, your expectations for this IPO. And then hopefully we can have a longer conversation about it at some point, too. Yeah, I mean, you know, once again, all of this AI stuff, it's really early in this business and it's really hard to know who the winners and losers will be. You know, so the question with Open AI, with Anthropic, with any of these, is sort of are they the sort of Google of search, you know, or are you investing in the Yahoo or the AOL or whatever, you know, because being first doesn't necessarily make you the big winner. You know, it's not something that I'm

excited about just because it's kind of a roll of the dice and a hope and pray kind of thing. you know, also it's not obvious, even if AI is a huge productivity booster, it's reasonable to think it could boost the productivity of all the people using it, but that doesn't mean they get to charge that because there's sort of 10 models out there. They're all reasonably equivalent to each other. And so the question is, will AI be a winner-take-all model like the way Internet search was, or will we have kind of 10, you know, it's a bit like Uber, you know, where there's sort of, you know, in every part of the world there's Uber and then there's a few other ones. And the problem with if there's always a few other ones, you never really get to crank up your prices.

And so people benefit from the affordable taxi rides, which is great, but the companies themselves never get that profitable. So with these huge valuations, the assumption is that one of these things is going to win the whole. whole market and is going to be able to charge an awful lot of money for their services in the future. Very exciting time in the IPO markets. I mean, it's just incredible what we're going to see this year. It is. For years, people have been saying, you know, there's no companies going public. In fact, they were all going private, right? And also, people said, you know, all these companies, they're hoarding cash, they're not investing. Now we've got all of, you know, big tech are spending a fortune on building data centers and all of this stuff.

And we've got all of these companies going public. So, you know, people want it. But the scale of them is sort of beyond anything we've seen before. So people are getting what they want, which is the opportunity to invest in this stuff. And these companies investing in stuff rather than hoarding cash. Yeah, big win for the bankers that are underwriting these companies too. Patrick Boyle is a professor at King's College, London, and a former hedge fund manager, and he is the host of one of the most popular finance YouTube channels.

Patrick, thank you so much for joining us again. Appreciate it. Yeah, thank you for having me on. After the break, Nvidia reports earnings. And by the way, we're heading out on tour next week. So for more info and to get tickets to a show near you, head to ProftymarketsTor.com. Support for the show comes from Framer. First impressions matter. And if you're a business owner, then having a messy website is basically the same

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Willow Bay. I said, Bob, are you interested in doing this? And he said, absolutely. But I was definitely the driving force, I think, in the conviction about Angel City. Check out Pretty Tough. New episodes on Wednesdays. You can watch it on YouTube or listen in your favorite podcast app. Hi, I'm Maria Sharpova, host of the Pretty Tough podcast.

Each episode, I sit down with high-achieving women to discuss the pursuit of excellence without apology. This week on the show, comedian and best-selling author Chelsea Handler gives her tips on independence and 80s. and gracefully. I would argue that 50, now that I am 50 and I understand life more than I did when I was 30 or 40, is that you get so much more wisdom and you get so much more experience that you actually feel like you're beginning again. Check out pretty tough. New episodes on Wednesdays. You can watch it on YouTube or listen in your favorite podcast app. We're back with ProfiDi Markets. Nvidia posted earnings last night and the entire economy was watching. The chip company had beaten earnings expectations for 18 of the previous 20 quarters, and this time was no different.

Total revenues came in at over $81 billion, up 85% from the same period last year, and beating analyst expectations. InVDivya also authorized an $80 billion stock buyback and a massive dividend hike, signaling a confident outlook for quarters ahead. Still, investors weren't entirely impressed. the stock Whipsword after ours. So here to give us a breakdown on Nvidia's earnings. We are speaking with Zed Francis, CIO, and co-founder at Convexitas.

Zed, thanks so much for joining us. Just some of the numbers here, $81 billion in revenue, up 85% year-of-a-year. The data center revenues up 92% year-over-year. These numbers are just astounding. Give us your initial read on these Nvidia earnings. Yeah, I mean, ultimately, Nvidia has turned into an established veteran company in comparison to what it was a handful of years ago.

So, as you alluded to, the beaten raise is basically what's baked in the cake. That's what everybody's expecting at this point because that's what they've been doing in the past. And we see this stock moving, but kind of benign, ultimately. Like, I'm a volatility guy at the end of the day, and the options market was pricing in a 5.5% move in Nvidia on these earnings. and the entire range of after hours. We're obviously well inside of that. So I think we're kind of the point

where in Vindia is the new Apple. It's just a boring event, even though it used to be the main show for the last handful of years. Right. Yeah. In that sense, I mean, the fact that they are authorizing $80 billion in new buybacks,

they're raising the dividend from one cent to $0.25 per share. I kind of see that, and I love that. It's like they're owning the fact that they are an established profitable company. And it does seem quite Apple-like in that regard. Did that stand out to you the fact that they are returning that money to the shareholders? Yeah, I mean, it's a very interesting sector, right?

Because ultimately semiconductors are viewed as hyper-cyclical. But Nvidia has kind of disrupted that concept over the last handful of years, right? And I bring up Apple because I think it's a reasonable parallel. like Apple started as hardware, then started building their network and then started building services. So even though hardware is the main driver of Apple's business in terms of top and bottom line, there's more confidence in reoccurring revenue from that business than a traditional cyclical hardware company. And Nvidia is trying to follow that game plan and has recently been successful over the last couple of years to establish that concept with the market as a whole. And the reason they're kind of able to do that is they're the highest value add in their space and a decent amount of why folks are purchasing, you know, their chips versus somebody else outside of them, you know, having this spread in comparison of the rest of the market in terms of the value ad is also software.

So they've been trying to make that pivot to have the market view them as more reoccurring revenue business rather than a pure cyclical, which traditionally the semiconductor space has been. Yeah. what is the argument on that front? Because, I mean, on the one hand, they're just printing money right now, but so are many of sort of the memory stocks, sort of the sand disks as an example. And the concern there is, you know, there's a gold rush for data centers right now. Everyone's trying to build a data center. Once they're built, though, maybe that's it. At which point, what is Nvidia going to sell? Is that a concern for the company? Is that something that they are addressing and talking about.

And so you bring up a perfect point. It's very much a barbell industry within the same exact sector. So you have Nvidia trying to become less cyclical. They're definitely the least cyclical of the group. And the memory guys on the other side are the most cyclical. So what does that mean in terms of valuation and how you think about the business? Well, and Nvidia has more forecastable revenues in the out years beyond, you know, years one, two, three.

And so because of that, years ago, they were the first mover in terms of valuation because people being confidence in the out years, you know, the years 3 plus and their ability to produce those revenues. And thus, you get a higher valuation. If folks believe that a decent amount of your ability to produce those earnings is actually reoccurring, then you're nationally going to get a higher valuation, which is exactly what happened with Apple again from kind of 2013. through live. It went from a teens P-E stock to a mid-20s plus simply because the confidence

of those reoccurring revenues were grown, and Nvidia is trying to follow that path. Opposite side, those memory folks, they have a click, right? It is a purely commoditized business where right now they're on the right side of the supply demand dynamic, where they're raising prices dramatically, expanding those margins. But the market's belief is there is a hard cliff where eventually they will go back, you know, to where they were before. And that's why when you look at a, you know, a micron, their forward P is like a 12-ish. But ultimately, that's because, well, we have confidence in the next 18, maybe 24 months of earnings. But after that, very, very little confidence. So it's all about discounting what we know right in front of us versus that longer term

kind of DCF valuation of something with reoccurring revenues. What do you make of the Nvidia evaluation at this point. I don't have the multiples in front of me, but the stock's training at around $220 a share. It's up 18% year-to-date. It's up 66% in the past year. How are you feeling about the valuation at this point? Yeah, I mean, it's a foreign valuation in mid-20s is about in line with the S&P, technically a little lighter than the market as a whole, so it still has a little bit of that cyclicality priced into it. But I would say it's in the reasonable realm. You know, it's a largest company in the world. It's tough to grow exponentially, even though they continue to do so in the short term when you're this large, where the memory folks are on the opposite.

It's the expectation of that massive decline in earnings has successfully been pushed out over the last six, seven weeks. And that's why we've seen massive moves in those specific stocks. But they're always going to be hypercyclical where the earnings that you're going to hopefully, you know, earn as a shareholder are right in front of you rather than over the next, you know, a couple of decades.

Yeah. Final thing that is kind of interesting. No shipments of chips to China this quarter from Nvidia. They shipped four and a half billion dollars in the year before. I mean, this in context with Jensen Huang jumping on the plane with President Trump, going to China. I believe that was last week. I think that's right. Do we learn anything on the

China front? Is China going to be a business for Nvidia? Is it not? Where are we on this? Well, I think we're a little in between whether or not China's actually receiving the end product via different routes rather than directly that might still be happening on the side. But that is a potential growth engine, right? If we actually get some more level-headed relationship, relationships with China that may reopen that market directly for them. But I wouldn't be surprised if they're getting a decent amount of that revenue through other sources. Zed Francis is the CIO and co-founder of Convexitas Zed. Thank you so much for breaking down these Nvidia earnings.

We appreciate your time. Thanks for having me. More news in the world of financial corruption. Trump and his family have been. granted forever immunity from investigations and audits by the IRS. This comes after Trump withdrew his $10 billion lawsuit against the IRS for allegedly disclosing tax information without information. Now, per a pledge from the Department of Justice, the U.S. government will, quote, be forever barred and precluded from prosecuting or pursuing tax claims against Trump or his family. In the words of the DOJ,

Trump has been forever discharged from any tax crimes. Now, at a certain point, there's just not much commentary I can even provide here. I mean, I can tell you that this is corrupt. I can tell you that this is what dictators do. I can tell you that this appears to be illegal, and if it isn't, then it should be. But you already know all of that. I mean, there's nothing more that I can reveal by analyzing what the headlines are already telling us, because the headlines speak for itself. Trump has taken control of our government. He defunded the IRS. He defunded the DOJ. He fired the SEC director who tried to investigate his insider trading.

He personally canceled 160 different white-collar crime investigations in one year. Those white-collar crime prosecutions have hit a record low this year. and now he has coerced the DOJ into banning the IRS from investigating or auditing his tax claims for the rest of time, forever was their term. So do I really need to argue why that's bad? Do I need to present my case on why that shouldn't be happening? I don't really think so. I think either you hear these facts and you are. acknowledge them, or you hear these facts and you ignore them, or you say they're not a big deal,

or you just deny that they're even true. So the only thing that I can really do here in yet another corruption scandal, the only thing that is even remotely valuable is to just tell you what happened, to tell you the headlines, and that's what I'm doing. I'm telling you what happened. And in the context of markets, I can explain why this is bad. It erodes faith in the system of markets. It creates this belief that for a certain set of people, the rules of markets and regulations do not apply. And in this case, that is true. And it also just makes Americans assume, correctly, by the way, that the system is rigged. But I hesitate to even make that argument because I just don't see how you could conclude that this kind of corruption is anything. but bad for everyone. And so I end this episode to tell you, I have nothing to add here. This is just another day

of unprecedented corruption in the Trump administration, the likes of which we have seen over and over and over again. You either acknowledge what is happening or you don't acknowledge it. But I am not going to be the one to make you care.

Okay. That's it for today. This episode was produced by Claire Miller and Alison Weiss, edited by Joel Patterson and engineered by Benjamin Spencer. Our video editor is Brad Williams. Our research team is Dan Shillan, Isabella Kinsel, Chris O'Donohue, and Mia Silverio. And our social producer is Jake McPherson. Thank you for listening to Profty Markets from Profg Media. If you liked what you heard, give us a follow. I'm Ed Elson. Tune in tomorrow for a conversation about taxes with Ray Madoff.