SpaceX's historic $86 billion public debut is giving way to the public market.
The high stakes SpaceX Starship Flight 13 test in Texas scrubbed last night.
While the fallout from a dramatic last second aboard at Starbase Texas and yesterday evening, SpaceX's massive starship flight was less than a second from liftoff when the engines did shut down, triggering an automatic system scrub. does insist they'll try again in a few days, and investors in the after hours market did not wait for the first time since listing in June.
We did see that the stock has cracked and slipped below its $135 IPO price while some institutional bulls called this a generational entry point.
Well joining me in this morning is Joel Schulman, founder and chief investment officer of the shares.
Joel, good morning.
Thank you so much for joining us.
Taking a look at the price section of SpaceX shares, we are looking at that $135 level.
But I understand you spent years studying the power of leaders through the lens of the entrepreneur factor.
So when it comes to names such as SpaceX, what do you make of what we're seeing right now, especially right now is whether or not this is the perfect buying opportunity before that Nasdaq 100 inflow actually kicks in.
Right.
Well, you mentioned, I mean, we, we've been using the VC lens for 21 years now.
We got into Nvidia back in 2005.
We've held it since, and we look at SpaceX in our uh, uh, it's now about a 15% weight in our XOV, our ETF.
It's our dominant position.
Uh, we're not panicking here.
We know today it's below 130.
We look at this as a long-term hold.
I mean, they've got 33, You know, moats behind the 3-engine, we look at it as a 3-engine empire.
You know, the space launch, which yesterday was postponed, um, notably, you know, it was pushed off.
It doesn't mean that, you know, it, uh, it, you know, it was necessarily a failure.
Better to push off a couple of days and have a successful launch than, than have, um, you know, failure on, on the day of launch.
But, you know, they dominate this market.
They've got 90% of all the mass in space.
They're the cost leader.
They brought cost down.
Well below the government levels.
And uh, you know, they continue to bring the cost down.
And then they've got Starlink, which is a crown jewel with Telecom.
They've leapfrogged, they've leapfrogged uh cellular.
They've got a 5 pricing tier model from, you know, domestic at one level to 3313 times for aviation.
And then, of course, we've got XAI, the data centers in the cloud, and if they pull that off, it's gonna be worth well more than where they are today.
Yes, so you mentioned the different pillars of SpaceX's business, of course we're paying attention to AI in addition to space as well as satellites, but on the heels of the cursor acquisition, do you think running data centers in orbit actually makes business sense and what about the evaluation?
Do you think prices do you justify what we're seeing in terms of the evaluation?
Well, I mean, look, all the gross stocks today in the last few days are off, and we're, as you mentioned, uh, the market in the NASDAQ's off about 2%.
Chip makers, AI companies are off, and SpaceX, being a high multiple company, um, more than 100, um, you know, in terms of market capital revenue, is part of that grouping.
However, unlike many of these other companies, and you mentioned, for example, Moonshot coming in.
And, uh, you know, taking, taking a chunk out of potentially anthropic and open AI, some of the private companies that were expected to come out either later this fall or early spring.
We've got to remember that, uh, SpaceX has 3 clear moats, and this is what we look for in our long-term holdings in our ETF, you know, so we have, again, a 21 year history with our entrepreneur 30 total return, which dominates the indices compared.
To, you know, all the, you know, the leading benchmarks.
And in our portfolio, we have our dominant position in our XOVR ETF, the dominant position of SpaceX, and we're not panicking.
I mean, we think of 125, 130, it's a very good price point.
We have, we've gotta remember, we've got the mag 7 earnings coming out the next two weeks, and earnings have been really strong, uh, the last Quarters.
We're having record earnings growth uh this year in 2026.
It's largely because AI has enabled revenue per employee to skyrocket.
So the, the productivity of companies is really strong.
We, we may see a reversal.
I understand today the markets are off, they've been off for a few days, but, uh, we also have the war in, in, uh, you know, Iran that's, you know, causing a dip.
But when Earnings come out at the end of the day, earnings will drive this market, and we've seen that happen in the 2nd quarter, uh, and, and we, we're bullish on the 3rd quarter.
So, next week, the following week, if we see the market still off, then, you know, that's the time for the, you know, people to take a pause on gross stocks.
But until we see the earnings coming out the next few weeks, I think, I think it's a wait and see market and I think it's gonna be very strong.
Yes, and speaking of earnings, SpaceX does have to report its first public quarterly results soon, and we will also be watching that expiration of first insider share lockups.
And sometimes when we're looking at new companies going public, SpaceX has been compared to say the likes of Facebook.
But what are your expectations as we head into the second half for SpaceX?
So I'm also a tenured full professor at Babson College, so I study things like this.
And if you look at, you know, Facebook when it came out, you know, 1015 years ago, and the other 15 tech companies over the last 15 years, they tended to drop uh 50% from the peak high in, in the pre-lockup to post lockup.
The big difference, of course, was SpaceX.
Um, and, and by the way, if people bailed out of Facebook, they would have lost a 10x, 13, 15X return from pre-lockup.
To where they are today.
So it's not always a given that investors should get out at pre-lockup, and we look at SpaceX in a similar manner.
So we look at SpaceX, first of all, we've got to remember that SpaceX, unlike the other companies, these other tech companies that came out in the last 15 years, including Facebook and Alibaba and Coreweave and Circle and so forth, SpaceX has got a positioning in the indices and As they continue with the lockup release, it's going to increase the float for more indices like the NASDAQ 100, which manages about 800 billion, a 5% weight, and tech companies like Tesla and SpaceX will have a similar weight.
So the indices are going to be there to take up some of the float, and we've got to remember there's as much as, you know, 15 to 20 trillion in indices, both passive.
And active indices that will have some portion going into SpaceX as our float increases.
And all the, the lockup does not release in one month.
It's gonna start in August 6th perhaps and then continue, but it all doesn't come out at one time.
It comes out over a period of time as the float for the indices, you know, increases.
And that's going to provide a floor in our opinion.
Yes, and Joel, before I let you go, when we're talking about Facebook's IPO, we have to keep in mind that a decade and a half later, the company's name has changed and it is Meta now.
So I do want to ask you about Maverick founders, especially because you've pioneered this entrepreneur factor.
So when we're looking at a company.
Like that, we think of Zuckerberg and when we look at a company such as SpaceX, we think about Elon Musk.
So tell us about this factor and is Elon Musk's style still a premium for the stock, or do you think a potential liability for some of the more conservative portfolios out there.
So, we've studied, uh, we've studied these founders, CEOs longer than probably anybody.
We published, uh, a lot of academic journals and, and er trade journals and so forth, uh, articles in these journals.
So this is, we have a VC lens, and the VC lens for our entrepreneur factor looks at 18 different attributes.
Of course, the most critical pieces.
Are, you know, the, the leaders at the top, the founders, CEOs, they tend to compensate themselves differently.
They get paid biggest, but they get paid last.
So you look at a fellow like Elon Musk that's, you know, uh, at $1 trillion or so net worth.
He, he went, for example, at Tesla, he went many years that if it didn't work out, he would have gotten nothing.
And there are very few.
CEOs that would pay themselves that way.
But you look at these dynamic leaders over time, over history, way before Zuckerberg and way before Jensen Wong, and, and Jeff Bezos, and so at Amazon and, and, and Musk, you know, we, you go back to Sam Walton and you go back to Steve Jobs, and these great founder CEOs.
They know how to run a business and to find them in publicly traded companies at a market cap of 10 billion or more is not common, OK?
They usually, uh, they usually, you know, um, leave the organizations or bought up way, well before that.
So when you look at some of these dynamic.
CEOs are running it like a Musk, who knows how to manage the company, who takes on, you know, strong challenges and usually succeeds, and those who bet against Musk have done so at their own peril.
He's a great leader.
We, we don't mind him having control.
We don't mind him.
Um, you know, leading the organization, in fact, we wouldn't probably be in this company if it wasn't for him.
And the same thing holds true for, uh, for Nvidia, which we've held for 21 years.
We have, uh, a large stake in Meta.
We have a, you know, large stake in, in some of these other, you know, high profile companies that are, are led by great leaders like A loving and so forth.
So this is what drives the organization.
They get paid biggest.
They get paid less.
They keep an eye on cost structure.
They keep an eye on their key employees.
They know how to take care of them.
And this is why we, and we have other, we have again 18 attributes that we look for when we buy these publicly traded companies in our, you know, XOVR ETF.
Well, Joe, great conversation, but we will have to leave it there for today.
Thank you so much for sharing all of your insights and have a great weekend.
You too.
Thank you.
