FULL TRANSCRIPT
Slava Rubin (00:00)
Welcome to today's conversation. Very excited for this one. My name is Slava Rubin. I'm one of the founders here at Vincent where we discuss all types of alternative investments. We have with us Jan-Erik, one of the founders at Sacra Jan-Erik, say hi.
Hey everybody, great to be here. Thank you Slava for having me again. Absolutely. We have Christine Healey from Healey Pre-IPO. Welcome to another conversation. Hi, thanks Slava. Absolutely. lots of people have asked for this one, which is, what are my opportunities and how do I navigate Elon's empire? So before we dive in, ⁓ let's just get a word from our compliance department, which is, this presentation is intended to be educational only.
Nothing in this presentation should be construed as an offer to sell securities or a solicitation of an offer to buy securities. This presentation does not endorse any particular security or company. This presentation does not imply any affiliation partnership or other relationship with any companies or issuers mentioned. All investments involve risk and the possibility of loss, including loss of principle. And neither past performance nor forward looking information is a guarantee of future results. All right, let's move forward.
So we got a full agenda today. So first we're going to remind everybody as to how Elon became Elon. You might take for granted that he is ⁓ the richest man in the world or one of them, depending on the day and market caps, et cetera. But how did this all happen and what companies are we talking about? And then what are the investable opportunities today? If you want to invest into something Elon, what are your choices today? And then we have some proprietary analysis in terms of competition and benchmarks as to how each of these opportunities size up.
versus other competitors in the space or other investment opportunities. We then discuss some of the Musk ecosystem where we give you our point of view as to how Elon companies are Elon companies. And of course, there's Q &A. We have Q &A here as the final dot. It does not mean that you have to wait. ⁓ You can ask questions at any time. And at the end, we'll even discuss the opportunities as to what does the market look like today to actually invest into the specific companies that we mentioned.
With that said, the way we will ask questions is you just go down into the Q &A, ask whenever you want. I'll try to monitor that and then incorporate it when it's the right time. With that said, let's dive into Elon's empire. So first, the timeline. ⁓ So this is a beautiful slide that obviously starts all the way back from South Africa and then gets ⁓ into Doge and today. So Jan-Erik, walk us through the spaghetti here.
Yeah, so I think what's interesting about the Elon story is that there's kind of these two or three big chapters and chapter one kind of looks like your you know, standard Silicon Valley success story, you know, move to America, you know, start up a software company, you know, sort of before the dot com boom, sell it somewhat, you know, good timing selling it in 1999 zip to rolling over the
the profits of that into PayPal and then selling PayPal. Okay, so at this stage, Elon is like a successful entrepreneur, two exits under his belt. But 2002 to 2008 is kind of this really critical window where he sort of takes a divergent path, which is basically shoveling all of the proceeds from PayPal into these two capital intensive, very long cycle businesses.
in SpaceX and then later Tesla, you know, at a time when ⁓ people thought doing, you know, electric vehicles was insane and also space. And he decided to do both at the same time. And that was sort of the, you know, critical window, you know, as those started to ⁓ succeed and take off, we now have entered this sort of third period in Musk's career within the last sort of ⁓ eight or 10 years where he has gone on a tear.
you know, co-found the OpenAI, co-founding Neuralink, the Boring Company, purchasing X. And we've sort of seen this, ⁓ yeah, explosion of activity ⁓ with those original two businesses sort of becoming the biggest players in his portfolio, but now having many others as well. Yeah, it's pretty wild. I mean, you could think of him just today as this guy who has quote unquote SpaceX and, you know, Tesla for, if you don't really like think any closer sort of thing, but if you go back, you have
Zip2, PayPal, SpaceX, Tesla, SolarCity, OpenAI, Neuralink, the Boring Company. I think it's like nine or 10 companies. It's like pretty fascinating to say the least. All right, that's great context. Let's move on to what that means for us today. So what are the investable opportunities today as to where I, as an investor, listening on this call, that if I wanted to, not that it's saying that's easy to do, but if I even wanted to invest,
which companies can I try to invest into? Yeah, definitely the easiest and kind of most ⁓ common Elon investment would be in Tesla, which is basically a hundred billion in revenue company. ⁓ At this point, growing. It's a mature company. It's transitioning from that early growth story to really this, to this large business in the automotive industry.
And that's the easiest one to get into, one that a lot of people do invest in. The stock has been kind of, it's been a little bit erratic, but it's been up significantly over the last several years. And despite a little recent feuding, sending the stock price down, it's back up again. ⁓ SpaceX is kind of the biggest private one, ⁓ 14 billion in revenue, growing really fast and has a very ⁓ dominant position in space, tougher to get into.
And then you have kind of three more nascent ones. ⁓ XAI ⁓ is the sort of foundation model lab. You have Neuralink and The Boring Company. ⁓ XAI is at about 100 million as of the end of last year in revenue. Neuralink and Boring are more in the sub 50, you know, between zero and 50 range. So those are a little more of the nascent opportunities. Right. So just to double click on that, if you look at some of the comparisons.
⁓ If you look at revenue, like you just mentioned, two of the companies, one is public, one is private, are quite large, know, $100 billion, $14 billion. And the other ones are relatively, obviously, it's all about comparison, but relatively small, where you have Boring Company and Neuralink, which is minimal revenue in comparison, and XAI, which is obviously the combination of X and the AI company.
looking to try to navigate that, still pretty small revenues in comparison. It's also interesting to look at the revenue multiples, right? If you look at the revenue multiples, you're looking at Tesla, it's actually interesting that it's about 12X. That's actually fascinating. When you then look at the other companies that are smaller in the hundreds, where Boring Company, you know, at 140 almost looks cheap compared to XAI, right? Which is kind of a crazy concept. Obviously SpaceX,
much closer to Tesla at 25X, which, hey, for my seat over here, actually doesn't look that expensive. So yeah, this is a really good perspective in terms of comparisons. So just for the viewer, the listener, you can understand kind of the comparison of the types of companies we're talking about. Can you just give me like the 20 second snapshot as to what each of these companies does so we're all on the same page?
Yeah, so Tesla is fundamentally kind of a battery and car company where they're ⁓ building electric cars, different models of electric cars, but also, you know, the core business ⁓ is kind of the battery inside of it. So advancing that battery technology to get to get longer running cars. ⁓ SpaceX is basically building a reusable, ⁓ reusable space shuttle technology to make getting into space, getting to Mars. ⁓
and beyond much cheaper and more efficient and reliable. And they sell a lot into NASA ⁓ and ⁓ they do some private projects now as well. XAI is basically, know, Elon invested in OpenAI, co-founded OpenAI, broke with OpenAI and started his own lab to compete with them and then purchased X, formerly known as Twitter, ⁓ to sort of fuel the data training side of it.
And then Neuralink is a kind of futuristic sci-fi-esque sort of concept company where you implant a chip into a person's brain who maybe is paralyzed, ⁓ have had a stroke or is a paraplegic and can't sort of physically interact with the world but can use this chip to manipulate ⁓ objects in real space. And then The Boring Company ⁓ is ⁓ boring tunnels into the ground
underneath metropolitan areas to create a sort of super fast form of transport inside cities. Amazing. Let's move on then to the next section. I mean, just as a reminder, anybody who has any questions, feel free to put that into the Q &A. So here's an evaluation of the competition and some benchmarks to look at. So let's start with the first one, Jan-Erik, which is the revenue versus the valuation multiple. We kind of just mentioned this from the previous slide, but this is a visual illustration.
You wanna walk us through this? Yeah, so you alluded to this before, obviously this graph. if you look at the top, you can sort of see where the highest revenue multiples are right now that is by far and away XAI, which you've seen Anthropic and OpenAI. OpenAI just hit 10 billion in ARR, Anthropic just hit 3 billion. And these companies were at zero.
a few years ago. So there's a very clear story for investors, what can happen if Elon can succeed in AI the way that he succeeded in space travel ⁓ and electric cars. And so a lot of that potential is what's being priced into the revenue multiple. Very similar with Neuralink and The Boring Company, although they command lower multiples because medical devices and urban infrastructure transport are not as hot as AI.
⁓ That, you know, I think there's a large part of that multiple that's a bet on Elon and his ability that's been proven to, you know, solve extremely hard technical problems. And, you know, in such a way that generates ⁓ monopoly cash flows in SpaceX's case. And then you have SpaceX and Tesla, which, you as we've said, they're further along about 15 billion and 100 billion in revenue. They're being valued more similar to.
⁓ you know, their industry peers, still higher, but more mature businesses. Well, this is only a comparison of five companies, obviously the Elon five. ⁓ but a very simple interpretation here is that, you know, as you said, the growth is really expected to come the most from, you know, XAI. And from this perspective, it almost seems
like SpaceX and Tesla, again, just in a comparison of five companies, here it looks kind of cheap.
Yeah, I agree. agree. ⁓ And yeah, a lot of that is just being at a completely different revenue scale, lower growth rate. ⁓ But as we'll see, they are still priced at a premium to ⁓ sort of conventional players in those spaces. Perfect segue. Let's go to the next slide.
So here, we're trying to take you away from just thinking only inside of an index of Elon prices. How does it actually compare of a Musk company versus other industry peers, which obviously is an interesting take. Yonar, take it away.
Yeah, you know, across the board, Elon's companies trade roughly in a, you know, two to 25 X premium against their most direct industry peers. And, you know, part of this is, you know, the Elon effect, but part of it is also just kind of pricing in, you know, pricing in his companies are often very vertically integrated.
You know, we've seen a lot of manufacturing innovations come out of SpaceX, out of Tesla. ⁓ We also see a fair amount of sort of platform effects or empire effects where companies benefit from being in the Musk ecosystem and from the presence of other companies that are in the Musk ecosystem. ⁓ So, you know, I think that the premium gap has a few different reasons. It's definitely much wider in ⁓ these emerging industries like AI and, you know, brain interfaces.
I think part of it is, you know, I think the rewards for winning in that, in those spaces are so high, like no one else is really doing what Neuralink is doing. And so if they, you know, continue ⁓ a pace as an Elon company, ⁓ you know, the sort of standard trajectory that people have come to expect, then they could be sort of really huge winners. ⁓ Whereas then, you know, Tesla and SpaceX value a little bit more on, you know, current cash flows, the way that their comps are.
Yeah, mean, the interesting, the number one thing that pops for me here is that what I thought was the quote unquote the most expensive from the previous slide was the XAI. All of a sudden in comparison to its peers, OpenAI, Anthropic, et cetera, it's still expensive, but not as high of a premium as some of those other companies. Cause here you're showing that the AI premium is about 16 to 25 X, which is a lot, especially when you're comparing it to Tesla, which is much lower, two to 12 X.
but not even close to the premiums that the Boring Company or Noralink is really asking for compared to its peers.
Definitely. And part of that, we'll talk about sort of toward the end, is also about supply. And I think stock with Neuralink and The Boring Company has been tougher to come by. ⁓ There's less stock to go around, less employees, less liquidity. And so it's a little bit more ⁓ priced at a slight premium because of that as well. ⁓ But yeah, I think those are two industries. where the comps that we were able to get, the closest comps, they don't ⁓
as closely as say OpenAI to XAI. know, where OpenAI, XAI, Anthropic are all three very similar businesses. know, Neuralink and The Boring Company are doing quite unique things in their industry. You know, building human computer brain interfaces is not something that every medical device company is doing. So yeah, they're a little bit out there on the risk and sort of innovation scale. Yeah, the other interesting takeaway here is now that we've seen the Musk versus Musk companies,
and now the Musk versus industry peer companies. Tesla is still expensive, but kind of the cheapest, which is a bit fascinating given the fact that it's public, because you can think about it both ways. Does it go in public make it more expensive because more people can now pile into it? Right. Or does it make it cheaper because now it's efficient and there's not a supply demand issue. So it's interesting. I don't know the reasons, but it's interesting that here it's just showing itself as, you know, not as expensive as some of the others.
All right, next slide.
So talk to us, Jan-Erik, what are we seeing here in terms of the market premiums? And of course, these prices are not very- these are sort of rough price estimates, but the premiums are more or less ⁓ directionally, take it as a directional ⁓ number. what we're seeing, and just for context, the site of the bar graph here is sort of the degree of premium that you can
expect right now if you're buying XAI stock on the secondary market versus its last primary round valuation. So, you know, this might not be shocking based on the last slide, but the highest premium right now is a 91 % premium for XAI on its last fundraising round. And then you have sort of down in the 15 % premium range, have SpaceX, Neuralink, and The Boring Company. So, you know,
Part of what I interpret when I see this graph is, you know, well, a lot of companies do trade at a premium to their last primary round, especially if they're growing or in a sector that's growing, or, you know, there's some kind of excitement about them. And with SpaceX, Neuralink and Boring Company, there's always excitement around these companies. ⁓ You know, if it's Neuralink or Boring Company, it's because of stuff that they're showing off, SpaceX, it's stuff that they're sort of accomplishing. ⁓ XAI has a very high premium.
⁓ I think you see the velocity of fundraising in AI right now and the velocity of the markups that are happening makes a lot of sense because people are anticipating that XAI will be much more expensive in three months, six months, nine months, the way that Anthropic and OpenAI have been raising money. So it makes sense to me that there's a much higher premium there.
Great, and we have our resident expert, Christine, who can help navigate brokering some of these deals. We're going talk to her in just a second. But we do have a couple of questions if we go back two slides, which is, Jan-Erik, why are you not comping, well, sorry, one slide, the one against the peers. ⁓ Thank you. Jan-Erik, why are you not comping Neuralink against Synchron or Precision Neurosciences?
⁓ see. Neurosciences. think I'm trying to remember if we talked about them in our previous, ⁓ I mean, generally I looked for public companies so that we would have kind of, ⁓ pumps that are totally verified. cause a lot of these companies, it's hard to get revenue data for. ⁓ so I looked for sort of public, medical device companies that are doing human trials, ⁓ with, with, with human devices. So, ⁓ yeah, I to private ones.
And then one more similar question ⁓ on SpaceX. How does it compare against Blue Origin and how accessible is Blue Origin stock? So let's break that up into two questions. First one for Jan-Erik. Do you know how it compares against Blue Origin?
Yeah, so Blue Origin, people who don't know is Jeff Bezos' space company. ⁓ And Blue Origin started after SpaceX and they have been sort of slower ⁓ to hit milestones versus SpaceX. They are ⁓ probably the number two player in kind of American private space flight, ⁓ but that's a pretty distant number two ⁓ behind SpaceX. ⁓
I'm not gonna, you I don't have the exact timeline of all the milestones, but that's how I would think about them as sort of a distant number two. And then Christine, how available is Blue Origin stock? Blue Origin is basically not available or not very available at all in a nutshell. Both are difficult companies to access in some ways, but Blue Origin is not one I see verifiably available often at all. I would say,
almost never cross that off your list in terms of availability. Got it. ⁓ I appreciate the questions to Jan-Erik. See, you've tried to put out some proprietary analysis and then you get hammered for why it's not good enough, which means it's good. I like it. I like it. Let's move on ⁓ to the next slides. Next slide. OK, great. So now we're going to go into the Musk ecosystem. So first slide, ⁓ Jan-Erik.
Yeah, so I think part of what we're talking about with premiums is why people find Elon Musk companies valuable, interesting to invest into. And one of the key themes across his businesses is vertical integration. So this sort of flywheel on the right is kind of an illustration of this with SpaceX where ⁓ it was observed that building spacecraft is far more expensive than it needed to be. And so what SpaceX did and what a lot of defense tech companies are sort of copying now as a playbook is use ⁓
as many off the shelf parts as you possibly can and then do as much vertical integration as you possibly can in order to sort of collapse ⁓ what it costs to manufacture something and then reinvest those savings into R &D and continue trying to make things cheaper and cheaper. ⁓ So I think that's really a key thing. And then also kind of each company becoming a platform for other businesses. SpaceX ⁓ made it possible to go into space very cheaply using this playbook.
And then they were able to launch this satellite business Starlink, which has become really the revenue generating core ⁓ of the business. Yeah, it seems like that's very typical of Musk. And my opinion is why some of the Tesla money is still ⁓ flowing in is, people are thinking full, you know, autonomous driving and potential subscriptions there and then potentially the robots.
that are going to come from Tesla after that. ⁓ Or like you mentioned on SpaceX, really the Starlink capability. And I imagine for each of these businesses, he has kind of let's call it the second layer business of the platform, which is part of, you got to give Elon credit there in terms of the vision.
Yeah, definitely. Yeah, definitely. Starlink has ⁓ just a few years become the biggest revenue generating business at SpaceX. So it is definitely a second act or main act as it were. I mean, not that this is what the conversation is supposed to be about, but in my personal opinion is I think there's a chance that Starlink eventually competes with Verizon as your cell phone coverage.
Yeah, that's where they're going. If you saw the T-Mobile ads during the Super Bowl, you know, offering Starlink connectivity, you know, personally, my AT &T is always going out. So the idea of one, you know, the sort of blanketed from space ⁓ is very appealing. I think that's definitely a direction they could go. Cool. Next slide.
So yeah, one of the really interesting things about the sort of company that, ⁓ or companies that Elon has built ⁓ is that he's hired a lot of the same people ⁓ over and over and moved them around ⁓ throughout his companies as he sort of found these ⁓ trusted lieutenants to sort of get things done the Elon way, ⁓ which is, know, we don't see this very often because we don't see companies or ⁓ empires like Elon's very often, ⁓ but you see it here.
sort of few pinpoint ⁓ profiles here. have Steve Davis in the upper right ⁓ sort of is Elon's cost cutter. And so he's been at SpaceX, boring company X. He joined him at ⁓ Doge more recently. You also have Jared Burchall in the bottom middle, who's kind of his personal ⁓ fixer, money man, whatever you want to call it. And is also CEO of Neuralink. You know, you have other folks on here who are just kind of ⁓
engineering, you know, senior, senior engineering folks who have followed him from company to company. And, you know, someone like Gwynne Shotwell, you know, for example, who's been running SpaceX for a long time, I believe as president and is, you know, sort of more day to day responsible for what goes on there. But these are all people that Elon can sort of move around, you know, from company to company as he needs them in different places. I mean, the way you lay this out, it's almost as if
you know, is the Elon empire one company that you're just happening to get access into a certain amount of let's call it equity exposure. But the way Elon is thinking about it is just moving around assets and moving around and where I know we're going to cover another slide in terms of how he finances these things. It's really fascinating when you dig in a little bit. Let's go on to the next slide.
Go for it. Yeah, so there's, you if you go back to the 1900s, from us, be quick. You you have these old school holding companies, JP Morgan, Standard Oil, where, you know, and people hated this at the time, the founder of these companies could funnel around capital and people across different companies within their empire and, you know, extract maximum benefit from that. ⁓ has done here is kind of a throwback ⁓ to that where, you know, because he has these five companies, ⁓
He has Tesla, which is by far the biggest sort of public market success, ⁓ has been able to fund a lot of his other ventures. So margin loans against his own Tesla shares were critical for ⁓ financing X and also XAI. SpaceX became a cashflow generating machine itself, enabling ⁓ Starlink to grow within that. And so there's a lot of this kind of inter-company ⁓
lending and sort of financial wizardry going on that makes the whole machine run, which does have this kind of, you know, the flip side of that is Tesla stock becomes kind of the linchpin of, you know, some of the empire. so that ⁓ Tesla stock going down could sort of be a risk.
I'm on mute, so that doesn't help when you're trying to have a live podcast conversation, live webinar. So, you know, I find it fascinating that the leverage off of the Tesla shares is just so interesting to do that from one company all the way to another company. mean, often you'll hear organizations do that within their own company to fund some sort of initiative, but it's fascinating to go to another company using that same concept. We do have a question versus the previous slide, which was kind of the hierarchy of people.
Do you have any sense, I mean, this would be pretty complicated to know, but do you have any sense of like the incentive packages for these types of people? So whether it's Jared, the fixer, or some of these others across multiple companies, are they being incentivized within one company or are they being incentivized across companies? Practically, then speaking, we're talking about potentially literally as if it's the empire as one company.
Yeah, I don't know, but I would, my guess would be that they're getting sort of equity upside across the different companies where they're working. And I think that makes sense to me from the incentive point of view, you you, you develop a lot of expertise in, autonomy, working at Tesla, and then you're given this opportunity to, you know, like rapidly help Elon by bringing that knowledge to XAI and presumably you would get some upside.
in both companies at that point. ⁓ But I don't have any specifics. Yeah, it would be interesting to see the insider contracts one day. Not that that's going to come out anytime soon in the private companies. ⁓ So let's move on to the next slide, which is kind of talking about what's happening and the key risks. And this kind of brings it more to present day and let's call it the turbulence of what's been happening. Jan-Erik, why don't you set it up for us?
Yeah, it's interesting because if you remember, know, 10 years ago, like Elon was walking around a SpaceX launch site with ⁓ then, you know, candidate Obama smiling. ⁓ It seemed like everything was kind of, you know, this was sort of regular CEO founder ⁓ guy. think, you know, the last couple of years have shown a little bit more of this kind of potential for, let's say, volatility, sort of in the personality. ⁓
Elon Musk, you had very recently a public break with Trump, judging by recent ⁓ flips of Trump, maybe there's kind of reconciliation or at least like a truce there. ⁓ So I think continuing ⁓ down that road might be a little bit risky for the companies potentially because Tesla relies a lot upon sort of government.
know, regulations to be exactly where it is. SpaceX is heavily reliant on government contracts. ⁓ So there's some risks there, although I would say, you know, Elon, I think told Congress, you know, Trump will be gone inside four years. I'll be, you know, one of the richest people on earth for the next 40. So you have to deal with me for a lot longer, which I think was probably fairly convincing for a lot of people. ⁓ There are other risks. I think, you know, kind of ⁓ the tight control over five companies
where lot of investors is a bit of a ⁓ red flag. ⁓ And then succession planning, post-Musk, I think is a little unclear. Although I think it helps that in a lot of these cases, he has people, these lieutenants sort of in charge day to day.
So we have the obvious question here, which is what's your opinion about Elon's relationship with the government and Trump? How much control do you think Trump has on Elon's innovations now? And how should we just impact investors, et cetera?
Yeah, I guess I'm skeptical that there's ⁓ too much that will happen because I think the reason SpaceX gets contracts isn't because ⁓ Elon is particularly favored. ⁓ He certainly wasn't favored by the last Democratic administration and yet SpaceX was still coming along, ⁓ growing very fast. I think SpaceX has the only real ⁓ space company in the country ⁓ and it's more equipped than NASA to do a lot of tasks.
So I don't think there's anything particularly catastrophic on the horizon for SpaceX in that sense. And then I think Tesla too, know, Tesla has some, these EV credits obviously are a bit of a incentive to buy a Tesla, but Elon is on the record saying he doesn't want EV credits anyway. ⁓ So I do think, you know, it's all sort of a entertaining show and I think it's,
⁓ sometimes a little maybe gut wrenching if you're an investor, but I think that the advantages that those companies have are structural based on what they do and not so much reliant on any one president to sort of maintain. What are your thoughts, Christine?
Well, for one, think SpaceX in recent years has really reduced their reliance on contracts. If you look at their actual revenue mix coming from the government contracts versus Starlink and other sources. So I think in terms of revenue mix today, whereas of 24, that risk looks a lot less than how it would have looked a few years ago, say 2020, 2021, in terms of revenue mix coming from government contracts.
So I think that's an important context to keep in mind as they continue to build out other revenue sources than just the government contracts. Now, from my perspective as a secondary markets person and a pre IPO broker, where we look at supply and demand, we look at pricing and those kinds of things for the secondary market trades, it's an interesting question. I think this recent political drama will be a red flag for some buyers and that will
maybe reduce demand from some investors in the market perhaps. On the other hand, for investors that are still long-term believers in the company, believers in Elon and his ability to move forward from here, it could be an interesting entry point amid some of the chaos. So SpaceX in the last several years, really five plus years, has been a pretty competitive ⁓ company to get into, a pretty... ⁓
consistently trading at a premium type of company. And so if we do end up seeing a kind of ⁓ chaos fueled break from some of that hyper demand that could possibly be a good entry point if it brings down pricing or if it makes some of those allocations temporarily ⁓ less competitive to get into. So as a parallel around early 2020 with all the pandemic chaos,
there was a kind of temporary break where SpaceX was a little bit easier to get into than it had been previously and continued to be after. And some of those investors that got in amid the chaos did very well in the last several years. So as with most things, it depends on your view of the company and where it goes from here. And for those that are long-term believers, sometimes chaos can be a good entry point, particularly if the company otherwise is
hard to access at a reasonable price point. Yeah, I mean, I would argue that, you know, Tesla almost has been trading like a meme stock, where if you I'm looking down at the pricing, if you look at late 24, you know, before the inauguration and stuff, we see prices as high as like 480. Right. And then you fast forward into a little bit of ⁓ drama.
Obviously you have the April 1st kind of tariffs and then it's still hanging up in late May at 350. Then you have the bromance breakup and it finds its way down to 280. And here it is today at 325, you know, 325 in absolute terms, you could say is very expensive. It's a trillion dollar company.
But we just went through the comparisons on pricing. So on a revenue multiple, it's not that expensive, but compared to its peers, it's quite expensive. But compared to, let's call it XAI, it's cheap. And ⁓ compared to itself, it's obviously below its meme high. I use that on purpose. So it's just very interesting. If you want to enter some volatility and you want to find an opportunity for maybe some cheaper or even a trading channel, ⁓ not that this is a trading ⁓ conversation. know, Tesla definitely has that.
What's interesting in the private markets, Christine, are we seeing such volatility on pricing or is it too slow to move because it's private? So there's just not that liquidity, for example, on XAI or SpaceX. I would say slower to move, the second option. So ⁓ I don't think it's definitive yet if SpaceX demand has faltered because of all this drama. I haven't really seen that trend definitively yet. I still see investors
asking for SpaceX, I still see supply being relatively scarce and so on. So the supply demand dynamics so far after all this have still been quite supportive in Elon's companies from Neuralink, SpaceX, et cetera. And so generally tend to be slower moving, but I think we'll know more how that shakes out. If another tender does come in the next few months, who to say just speculatively. ⁓
and it'll be interesting to see if there is a tender and how that's priced and what demand dynamics look like if there is a tender. that I think will give us more information about possible effects of this. So I'm gonna put you both on the spot. So we still have three and a half years more of Trump in this term and assuming Trump's still there and assuming Musk is still there.
Do you see the remaining three and a half years, you only have three choices as green for the Musk Empire, yellow for the Musk Empire or red for the Musk Empire? Green being quite bullish and it will bully all these companies. Yellow meaning it could be a lot of media hits and a lot of noise, but kind of indifferent or red, it will be negative on the Musk Empire. And obviously you have to predict lots of permutations of what could happen.
but you can only give me one of those three and your reasoning. So red, yellow, or green, who would like to go first?
I can go, I would say, I would say green. And for me, the big kind of outlier would be SpaceX, which, you know, as Christine pointed out is generating most of its revenue now from, from Starlink for which, you know, demand has just been crazy. I don't see, I don't see SpaceX being, terribly ⁓ injured by anything that's been going on.
recently politically and I see it just continuing to grow. I think the other bets, know, Neuralink, the boring company, we might still be talking about them as very nascent ⁓ four or five years from now. But I think that SpaceX alone is probably enough to tip it into green for me. Great, Christine. For me as a broker, I have to be very careful about separating my own view from
serving clients, matching buyers and sellers. So I have to tread a little bit lightly on any kind of predictions. I can't endorse certain stocks, et cetera. But I will say that a lot of investors and clients I work with like SpaceX, because they are a bit less correlated to what's going on in markets or what's going on in other factors. So when we saw a lot of tech stocks crash in 22 and 23,
SpaceX still had this track record of continuing to do rounds at incrementally higher pricing roughly every six months, you know, across years. And so ⁓ when the rest of the market was down, still managed to find a way for SpaceX and some of his other companies to be up. And so I think what has been very attractive to a lot of investors is that this Elon effect or some of the success of his companies
is ⁓ separate or uncorrelated from a lot of different drama and volatility going on. And so I think that we might see believers of Elon believe that he's gonna do well no matter what, whatever the environment is, whatever the political climate is. Do we believe that Elon is gonna be scrappy and find a strategic way to make whatever's happening benefit him? I think a lot of people would say yes.
Yeah, I'm in the, I lean towards the green camp as well. Even though I do think there's gonna be a lot of chop day by day, month by month, week by week. I do think both are let's call it pro business and figuring out how to make themselves and their enterprises more wealth. So I think that will be net green for the Musk empire. But we don't predict the future and this is not investment advice. So that's why we're all gonna be.
listening into the reality TV show, which is life. ⁓ So let's go on to the final slide, which is actually thinking about these investments. So Christine, can you give us from your perspective, how you're seeing these opportunities? What's the shape of these opportunities? And what are you seeing in terms of pricing, et cetera? Absolutely. So across the Musk companies, they do tend to be...
slightly lower supply, harder to source and high demand. That's what we've seen at least historically. Now, what this can mean for investors trying to get in ⁓ is you see flurries of activity suddenly around ⁓ tenders or primary rounds that each of these companies do. So one thing that's characteristic of Elon companies is that ⁓ he likes to...
remain private as long as possible. In the case of SpaceX, for example, has talked about in the past, not wanting to go public until humans are regularly on Mars, et cetera. And as part of quelling some of that need for liquidity, these companies will often run tenders. And on the secondary market, we see activity around the tenders. For example, SPV managers who get an allocation in that tender,
offering on that allocation to their LPs and to other investors. So from the investor's perspective, sometimes these markets can feel like they're really quiet and difficult until suddenly one day there's allocations available and sometimes you have to move quite quickly. So often it's good to front load some of your diligence work and some of your preparation as an investor to be ready so that you kind of have a good awareness of the landscape.
and your boundaries around pricing and structure so that when an opportunity does come about, you can move quite quickly and be more decisive. So that's one factor to keep in mind. The second factor is that... Sorry, really quickly on the tenders, do you have any sense as to when the next tender might be for any of these four companies or it's totally uncertain? I'd be speculating, but if you look at SpaceX over the past...
five or so years, they've done a tender, it used to be every 12 months or so, but it's now closer to every six months. And the last tender for SpaceX was around December 24. So it was possible that we could be due for one relatively soon. But of course, know, historical trends don't always continue forward into the future. So we won't know for sure. Great. And for the other companies, no visibility really. Is that right?
not really tenders haven't been as commonly seen, you know, in XAI or Neuralink as much of it is as much as it's a strong pattern in SpaceX. That isn't so much the case for the other companies, but there are there are still flurries and activity around the primary rounds. So Neuralink, for example, just did a round and then there was some allocation suddenly available through some managers as well as XAI. There's there was some activity
around the merger that was going on ⁓ and new allocations coming available. Super helpful. Sorry, you were onto your second point. Yeah. So the second point is that for individual investors, especially, so maybe you're investing a smaller amount or maybe it's 50K, 100K, 250K, you can assume that if you do get an investment allocation, it would be through an SPV. SPV being a pooling vehicle or fund.
where you're pooled together with other investors ⁓ rather than a direct allocation in these companies. Direct allocations in these companies, meaning on the cap table, are extremely rare. And typically ⁓ only a handful of extremely elite funds going in for 50 million, 100 million or more in allocation are able to get in. So as an individual investor, you can assume direct access will not be possible.
And so you'll need to get comfortable around SPVs and understand that. So of course, the Vincent sessions are very helpful or pre-IPO brokers can be helpful to get you up to speed on what SPVs entail and the type of diligence process that is involved in those structures. But that's something to be aware of. There will likely be some structure around getting into these companies. Yeah. As it relates to that,
Christine and I did a great session about how to navigate pre IPO companies as a totally separate session. That was like a solid hour going into the minutiae in detail, which we're not going to revisit here today, but you should absolutely on your own check out that session on the Vincent website and feel free to follow up there. And which one is the easiest to get Christine? I would say SpaceX. Which one is the hardest to get?
⁓ Boring company, I almost never or ever see it trade. Neuralink is also extremely difficult. And ⁓ I think you already answered this question, Christine, and I'm going to put you on the spot here, but Christine, feel free to jump in again. I'm adding the public company, which is Tesla, which is if you can only pick one of these four companies or Tesla to put in your
$1,000, $10,000, $100,000, $1 billion, however many zeros you want to put in. You're only allowed to put into one. At the moment, this is not investment advice, obviously. Which one do you pick? And I'm allowing you to include Tesla. And why do you pick that one versus the five?
Yeah, I mean, it's boring, given what I said previously, but I would pick SpaceX. I just think that they are so far ahead of, you know, the competition, Blue Origin. They have, you know, several lines of business and, you know, they're run by, you know, the incredible Gwynne Shotwell. think SpaceX would be absolutely my choice for an investment, even over Tesla. Christine, is it what you said before?
Yeah, again, I can't endorse a particular company, but I think one thing to keep in mind is that ⁓ you want to also think if down the road, maybe three years from now, I have a liquidity need, maybe I need to resell while the company is still private. Typically, the more active a secondary market is for a company, the more likely it is that you can then resell your position. And so that's one thing that a lot of
investors also keep in mind when they're comparing one company company to the other. How much demand is there? How resellable would this be if I needed to find a private buyer down the road as well? So SpaceX historically has been such an active market that some investors who maybe originally bought privately, maybe 2019 have
been able to resell on the private markets. And it's a bit more liquid in that sense, even though private stocks in general are very illiquid. So that could be one thing to keep in mind, which historically anyway, has been interesting about SpaceX. So let me be provocative here. OK, SpaceX, why SpaceX? I mean, you could go XAI, which is only at $113 billion, and OpenAI is already at $350 billion.
And we're talking maybe, I don't know, the second inning in baseball metaphor of where AI is headed. So 10 years from now, XAI is going be worth a lot more than SpaceX because it's going be one of the three, if not the number one AI infrastructure company, including having all the unique content from X. that's, and you're coming in at a much lower price. So you can come in at 113 and by the time you hit 1 billion, you've already 8, 9 X'd.
versus to hit a billion on SpaceX, you've only 3Xed. And obviously, those multiples get much bigger once you get to bigger numbers. And on the Tesla side, if they really are on the cutting edge of humanoid robotics, and 10 years from now, if we all have robots, like we have cars, obviously it took a while for everybody to get cars, but you see where I'm headed. ⁓ I mean, that potentially is a massive, massive organization, right? Replacing human workers, et cetera, et cetera.
So why not pick one of those two companies instead?
Well, these companies are all high demand, you for different reasons and for different investors. So a lot of the investors that go for SpaceX aren't necessarily looking for a 50X or a 100X. They're looking for a combination of perceived growth potential, but also maybe a bit of a track record. For example, the track record of tenders recently every six months is quite interesting because there could be...
as I say, potentially more liquidity ⁓ in working with a company where the founder has shown a commitment to doing regular tenders, particularly tenders which in the past few years have created this uptick in pricing semi-regularly. So that's very attractive. think that that typical pre-IPO investor is not going for maximal, maximal growth. They're going for growth balanced with a bit more... ⁓
visibility and other factors as well in balance compared to much earlier stage investors which are going for that moonshot return. Right, it's almost trading like a public company even though it's private, but it's probably trading more than other public companies actually.
Jan-Erik, what are your thoughts? Yeah, so one thing I would say is you can sort of flip it around too and say, well, SpaceX literally has ⁓ other moonshots that become more and more feasible technically as launch services becomes cheaper and more reusable and more efficient. ⁓ One is sort of ⁓ space manufacturing. There's various sort of things, including ⁓ ironically, ⁓ silicon wafers for computer chips that you can produce
more easily in microgravity. And so there are various startups doing this, but you can imagine a world where SpaceX becomes kind of the rails of space manufacturing. I think there's tourism, there's Elon's vision of colonizing Mars. think, so if you're willing to sort of extend a little bit of ⁓ credulity to these various ⁓ TAM expansion visions, I think there's plenty of potential upside ⁓ with SpaceX. I think for me, like XAI, ⁓
I haven't seen enough that convinces me that they're going to be one of the big players that will win here the way that OpenAI and Anthropic have. XAI only just launched an API and their models are not ⁓ at the frontier like OpenAI and Anthropic. So they totally could ⁓ do great. I would definitely, ⁓ personally, I think it's an exciting company to keep an eye on, but I don't see the competitive moat the way I do with ⁓
SpaceX personally or Tesla. I appreciate you participating in the debate and at Christine here, this is a very straightforward question. You've kind of answered it in different directions, but just to ask clearly. what access do you have to Elon's companies?
It's a very sensitive company, so I won't mention specifics. I'm happy to speak to any investors, one-on-one and give ⁓ more color on the market, but hypersensitive companies, but I will say it's a very active name in the secondary markets. All right, perfect. Well, ⁓
I think that wraps us up. covered a lot of ground here from showing where Elon came from and where he is today, the opportunities you get to look at, provided some comparative analysis on the financials and on the technicals there, and then obviously discussed what makes Elon an Elon company and how that is a moat, all the volatilities associated with it, and obviously what it's like to try to get into a specific company today, what the opportunities are, the pricing dynamics, et cetera, et cetera.
So ⁓ thank you all for joining us. I saw a lot of you were engaged for most of the time. We got lots of great questions. And thank you very much. with that, that concludes this session.
Thank you, Slava. Pleasure. Bye. everyone.
