00:51:51 路 Jordi Hays, John Coogan
[00:51:51] S0: Yeah. Great to hang, dude. [00:51:52] S1: Appreciate it. Thank you. Let me tell you about CrowdStrike. Your business is AI. Their business is securing it. CrowdStrike secures AI and stops breaches. We will be joined by the CEO of Snowflake in just a few minutes. Thank you for tuning in. We need to move on to the story. [00:52:11] S0: Cannon says, the cashier at Home Depot just asked if I want to round up to support the SpaceX IPO.
00:52:18 路 John Coogan
[00:52:18] S1: SpaceX IPO is gonna be big Friday. We might have a surprise guest. It's gonna be fun. Also, there's this crazy meta story going on. Not meta, the company, but, like, story about a story behind Ty Morse. He's going all out trying to get an Elon interview, and it's been fascinating watching him build the craziest set in podcasting history. We're rooting for you, Ty. Good luck. Hopefully, you land it. It is the quiet period, so it might be difficult, but I think that there's a plan to extend the effort and everyone's rooting for it to happen. It's been viral on X many many times. Also, Bloomberg's reporting that the SpaceX IPO is four x oversubscribed. Do they know that already? Does do do you get that information at this point? That's really good news for the market, for this for the overall. There was an interesting article. I mean, we can go through some of this. I think this was in The Economist SpaceX talking about, where is it? Can the market swallow SpaceX, Anthropic and OpenAI? Watch out for indigestion. But they talk about the float, the free float. This was very interesting. So obviously the company might be worth a trillion dollars. How much of that trillion dollars is actually actively being traded? Like sure Fidelity might at any point in time have a price at which they're willing to buy more and a price at which they're willing to buy to sell their stake. But founders are often locked up. Founders often want to maintain control. Employees are locked up for a certain amount time. Certain investors might be locked up unless you're Bill Gurley. Don't try to lock him up. Nobody can lock him up. He's a wild man. But the float is important because if it's a trillion dollar company and the CEO passed away a generation ago and there's all financial managers in, it's only owned by hedge funds. This was the story of Take Two before Strauss Zelnick came in. Take Two, the makers of Grand Theft Auto, It was entirely held by shareholders, by financial investors. And they were unhappy with the management team and the management team didn't have any equity. And so he was able to raise his hand and say like, I'll run this thing. And they were like, absolutely. Thank you. And they let him take over the company without really putting anything up.
00:54:45 路 John Coogan
He didn't need to do a hostile takeover like bring a bunch of capital to bear to get control of that company and become the CEO. And it's been a fantastic success for him and fantastic success for Take Two shareholders who stuck along stuck around for the Strauss Zelnick era. But the float matters. And Microsoft, it's 100% floated. The free float is 100% because the founders have moved on and divested and they're not locked up. At Apple, it's like 99%. Broadcom is also at 98%. NVIDIA at 96%. Amazon is at 91%. Only Jeff Bezos is considered sort of off the table. Alphabet at 90%. Tesla at 89. And Meta is notably, of the big tech companies, the lowest free float at something like 88%, 86%. And the reason for that is because Mark Zuckerberg has a lot of control. If he sells his stake, he loses control. So no one's expecting him to sell even if the stock goes way up or whatever. Like, he's going to maintain his position because he wants to run that company. Now, SpaceX is in an interesting, interesting place. So 13% of Meta's shares are owned by Mark Zuckerberg. SpaceX plans to release locked up shares in a series of tranches if its IPO issues $75,000,000,000 of shares valuing the firm at its hoped for $1,800,000,000,000 valuation, the initial free float because if you buy the IPO, you're not locked up. You can sell the next day if you want. Technically, this means
00:56:13 路 Jordi Hays, John Coogan
[00:56:13] S0: it's not like the whether whether somebody's like buying through, you know, investing through like JPM Yeah. Morgan Stanley Goldman. Goldman, all these pieces. Like, technically, you can go and sell. Yeah. They just might restrict you from other IPOs. So you would like And and this happens like on all the different apps, you know, Robinhood, public, etcetera. If you're buying into an IPO, they they basically are asking you nicely, do not sell. Don't don't flip don't flip here. Yeah. But people can. Yeah. And so with how many retail dollars are flowing into this, I expect a lot of people that are buying buying, you know you know, basically buying the IPO [00:57:01] S1: Yeah. [00:57:02] S0: To start trading almost immediately.
00:57:02 路 Jordi Hays, John Coogan
[00:57:02] S0: To start trading almost immediately. [00:57:04] S1: Exactly. But So it's importantly, it's only 4% of the free float. So only 4% of that $1,800,000,000,000 is a lot of money, but it's only 4% will be really free trading. And then of course during the IPO process you're vetting investors and you're trying to get the people that will hold forever. And Elon has done a fantastic job of that with the indices. So he's gotten the NASDAQ, the S and P and a few others to like commit. So although NASDAQ has already shortened the seasoning period before index inclusion to fifteen trading days, the Russell slashed its waiting time to five days. Most share indices wait firms in proportion to the value only of the shares released for public trading. And this is important because people look at the S and P five hundred and say, wait, S and P five hundred, a $2,000,000,000,000 company coming into that, your weight, if you're just buying the S and P five hundred is going to be more than 1%. It might be in the single digit percent. That's a lot. And we've been talking about the S and P four ninety nine for the bears. Right? In fact, the initial weight in the S and P 500 will be around point 1% because it's just that 4% free float and then it increases over time as the shares get locked up. We actually have a chart here of how the lockups work and it takes basically [00:58:22] S0: Yeah. There's
00:58:22 路 Jordi Hays, John Coogan, Sridhar Ramaswamy
[00:58:22] S0: Yeah. There's [00:58:23] S1: whole year, almost two, for everything to get unlocked and it's also triggered based on share price appreciation. So if the shares trade up 30% or more, then more shares become unlocked and the road to a 100% lock up ending happens slowly. And so just a little bit of an interesting deep dive into how the SpaceX IPO will fare. Anything else to talk about on that story before Apparently, we move [00:58:53] S0: senator Warren Yes. Has urged the SEC to halt SpaceX's IPO citing governance risks, Elon Musk's control, and potential foreign, especially Chinese investment concerns. She also highlighted SpaceX role as a US defense contractor. Has never met a business that she liked. I think except maybe I don't know. Large financial institutions. [00:59:20] S1: Who knows? Think she [00:59:20] S0: she likes those. [00:59:22] S1: Well, we have our next guest in the waiting room, Sridhar Ramaswamy from Snowflake. He is the CEO. We're very pleased to be joined by him. Welcome to show. Thank you so much for taking the time. How are you doing? [00:59:35] S8: I'm well. Thank you for having me. [00:59:37] S1: Can imagine you're doing well. The the company is doing fantastically. I am interested to hear no. I mean, obviously, there's been an emotional roller coaster, but I'm more interested in the data that you're seeing that shows acceleration, so much promise, so much opportunity in this particular business.