This is the most out there valuation of

any company you can think of. Like it's

way beyond the valuation of Nvidia and

Nvidia is hugely profitable with massive

margins. SpaceX just isn't. It's you

know, it's a it's a money furnace. In

the long run like any company, the value

of any company is the the cash flows.

Like you're buying cash flows. You're

buying the the profits of a company. Is

there a version of the world where it

could become profitable? Yeah, but it it

doesn't look like an amazing business at

the moment. Like it's a wonderful it's a

cool science experiment, but it's not

obvious how you convert all of this

stuff into into dollars and cents.

Welcome to Profiting Markets. I'm Ed

Elson. It is May 21st. Let's check in on

yesterday's market vitals. The major

indices all climbed more than 1% after

President Trump said talks with Tehran

are in the final stages. Brent crude

declined even though Trump also said,

quote, "We're going to do some things

that are a little bit nasty

if a deal wasn't made." Treasury yields

also stumbled. Tech rallied ahead of

Nvidia's earnings, more on that later.

And finally, speculation swirled all day

in anticipation of IPO filings from

SpaceX and OpenAI. We will get into that

right now. Okay, what's happening?

SpaceX has officially filed to go

public. In a prospectus filed with the

SEC yesterday, SpaceX said it will list

on the Nasdaq under ticker SPCX.

The company is looking to raise $80

billion or more, which would make it the

largest IPO in history.

The prospectus offers the first peek

into SpaceX's financials before the

company goes public on June 12th. So,

lots of numbers to discuss here. Today,

we're speaking with Patrick Boyle,

professor at King's College London,

former hedge fund manager, and host of

one of the most popular finance YouTube

channels. Patrick, thank you so much for

joining us again on the show to discuss

again SpaceX, the filing for which

literally came out about 15 minutes ago,

20 minutes ago. So, we've had that

amount of time to get up to speed on it,

but there are some interesting things

here. I'll just start with some of the

financial data that we learned, $4.7

billion in revenue in Q1 2026, $4.3

billion

in net losses in Q1. Uh revenue grew 15%

from last year, but plenty of other

things that we could talk about. Where

would you like to start? What strikes

you? Yeah, I mean, you know, to be

honest, it's a fairly interesting IPO

document. I mean, I I'm sure you saw the

first 15 or 20 pages were photographs of

rockets, which is a little bit unusual,

and somewhat reminiscent of the WeWork,

you know, IPO document where where there

there were lots of photos in there.

Um you know, other things that were

interesting, the company has lost $37

billion

since inception. There's lots of stuff

There's There's some new business stuff

in there. There's uh you know, there's

talk about point-to-point travel, you

know, where people will be able to

travel from from place to place on

rockets rather than airplanes. Uh

there's talk of I believe I saw in-orbit

manufacturing, or at least manufacturing

on the moon, but I noted down in-orbit.

I'm not sure if that's correct. Asteroid

mining is another business that they

they expect to make money from, as well.

So.

Yeah, I mean, when we spoke with you on

this topic, it one of the things you

pointed out is that the financials here

are just a little bit concerning,

especially if you're looking at a

company that's going to go public at $2

trillion.

That's at least what people are

expecting, close to $2 trillion. One

thing that struck me is they are losing

money, but they also included their

adjusted EBITDA, which they reported was

over $1 billion

in Q1 2026. And I couldn't help but

notice the fact that they, you know, in

order to get to that number, you have to

add back almost $2.5 billion in

depreciation and amortization costs,

which to your point is their whole

business because they're building

rockets. Yeah, cuz it's it's the cost of

the rockets, you know, there's huge R&D

to build the rockets, and then the

depreciation, you know, they put all

those Starlink satellites up there. They

last about 5 years and then they fall

out of the the sky, and so that is your

depreciation. They have to constantly

replace them. So, EBITDA is is not an

interesting number for a company like

this. Like you want to look at

basically, you know, is it profitable or

is it on the path to profitability? Um

it doesn't seem to be. Uh there there's

other stuff in there as well. I don't

know if you noticed that Elon Musk will

get, I think, 85%

of the voting shares.

Um there's uh you know, for he he

doesn't like, as we know, a shareholder

lawsuits, and so that has to go to

arbitration. So, essentially, if you're

buying, like this this is very much uh

an IPO for the Elon Musk fan. Like

you're not necessarily that worried

about profitability. You know, it's sort

of um you know, it's flat It used to be

sort of rockets, now it's rockets,

Twitter, AI, in space, uh you know,

space manufacturing, uh transportation

by rockets and asteroid mining. Uh not

all of these businesses are um

functioning at the moment. Even if you

look at the you know the Starship thing,

but basically they're talking about

hourly launches of star Starships in

order to get I think something like a

million tons of stuff into space per

year. At the moment, you know, I think

the next Starship test is tomorrow. It's

never gone into orbit. It's never

carried any cargo.

I think it's going to carry some dummy

SpaceX satellites tomorrow. You know,

this is very much a vibes-based IPO.

Like it's it's for people who are

excited about Elon Musk. It's not really

for for people who are going to script

through the numbers and ask questions

about profitability.

Yeah, just on that point, some of the

company statements that we saw at the

top of the document, the mission of this

company is to quote "Ensure

species-level redundancy and that the

light of consciousness will not be tied

to a single planet." It's also to quote

"Understand the true nature of the

universe to ensure that humans don't

have the same fate as dinosaurs." By the

way, that that phrase "the light of

consciousness" is mentioned 10 times in

the filing and AI is mentioned over

1,200 times in the filing. Just looking

at profitability again,

they break out each of the businesses

into space as a business, connectivity

which is like satellites, and AI.

Space lost $662 million in Q1.

Connectivity turned a a $1.1 billion

profit, and it seems that actually the

satellite business is pretty good. AI

lost $2.5 billion.

And that really struck me that maybe

this AI thing is perhaps the problem.

>> And I think that's per quarter, isn't

it, that loss?

>> That's the quarter. That's the quarterly

number. And and I think that was growing

as well. Like the the loss from AI is

growing. And the whole story of SpaceX,

it's no longer about space flight. It's

no you know, it's kind of about this

data centers in space idea. And you

know, there there are a lot of people

who've done research. It's it's not

clear why it would be cheaper to put a

data center in space than somewhere on

the earth. It might be cheaper to put

one on the bottom of the sea. It's not

clear why this is necessary, but

um I think it's a mistake to ask too

many questions about this. You just have

to go with your feelings, you know.

>> [laughter]

>> So, this I mean,

what do we think this will mean for this

IPO? I mean, they're looking to raise

$80 billion, biggest IPO in the history

of business. Mhm. But it sounds like you

are not really convinced at all. I

struggle to be convinced. I like the

idea of space travel. I'm excited by

sci-fi stories in general, but I mean,

looking at these numbers, personally

this seems insane. What do you think

this means for the IPO? Do you think

that this stock will actually perform

well? You know, I firstly, I think

they're kind of rushing it out largely

because it's burning so much money,

right? Like $37 billion in losses since

inception. And you know, the VCs and

whatever only want to keep putting more

money in

for so long. And there's there's a very

hot market right now, you know, S&P is

near highs. And um and people are

excited by Elon Musk stuff. They're also

excited about AI. And the I think you

know, Elon for years said that he would

never uh take SpaceX public until he had

reached Mars. I think till there was

like a colony on Mars. Um so, we're a

little bit early for that. I think the

real reason is just

VC funding is kind of drying up for this

sort of stuff. Uh they they've you know,

this is worth a lot and they want their

money back. On top of that, you've got

big IPOs coming from OpenAI and coming

from Anthropic. And even, you know,

there's an argument, uh you know, they

basically want to get out first because

the question is will there be appetite,

you know, if if uh if investors have to

liquidate something in order to buy

these new things. At at what point do

they not necessarily want to buy the

next AI thing coming out. So, I I think

to a certain extent this is a race to

get this stuff out uh before the others.

For the people listening who are fans of

SpaceX and who plan to maybe purchase

uh this IPO or believe in the company, I

mean,

what what is your honest bull case for

this company? Like, in what world, what

would it take for this company to make

sense

um and for it to be, you know, a a

profitable and sustainable business that

is worth investing in? Um well, a much

lower price to start with, but that's

that's not what's going to happen,

right? Because of course, this is the

whole thing with investments. Like, it's

the you you're buying a thing and the

question is how much are you paying for

the thing? And this is the most out

there valuation of any company you can

think of. Like, it's way beyond the

valuation of Nvidia and Nvidia is hugely

profitable with massive margins. SpaceX

just isn't. It's, you know, it's a it's

a money furnace, right? Especially with

all this uh you know, xAI, the AI

company, you know, I think he paid 250

billion for it. Like, uh SpaceX bought

that from Elon Musk. Then, within a few

weeks he announced that the tech stack

within um within xAI was not working.

Basically, it wasn't very good and it

had to be rebuilt from the ground up.

And he said, "Well, that happened with

Tesla as well." And it's like, "Yeah,

but you just you just got people to pay

$250 billion for this, right? They

bought it from you. And so,

you know, this is you know, the thing is

would I bet on the price falling? I

mean, in the long term, yes, just

because I think it this sort of

gravity can only be

overcome for so long. But, you know,

there's the funny thing as last time we

spoke, we spoke about the Nasdaq

conclusion. So, 15 days after the IPO

passive investors, whether they like it

or not, will become shareholders.

And that is an incentive even to get in

at the IPO cuz you know, 15 days later

there's new bag holders to take it off

your hands. In the long run, like any

company, the value of any company is the

cash flows. Like you're buying cash

flows, you're buying the profits of a

company.

You know, is there a version of the

world where it could become profitable?

Yeah,

but doesn't look like an amazing

business at the moment. Like it's a

wonderful it's it's a cool science

experiment, but that doesn't mean that

you know, it's not obvious how you

convert all of this stuff into into

dollars and cents.

You mentioned earlier the other company

that is set to go public, which we

actually just learned is going to go

public as of yesterday. That is OpenAI.

There were questions over whether this

was going to happen. Even the CFO was

saying that we needed more time, that

the company needed more time before it

goes public, but apparently now that the

Elon trial is out of the way, they are

going to go public. Just before we let

you go, I'd love to just get your top

line thoughts on OpenAI as a business,

your expectations for this IPO, and then

hopefully we can have a longer

conversation about it at some point,

too. Yeah, I mean, you know, once again,

all of this AI stuff, it's it's really

early in this business, and it's really

hard to know who the winners and losers

will be, you know. So, the question with

OpenAI, with Anthropic, with any of

these is sort of are they the sort of

Google of search, you know, or are you

investing in the Yahoo or the AOL or

whatever, you know, because

>> Yeah. being first doesn't necessarily

make you the big winner.

Um you know, it's it's not something

that I'm excited about just because it's

kind of a roll of the dice and a hope

and pray kind of thing. You know, also,

it's not obvious even if AI is a huge

productivity booster, it's reasonable to

think it could boost the pro the the

productivity of all the people using it,

but that doesn't mean they get to charge

that because there's sort of 10 models

out there. They're all reasonably

equivalent to each other. And so, the

question is will AI be a winner-take-all

model like the way internet search was

or will we have kind of 10 You know,

it's a bit like Uber, you know, where

there's sort of you know, in every part

of the world there's Uber and then

there's a few other ones. And the

problem with if there's always a few

other ones, you never really get to

crank up your prices. And so, people

benefit from the affordable taxi rides,

which is great, but the companies

themselves never get that profitable.

So, with these huge valuations,

the assumption is that one of these

things is going to is going to win the

whole market and is going to be able to

charge an awful lot of money for for

their services in the future. Very

exciting time in the IPO market. I mean,

it's just incredible what we're going to

see this year.

>> years people have been saying, you know,

there's no companies going public. In

fact, they were all going private,

right? And for And also, people said,

you know, all these companies, they're

hoarding cash, they're not investing.

Now we've got all of you know, big tech

are spending a fortune on on building

data centers and all of this stuff. And

we've got all of these companies going

public. So, um you know, people wanted

to do Yeah, but but the scale of them is

sort of beyond uh anything we've seen

before. So, uh people are getting what

they want, which is the opportunity to

invest in this stuff. And um and these

companies investing in stuff rather than

hoarding cash. Yeah, big win for the

bankers that are underwriting these

companies, too. Patrick Boyle is a

professor at King's College London and a

former hedge fund manager, and he is the

host of one of the most popular finance

YouTube [music] channels. Patrick, thank

you so much for joining us again.

Appreciate it. Yeah, thank you for

having me on. Bye.

We'll be right back. And if you're

enjoying the show, be sure to subscribe

to the Prof G Markets YouTube channel at

the link below.

>> [music]

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We're back with Crofty Markets.

Nvidia posted earnings last night and

the entire economy was watching. The

chip company had beaten earnings

expectations for 18 of the previous 20

quarters and this time [music] was no

different. Total revenues came in at

over $81 billion

up 85% from the same period last year

and beating analyst expectations. Nvidia

also authorized an $80 billion stock

buyback and a massive dividend hike

signaling a confident outlook for

quarters ahead. Still, investors weren't

entirely impressed. The stock whipsawed

after hours. So, here to give us a

breakdown on Nvidia's earnings, we are

speaking with Zed Francis, CIO and

co-founder at [music] Convexitas. Zed,

thanks so much for joining us. Just some

of the numbers here, $81 billion in

revenue up 85% year-over-year. The data

center revenues up 92% year-over-year.

Just these numbers are just astounding.

Give us your initial read on these

Nvidia earnings. Yeah, I mean,

ultimately, Nvidia has turned into an

established veteran company in

comparison to what it was a handful of

years ago. So, as you alluded to, the

beat and raise is basically what's baked

in the cake. That's what everybody is

expecting at this point cuz that's what

they've been doing in the past. And we

see this stock moving but kind of benign

ultimately. Like, I I'm a volatility guy

at the end of the day and the options

market was pricing in a 5 and 1/2% move

in Nvidia on these earnings and, you

know, the entire range of after hours,

we're obviously well inside of that. So,

I think we're kind of the point where in

Nvidia is the the new Apple. Almost they

it's just a boring event even though it

used to to the main show for the last

handful of years. Right. Yeah,

in that sense, I mean, the fact that

they are authorizing $80 billion in new

buybacks, they're raising the dividend

from 1 cent to 25 cents per share. I

kind of see that and I and I love that.

It's like they're they're owning the

fact that they are an established

profitable company and it does seem

quite Apple-like in that regard. Did

that stand out to you, the fact that

they are returning that money to the

shareholders? Yeah, no, I mean, it's

it's a very interesting sector, right?

Cuz ultimately, semiconductors are

viewed as hyper cyclical, but Nvidia has

kind of disrupted that concept over the

last handful of years, right? It's And I

bring up Apple because I think it's a

reasonable parallel. Like, Apple started

as hardware, then started building their

network and then started building

services. So, even though hardware is

the main driver of Apple's business in

terms of top and bottom line, there's

more confidence in reoccurring revenue

from that business than a traditional

cyclical hardware company. And Nvidia is

trying to follow that game plan and has

recently been successful over the last

couple of years to establish that

concept with the market as a whole. And

the reason they're kind of like able to

do that is they're the highest value add

in their space and a decent amount of

why folks are purchasing, you know,

their chips versus somebody else outside

of them you know, having the spread in

comparison to SMIC in terms of the value

add is also software. So, they're

they've been trying to make that pivot

to have the market view them as more

reoccurring revenue business rather than

a pure cyclical, which traditionally the

semiconductor space has been. Yeah, what

is what is the argument on that front?

Because, I mean,

on the one hand, they're just printing

money right now, but so are many of sort

of the memory stocks, sort of the

SanDisk as an example. And the concern

there is, you know, every this is

there's a gold rush for data centers

right now. Everyone's trying to build a

data center. Once they're built, though,

maybe that's it. At which point

what is Nvidia going to sell? Is that a

concern for the company? Is that

something that they are addressing and

talking about?

>> Yeah, and

you bring up a fair point. It's very

much a barbell industry within the same

exact sector. So, you have you have

Nvidia trying to become less cyclical.

They're definitely the least cyclical of

the group. And the memory guys on the

other side are the most cyclical. So,

what what does that mean in terms of

valuation and how you think about the

business? Well, Nvidia has more

forecastable

revenues in the out years beyond, you

know, years 1 2 3. And so, because of

that, years ago they were the first

mover in terms of valuation because

people gain confidence in the you know,

out years, you know, the years 3 plus

and their ability to produce those

revenues. And thus, you get a a higher

valuation. If if folks believe that a

decent amount of your ability to produce

those earnings is actually reoccurring,

then you're naturally going to get a

higher valuation, which is exactly what

happened with Apple again from kind of

2013 through life. It went from 18s PE

stock to a, you know, mid-20s plus

simply because the confidence of those

reoccurring revenues were growing. And

Nvidia's trying to follow that path.

Opposite side, those memory folks, yeah,

they have a cliff, right? And you know,

it is a purely commoditized business.

For right now, they're on the right side

of the supply-demand dynamic where

they're raising prices dramatically,

expanding those margins, but the

market's belief is there is a hard cliff

where eventually they will go back, you

know, to where they were before. And

that's why when you look at a, you know,

a Micron, their forward PE is like a

12-ish, but ultimately that's because,

well, we we have confidence in the next

18, maybe 24 months of earnings, but

after that, very, very little

confidence. So, it's all about

discounting what we know right in front

of us versus that longer-term kind of

DCF valuation of something with

reoccurring revenues.

What do you make of the Nvidia valuation

at this point? I don't have the

multiples in front of me, but the

stock's trading at around $220

a share. It's up 18%

year-to-date. It's up 66% in the past

year. Uh

how are you feeling about the valuation

at this point? Yeah, I mean, it's a

forward valuation in mid-20s is about in

line with the S&P, technically a little

lighter than the market as a whole. So,

it still has a little bit of that

cyclicality priced into it, but I would

say it it's in the reasonable realm. You

know, we're we're It's a, you know,

largest company in the world. It's tough

to grow exponentially, even though they

continue to do so in the short term,

when you're this large. Where the memory

folks are on I'm on the opposite end.

It's the expectation of that massive

decline in earnings has successfully

been pushed out over the last, you know,

6 7 weeks, and that's why we've seen

massive moves in those specific stocks,

but they're always going to be

hyper-cyclical, where the earnings that

you're going to, you know, hopefully

earn as a shareholder are right in front

of you, rather than over the next, you

know, couple of decades. Yeah. Final

thing that is kind of interesting, no

shipments of chips to China this quarter

from Nvidia. They shipped four four and

a half billion dollars in the year

before. I mean, this in context with

Jensen Huang jumping on the plane with

President Trump going to China. I

believe that was last week. I think

that's right.

Um

do we learn anything on the China front?

Is China going to be a business for

Nvidia? Is it not? Where are we on this?

Well, I think we're a little in between

whether or not China's actually

receiving the end product via different

routes rather than directly.

That might still be happening on the

side, but it is a potential growth

engine, right? If we actually get some,

you know, more level-headed

relationships with China, that may

reopen that market directly for them.

But, I wouldn't be surprised if they're

getting a decent amount of that revenue

through other sources. Zad Frost is the

CIO and co-founder of Convexitas. Zad,

thank you so much for breaking down

these Nvidia earnings. We appreciate

your time. Thanks for having me.

We'll be right back. And if you're

enjoying the show, be sure to subscribe

to the Propty Markets YouTube channel at

the link below.

>> [music]

[music]

>> We're back with Propty Markets.

More news in the world of financial

corruption. Trump and his family have

been granted forever immunity from

investigations and audits by the IRS.

This comes after Trump withdrew his $10

billion lawsuit against the IRS for

allegedly disclosing tax information

without information.

Now, per a pledge from the Department of

Justice,

the US government will, quote, be

forever barred and precluded from

prosecuting or pursuing tax claims

against Trump or his family. In the

words of the DOJ, Trump has been forever

discharged from any tax crimes.

Now,

at [snorts] certain points,

there's just not much commentary I can

even provide here. I mean, I can tell

you that this is corrupt. I can tell you

that this is what dictators do. I can

tell you that this appears to be illegal

and

if it isn't then it should be.

But you already know all of that.

I mean there's nothing more that I can

reveal by analyzing what the headlines

are already telling us because the

headlines speak for itself. Trump has

taken control of our government. He

defunded the IRS. He defunded the DOJ.

He fired the SEC director who tried to

investigate his insider trading. He

personally canceled 160 different

white-collar crime investigations in 1

year.

Those white-collar crime prosecutions

have hit a record low this year. And now

he has coerced the DOJ into banning the

IRS from investigating or auditing his

tax claims for the rest of time.

Forever.

Was that term

Do I really need to

argue why that's bad? Do I need to

present my case on why that shouldn't be

happening?

I don't really think so. I think either

you hear these facts and you acknowledge

them or you hear these facts and you

ignore them.

Or you say they're not a big deal or you

just deny that they're even true.

So the only thing

that I can really do here in yet another

corruption scandal, the only thing that

is even remotely valuable is to just

tell you what happened.

To tell you the headlines and that's

what I'm doing. I'm telling you what

happened.

Now in the context of markets, I can

explain why this is bad. It erodes faith

in the system of markets. It creates

this belief that for a certain set of

people the rules of markets and

regulations do not apply and in this

case that is true. And it also just

makes Americans assume, correctly by the

way, that the system is rigged. But,

I hesitate to even make that argument

because I just don't see how you could

conclude that this kind of corruption is

anything but bad for everyone.

And so, I end this episode to tell you

I have nothing to add here.

This is just another day

of unprecedented corruption

in the Trump administration, the likes

of which we have seen over and over and

over

>> [music]

>> again. You either acknowledge what is

happening

or you don't acknowledge it.

But, I am not going to be the one

[music]

to make you care.

Thank you for watching Crooked Markets

from Crooked Media. If you liked this

episode, subscribe to our YouTube

channel and tune in tomorrow for a

conversation about taxes

>> [music]

>> with Ray Madoff.

>> [music]