Should You Buy The SpaceX IPO? Fund Manager Answers | Will Rhind

The video, featuring analyst Will Rhind, examines a volatile market selloff and the blockbuster SpaceX IPO. Friday's drop was driven by Broadcom's failure to raise guidance enough for a "priced to perfection" market, triggering a chip selloff and a 4% NASDAQ decline, underscoring the danger of extreme concentration in AI names where one miss can drag the entire market. The SpaceX IPO, expected to price June 11 and trade the next day, is oversubscribed with 555 million shares at $135, aiming to raise about $75 billion at a roughly $1.8 trillion valuation—which Rhind calls "probably one of the more expensive IPOs ever." The bull case parallels Tesla's evolution, noting Starlink already dominates revenue (61–70%) and xAI adds optionality, while bears argue the valuation is unjustifiable and new investors may provide exit liquidity for early VCs. With many pre-IPO shares potentially unlocked and no clear consensus, the key takeaway is that investors must decide whether to pay up for future growth or judge current fundamentals—both for SpaceX and the broader AI-driven market.

• ▶ 0:52 Friday's sell-off was driven mainly by Broadcom—its guidance wasn't raised enough for a market "priced to perfection"—triggering a chip stock selloff and a 4% NASDAQ drop, rather than the strong jobs report.
• ▶ 2:44 A key risk is concentration in AI names: one large company merely meeting or missing expectations can drag down the entire market, so investors must prepare for company-specific, unforeseeable shocks.
• ▶ 3:11 With markets at all-time highs, elevated volatility is the norm; even Nvidia beating and raising guidance has led to post-earnings selloffs, but fundamentals still matter and dips are often bought quickly.
• ▶ 4:59 SpaceX's IPO is described as the largest in history with a clearly polarizing valuation, split between bulls expecting "trillions" and bears who may skip or short it.
• ▶ 5:54 The guest's firm plans to launch 2x long and 2x short SpaceX ETFs, targeting availability on the IPO day.
• ▶ 7:39 The long-side bull case draws a parallel to Tesla's IPO, noting that SpaceX's lack of profitability now doesn't preclude it from becoming a massive growth success later.
• ▶ 8:54 Starlink is the crown jewel of SpaceX, providing a profitable, revenue-generating core business today.
• ▶ 9:20 Though unprofitable, xAI adds high-value optionality as a direct competitor to OpenAI and Anthropic, which are expected to IPO at trillion-dollar valuations.
• ▶ 10:16 The bull case parallels Tesla: SpaceX's investment story is driven by future opportunities (AI, space infrastructure, robotaxi-like bets) rather than current fundamentals.
• ▶ 11:06 SpaceX revenue is now dominated by Starlink, accounting for roughly 61–70% of revenue, while rocket launches are about 22% and xAI about 17%.
• ▶ 11:27 The key forward-looking question is what future space use cases will be profitable for shareholders—with communications, new energy production/storage, and "data centers in space" for AI being leading candidates.
• ▶ 12:40 Will Rhind stresses that we don't yet know which space opportunities will win out; like Tesla's evolution, they will emerge over time and get baked into long-term valuations.
• ▶ 13:05 The bear case centers on valuation as a primary reason investors may avoid buying into SpaceX.
• ▶ 13:16 Bloomberg reporting is cited, indicating the listing is already oversubscribed per anonymous sources.
• ▶ 13:31 The discussion on the IPO oversubscription analysis is cut off mid-sentence.
• ▶ 13:33 The SpaceX IPO is heavily oversubscribed, with banks closing the institutional order book on Wednesday after market close to gauge demand before pricing.
• ▶ 13:50 The IPO is expected to price on June 11th and begin trading the following day.
• ▶ 13:55 Offering terms: 555 million shares at $135 each, aiming to raise approximately $75 billion.
• ▶ 14:03 A potential SpaceX IPO is discussed with a projected valuation of roughly $1.8 trillion.
• ▶ 14:19 Analyst Will Rhind calls an oversubscribed IPO "the best news possible" for the company going to market.
• ▶ 14:27 Oversubscription signals strong investor demand and positive market sentiment, the opposite of an undersubscribed IPO.
• ▶ 14:39 A key bearish argument against the IPO is that new investors would be providing 'exit liquidity' for early VCs to sell their stakes at huge profits.
• ▶ 14:53 SpaceX is raising about $75 billion at a $1.8 trillion valuation, but the raise is small relative to the company's total size, which could limit the liquidity provided to early investors.
• ▶ 15:08 Rhind concedes the exit-liquidity comment is partly true but stresses that "somebody has to buy the IPO shares" as a normal market progression.
• ▶ 15:30 The genuine risk is the number of pre-IPO shares not subject to lockup and how many could be sold immediately in the first days or weeks.
• ▶ 15:51 This unlocked share supply could have a negative impact on the price, warranting caution for IPO participants.
• ▶ 16:00 Nobody the speaker has talked to can justify SpaceX's $1.8 trillion valuation, except the banks selling it.
• ▶ 16:20 The speaker assumes SpaceX is more expensive than peers, calling it "probably one of the more expensive IPOs ever on a valuations basis."
• ▶ 16:37 Key question posed: Is a high valuation, by itself, a sufficient reason to stay away from the IPO?
• ▶ 16:41 Value-oriented investors should avoid SpaceX; it's not that kind of opportunity.
• ▶ 16:58 This applies broadly to large tech stocks: decide whether to look past today's valuation to future growth or judge the current price.
• ▶ 17:17 Don't get trapped comparing to market averages like the S&P 500; the core lesson is that investors pay for growth if the company delivers.
• ▶ 17:52 The discussion connects the potential scale of the IPO to its implications for the broader market.
• ▶ 17:55 Historical precedents exist for companies claiming the biggest IPO ever, cited as Saudi Aramco and Alibaba.
• ▶ 17:58 Both Saudi Aramco (2019) and Alibaba (2014) raised approximately $25 billion each, and at the time both claimed the record for largest IPO.

• ▶ 18:19 The discussion examines whether big, high-profile IPOs that disappoint after debut signal a market top for the company involved.

• ▶ 18:28 Will Rhind is skeptical of this pattern, citing Alibaba as a counterexample: the tech sector went "from strength to strength" after its IPO, so it did not mark a top.

• ▶ 18:32 On Saudi Aramco, he argues that regardless of the oil cycle at the time, oil is "clearly not going away," so large IPOs should not automatically be read as market-top indicators.

• ▶ 18:45 The market is at or near all-time highs with a "fever pitch" around technology and AI, setting a heated backdrop for a potential SpaceX IPO.
• ▶ 19:03 Predicting how this marquee IPO moment will play out is difficult, which makes SpaceX an interesting case with no clear consensus outcome.
• ▶ 19:16 Investors must make up their own mind: is SpaceX "the next Tesla" or something that could disappoint people?
• ▶ 19:51 The guest has no strong opinion but says betting against Elon Musk is difficult, citing clear IPO demand and calling SpaceX a global phenomenon beyond just U.S. investors.
• ▶ 20:43 Musk’s track record and near-unthinkable progress in commercial rockets, plus Starlink and space-based connectivity, show huge potential; the guest “would not put it past” Musk to have another success.
• ▶ 21:53 The ETF is designed to launch on the same day as the IPO, unlike the normal ~75-day filing process, with a plan to go live that Friday if everything aligns.
• ▶ 23:33 Broadcom's Friday sell-off is the biggest near-term risk; as of Monday, no aftershocks yet, but AI trade remains the central market story.
• ▶ 24:10 Broadcom fell ~8% on weak guidance, triggering a broad semiconductor sell-off; similar "Broadcom moments" from other tech firms would drag down Nvidia and chip stocks.
• ▶ 25:16 Hyperscalers keep raising AI capex guidance, underpinning rising chip demand; the main bear risks are capex cuts or AI efficiency gains that reduce the number of chips needed.
• ▶ 27:00 The Fed meeting is "momentous" as Kevin Worsh holds his first FOMC press conference; no rate cut or hike is expected, making the event about narrative and how Worsh positions himself relative to Jerome Powell.
• ▶ 28:25 Inflation expectations will likely stay elevated through 2025, driven by high commodity and energy prices, causing inflation to run above initial forecasts.
• ▶ 29:47 Precious metals' fall is explained by a reversal of market expectations—shifting from a weak dollar and falling inflation to a stronger dollar, rising inflation, and possible rate hikes both in the U.S. and globally.
• ▶ 31:23 Gold appears to track forward inflation expectations rather than current CPI, leading inflation rather than reacting to it.
• ▶ 31:52 Current gold price may signal that inflation expectations from the Iran conflict will not persist for long.
• ▶ 33:46 IPO clustering is not coincidental; companies need public capital after a decade of easy private funding, and many are AI-driven.

• ▶ 0:00 Intro, Bubble Concerns, and Market Risk (0:00 - 4:59) - - Will Ryan joins to discuss bubble worries, Friday’s Broadcom-led sell-off, and risks from concentrated AI names and growth pricing.
• ▶ 4:59 SpaceX IPO, Leveraged ETFs, and Sponsor Break (4:59 - 8:44) - - Guest weighs SpaceX’s polarizing valuation, outlines planned 2x long and short ETFs, and a sponsor segment covers earning yield on gold.
• ▶ 8:44 SpaceX Business, Bull/Bear Cases, and IPO Risks (8:44 - 19:22) - - Covers SpaceX’s bull case, Starlink-driven revenue, bear-case concerns, oversubscription mechanics, lockup/liquidity issues, and historical IPO precedents.
• ▶ 19:22 Guest’s View and ETF Launch Details (19:22 - 23:29) - - Host presses for a personal stance, Will Ryan gives his SpaceX view and ETF packaging/launch plans, then flags other tech narratives to watch.
• ▶ 23:29 Chip Stocks, Broadcom Guidance, and AI Demand (23:29 - 27:00) - - Looks at post-Broadcom semiconductor risk, drivers of AI chip demand, and how AI efficiency could cannibalize demand.
• ▶ 27:00 Fed Preview, Inflation, and Commodity ETFs (27:00 - 31:04) - - Previews Kevin Worsh’s first FOMC press conference, elevated inflation expectations, GraniteShares commodity ETFs, and a market-expectation reversal.
• ▶ 31:04 Gold as an Inflation Signal and IPO Timing (31:04 - 35:15) - - Discusses gold as an inflation predictor and why multiple large IPOs are hitting the market at the same time.