SpaceX moves to launch IPO that could make Elon Musk a trillionaire

All right, welcome back in a live now. I'm Austin Westphal. Let's talk about money. Elon Musk has plans for one of the biggest stock sales ever. He's filing to take SpaceX public, and assuming the initial public offering, the IPO, goes off without a hitch, it will rank as the largest ever. It will also likely make Musk a major SpaceX owner, and already the world's richest man. It'll likely make him the first trillionaire. In the long run, SpaceX says that it wants to finance projects in order to put people on the moon and Mars, in order to achieve its quest to make humans an intergalactic species. Let's bring in Ava Addos. She is the chief investment strategist at ERShares. Let's talk about this huge valuation that might be approaching here, Ava. SpaceX is looking at a potential valuation approaching $2 trillion. Help us understand why we're talking about that amount of money. Austin, this is going to be the biggest IPO, certainly in the US history, but also probably globally. The next closest will be Saudi Aramco, so that's not a US company. We're speaking about a very strong IPO. Everyone is very excited. There's nothing like this. It's a historic IPO. We're speaking about a company that's not just a rocket operator. We call it the three-engine empire because it spans between the core, the SpaceX core, which is the rocket operator. Then you have Starlink, which is the communication arm of the company. Also, you have now SpaceX AI, which is the AI arm. That will be what we believe the leader when it comes to AI, because OpenAI and other companies are easily replicated. These so-called LLMs are easily replicated. What you can have as a company that can be a competitive advantage is the infrastructure supporting these LLMs. SpaceX is able to do this probably, and we hope so, with the data centers up in the space. That will be a blockbuster IPO for many reasons. Elon has famously resisted taking SpaceX public because he didn't want the pressures of Wall Street to impact his mission to Mars. Do we know what changed about that? I think there is. It's obviously a financial decision from Elon that would make sense at this point to go public, but there's so much interest when it comes to reading investors, to the public, to the everyday people that they want to access these companies that now stay private more than ever before. We're seeing, we're analyzing companies. We came up with this innovative structure. We have the first ETF ever. It's called XOVR. It's the crossover ETF from ERShares. It's the first time ever that an ETF allows access to private companies. Our biggest holding right now is SpaceX, which accounts today for 23% of the portfolio. That's a very interesting for us development. The reason why we came up with this is because we noticed that companies are staying private for longer and retail investors are getting locked out of these amazing opportunities that are reserved for accredited investors, ultra high net worth people, and so everyday people are not able to take part into this. There's going to be hype around the stock when it's open for business, but once the hype dies down, what is going to tell us whether this SpaceX stock is a reliable long-term hold for investors? We certainly think this is going to be a long-term hold. We believe it's going to be the next Magnuson 8. So we think this is going to be one of the elite, if not the elite Magnuson 8. We are speaking about a company that has monopolistic characteristics. It's not just a tech company. It has monopolistic characteristics. You can evaluate it as an infrastructure play and that brings us back to the days of Carnegie and Rockefeller and Vanderbilt that they controlled the whole supply chain. So for their competition to use them, the competition had to use them to be able to operate their own company. So we see this with Elon too, where we saw Amazon Leo using SpaceX to meet the FCC deadline. We also see it with Anthropic that they're leasing Colossus One, their data centers. So we see many companies now are using SpaceX as an infrastructure and so this is when it becomes a monopolistic company that we believe will outperform any competition out there in the future. So to us for the XOVR ETF, this is going to be a long-term hold. We have a very strong conviction in the company. But when I hear the word monopolistic, I mean, will they inevitably run into government roadblocks and global regulatory hurdles? Is that going to be an important consideration moving forward with something like this? Elon has proved that he's able to overcome all these challenges, right? So we believe in the entrepreneur. Elon to us is the best entrepreneur in the history, probably even better than the names I mentioned before, like Rockefeller and Vanderbilt, etc. So we believe in Elon. We believe in the team that he has built. He has great synergies among all these companies, including Tesla. And so it will be very hard at this point, it has become too big for the company to not be able to overcome all these challenges that might come. I'm not saying that the path is clear, but we have a strong conviction in the leadership here. So AI, another big AI headline that we've been talking about, and we just did a whole segment about AI, yet another AI headline, surprise, surprise. OpenAI says that their reported upcoming confidential filing, it's reportedly, it could be on the cusp of coming. OpenAI is, of course, the company that owns ChatGPT. You could argue that ChatGPT was the first product to bring generative AI to the masses. Ava, how significant could OpenAI's debut on the stock market be in determining the value of the artificial intelligence sector? So we analyzed OpenAI, it was one of the companies that we could invest with the XOVR ETF, but we decided not to. That being said, this is going to be a major year for IPOs, for new IPOs, and OpenAI is one of them. But we don't believe in it as a long term leader, as the next magnificent aid, because the reason is what I mentioned earlier, when it comes to LLMs, you really do need the infrastructure to support them. They have great competition with Anthropic and XAI or SpaceX AI and all these companies. So to us, we decided to go with SpaceX and that gives us also the SpaceX AI play because of the infrastructure. So OpenAI does not have that. We also see a weak secondary market when it comes to OpenAI. I know this is too technical, but we did not have a strong conviction. When it comes to SpaceX, we have a very strong conviction that this is going to be one of the leaders out there in the future. This is going to be one of your Amazons, of your NVIDIAS. This is going to be the main company that people will be speaking going forward. That's why we wanted to get into it early, to provide all that value to retail investors with XOVR, that they're not able to get into it before the IPO. Thanks for the time, Eva. Appreciate it. Thank you for having me.