Lol, America, 60% of homes cost less than $250k in Fla? 92% cost less than $500k. You can't buy a starter home for 500k in some parts of Canada. Most humble, old, family homes with little yards in a small city about an hour or two away from a bigger city are around $800k or $1m ($600-700k USD).
(Reason is mass immigration policy and very small new home construction numbers, partially because government policy doesn't encourage it), for decades.
Before, Musk and SpaceX were in satellites (Starlink) and rockets, but now they're in AI, which is very capital intensive, Eisman said. It's not like software where you just have some labor and servers and you make money. AI costs money.
Google spent $90b last year on AI, which it did from its cash pile, but this year it's doing $180b so it has to raise capital and stock. Rumors Meta and Microsoft are doing this, which means a tech shift from asset light to asset intensive.
Despite massive spend, the products aren't different from each other. And really, the chatbots ime are the same as GPT3.0 in December 2019. Cursor is better, so you can code things that way, but you have to be step-by-step with it and constantly check its work.
There are no moats. What's being created is a commodity, it seems to Eisman.
For these past few years, companies have charged for tokens way below the cost for the company of those tokens. Github is now starting to actually charge real prices. (Comparable with Uber?)
Everyone thinks Musk will buy Tesla (SpaceX will buy Tesla) with the money from the IPO, but Eisman notes Tesla customers have declined steadily, that EVs aren't a great business, that it's a capital intensive business also, competitive, have to compete with China.
He expects everything's baked in. TAM of $28.5t (almost same as US GDP). But there is momentum play.
OpenAI and Anthropic are also expected to IPO. $4t added to the stock market (the US stock market $70t), with these three IPOs. Fast tracked 'Giga-IPOs'. These firms all need a lot of capital to invest. Do their current stock owners want to sell stock to the public rn? Is it the best time to do so? The public is excited about AI companies.
Index funds (that automatically track them) might have to buy these while they're still very volatile. After the trillions from the indexes, will the shares fall because the natural buyers won't be there?
IPO companies tend to underperform the market by like 20% for the first 3 years, and even more so when revenues for the company are low compared to the value. (It is good for those who owned the shares before the IPO ie hedge funds.)
Is the US stock market at a peak rn?
Very successful companies tend to stay private. They go public after they achieve their outstanding success or growth.
How much bigger can SpaceX get than $1.75t? How can it create another trillion of value?
People haven't been interested in any crypto recently. Eisman said the people who were trading crypto have moved to the prediction markets (gambling/investing/skill-based). Also, it has been about 4 or 5 years since the big crypto trend, when governments were printing money, when Robinhood was new and not everyone had a trading account yet. It might have just become passe. Nothing has changed though about the need for crypto-blockchain to replace current (expensive) money transfers.
Looking at the Bitcoin to USD chart though, it's come down quite a bit, looking like the pattern of previous cycles in the currency, if it trends up in value again.
Anthropic is estimated value at $950b. OpenAI at $850. Not sure how that's possible.
Niles says Google wins in search and in consumer (Google has the complete stack), and in AI overall. Amazon wins in commerce. Anthropic can win in corporate.
SpaceX opened at $150 officially (the offer price had been $135) on NASDAQ, and it was bought up to $175. SpaceX's total valuation now put at $2t. SpaceX has a current estimated value of max $190 min $165, according to Wall Street.
I think the private market was buying shares for like $75 during the week. There's not the standard IPO 6-month lockup on selling stock (partially because it's a 24 year old company), but there are some limitations, reportedly.
Musk's holdings. Almost at the 'fourth comma'.
Tesla state and options $260b. SpaceX $690b. Neuralink, Boring, et al $20b.
$1t today. That's equivalent to $25b in the year 1900. It would be $41b in 1932, the year before the US went off the gold standard.
Rockefeller in 1913 had $900m to 1.4b at his peak (would be worth $30b today). But Rockefeller's worth was 2-3% (other estimates say 5%) of US GDP. $1t today is 3% of US GDP. The US national debt is currently $40t ($11t added over the recent 5 years).
'Wall Street has a printing press too, just like the Fed.'
'Is SpaceX worth $1.77t' asked the NYT, because xAI seems to be changing its business model from developing models like Grok to becoming a neocloud (a commodity business so less valuable).
Buying chips from Nvidia or someone, and leasing them to Anthropic or someone. A finance business. A rate of return business.
'Is it Elon premium x 2? or is it Elon premium / 2 ?'
'Starlink is a real business. It's worth a couple hundred billion.'
Is the answer that their product has been done for decades, and that sport itself is no longer cool?
In the early days of online books selling, bookstores would just put their books on sites and put whatever price they had been asking for in the store. This meant book collectors could get rare books for cheap, like paying under $15 for something that might be worth $1000. But from 2006/2007 things went worse for book buyers. Rather than using their own knowledge, built up over decades, sellers would just look for what other sellers were listing the price as, and modify their price based on book condition.
The peak of difficulty for buyers was 2012. Since then, there are 3 big online book sellers in the UK, and they have stock of 1-2m books each, they don't have staff to look at each book and appraise its value, and the staff they have don't usually know a book's true value. So he regularly now finds books for $10 which are worth $50.
Around 1:10. A study of the economics of data centers, when we started planning them and a few years later. Much more expensive, and all kinds of dynamics.