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Why the SpaceX IPO Could Shake Up Every Investor’s Portfolio · The Financial Exchange Show

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Speaker 1: making a donation today. This is the Financial Exchange with
1:05
Speaker 1: Chuck Zada and Paul Lane.
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Speaker 2: Chuck, Paul, and Tucker with you here. No it's not Tucker,
1:13
Speaker 2: it's Ben.
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Speaker 3: Sorry.
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Speaker 2: I wasn't looking at you, Ben, Otherwise I wouldn't have
1:16
Speaker 2: made that mistake.
1:19
Speaker 3: Just reflex, just yeah, we miss you, Tucker.
1:22
Speaker 2: Force a habit. No, No, Ben, Ben's Ben's crushing it today.
1:25
Speaker 2: This is great. Not that we don't miss Tucker, but
1:27
Speaker 2: we like Ben too. And so you know, it's it's
1:32
Speaker 2: we're a big tent show. There's there's room for multiple
1:36
Speaker 2: Ben's and Tucker's under the tent. Unfortunately, there's not room
1:41
Speaker 2: for stocks to go up through this part of the
1:43
Speaker 2: trading day. And the S and P five hundred's currently
1:45
Speaker 2: off a very modest thirty three points, you know, half
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Speaker 2: a percent. Uh, don't be one of those people who's
1:51
Speaker 2: you know, bearished and after the market's gone up ten
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Speaker 2: percent in the last month and be like, oh, look
1:55
Speaker 2: what's happened? Guys like sorry, like you gotta you gotta
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Speaker 2: call it out. Is the S ANDP has got up
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Speaker 2: the last nine days. Uh, and it's it's gonna take
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Speaker 2: a breather at some point, and today so far looking
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Speaker 2: like it might be that day. So S and p's
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Speaker 2: off thirty three points, Dows off four to thirty three,
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Speaker 2: nasdak can posit off one fifty three. It's about a
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Speaker 2: half percent to three quarters of a percent downward move
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Speaker 2: in your major indices. Ten, your treasury is up three
2:21
Speaker 2: basis points to four point four eighty five. Quite honestly, ten,
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Speaker 2: your treasury been really boring over the last week after
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Speaker 2: some excitement earlier in the spring. But we've basically been
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Speaker 2: hanging out in that four point five percent range for
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Speaker 2: you know, five or six days now, and that's back
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Speaker 2: to kind of where it was, you know, late April,
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Speaker 2: late May. We had this brief spike up to like
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Speaker 2: four to seven in the middle of May, but we're
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Speaker 2: we're back around four or five right now and kind
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Speaker 2: of waiting to see what the next move is. There
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Speaker 2: other things on the move today, the dollar index strengthening
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Speaker 2: up point two percent to ninety nine thirty eight. Gold
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Speaker 2: is off thirty four to thirty and ounce to forty
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Speaker 2: four eighty five. Gold another one that quite honestly, has
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Speaker 2: just been really boring lately, just not really doing much
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Speaker 2: of anything. It's kind of been a slow, steady decline
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Speaker 2: for the last two to three weeks going from about
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Speaker 2: forty six hundred to forty four to fifty. So yeah,
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Speaker 2: it's maybe you know slid you know, two to three
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Speaker 2: percent during that time, but just nothing, nothing too significant
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Speaker 2: after you know, some some really big moves last year
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Speaker 2: and big downward moves to start the year off this year,
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Speaker 2: and finally crude oil is up one fifty three a
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Speaker 2: barrel on West text Intermediate to ninety five twenty nine.
3:43
Speaker 2: I do want to at some point in a little
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Speaker 2: bit we'll talk about what the latest EIA, the Energy
3:50
Speaker 2: Information Administration Weekly crude data showed. I've had a chance
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Speaker 2: to go through it, and as you would expect, we're
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Speaker 2: continuing to see large inventory draws. But are story this
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Speaker 2: hour is SpaceX. They are now just weeks away from
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Speaker 2: an IPO, and we're starting to get more details in
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Speaker 2: terms of exactly what we're looking at where they're offering. Reportedly,
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Speaker 2: according to Reuter's, five hundred and fifty five point six
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Speaker 2: million shares one hundred and thirty five dollars a piece
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Speaker 2: for a seventy five billion dollar IPO. Again, this would
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Speaker 2: put them in the range of you know, one point
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Speaker 2: seventy five trillion dollars and I gotta say, I got
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Speaker 2: to hand it to Google yesterday. I guess Alphabet basically
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Speaker 2: trying to front run this, saying, hey, we want to
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Speaker 2: do an eighty billion dollar equity raise ourselves, and here's
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Speaker 2: here is the thing. Like, it's pretty clear that these
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Speaker 2: companies are looking at the picture right now saying, hey,
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Speaker 2: we got to get it while the demand is good
4:51
Speaker 2: for our equity.
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Speaker 3: Yep.
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Speaker 2: And it's not to say that like equities are destined
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Speaker 2: to collapse, but Google doesn't do that if they don't think, hey,
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Speaker 2: this is not going to be a problem, because it's
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Speaker 2: probably about as good of a deal as we can
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Speaker 2: get offering additional equity of our own in a capital
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Speaker 2: race instead of doing another eighty billion dollar dead offering.
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Speaker 2: But SpaceX now just a couple weeks away here.
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Speaker 3: Yeah, so a lot to unpack here. Obviously, this IPO
5:21
Speaker 3: is probably the most hotly sort of discussed ipo I
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Speaker 3: can recall, at least since Facebook. In terms of dollar amount,
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Speaker 3: it's going to be twice as big as the last
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Speaker 3: largest IPO, which was Sadi Iuranko back in twenty nineteen,
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Speaker 3: where they raised twenty nine billion, which seems paltry by
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Speaker 3: these numbers that we're talking about today between Google and SpaceX,
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Speaker 3: you know, just grabbing a quick seventy five or eighty
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Speaker 3: billion through these offerings. I mean, ultimately, with SpaceX, as
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Speaker 3: much as the there is so much chatter about it,
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Speaker 3: they are commanding a huge premium. And I know that
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Speaker 3: there are a lot of listeners out there and a
5:59
Speaker 3: lot of people who may have invested in Tesla and
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Speaker 3: done tremendously well. And not to say that Elon Musk
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Speaker 3: hasn't been a tremendously successful entrepreneur, but this is a
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Speaker 3: is going to be a price cipo for sure. There
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Speaker 3: is a tremendous amount of appetite for it. They're pricing
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Speaker 3: themselves at sixty seven times their sales, whatever metric you
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Speaker 3: want to look at. You know, they lost SpaceX as
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Speaker 3: a company five billion dollars in twenty twenty five. And
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Speaker 3: this market cap that they're projecting to list at one
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Speaker 3: point seventy five trillion, for comparison's sake, that's close to
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Speaker 3: around it's actually slightly bigger than what Meta or Facebook
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Speaker 3: is in terms of market cap at this moment, where
6:36
Speaker 3: they're around one and a half trillion. Meta does about
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Speaker 3: two hundred and fifteen billion of revenue over their last
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Speaker 3: four quarters and ninety billion dollars of earnings. Like I
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Speaker 3: just mentioned before. You know, SpaceX lost five billion dollars
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Speaker 3: in twenty twenty five, and their revenue numbers I don't
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Speaker 3: have my finger tips, but I think it was like
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Speaker 3: sixteen or seventeen billion. So that doesn't mean that the
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Speaker 3: company can't be quite successful. But you're gonna pay, you know,
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Speaker 3: a significant premium to get it. And that's what Tesla's
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Speaker 3: story has been, the elon premium to a degree. It's
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Speaker 3: gonna be fascinating to see how this plays out.
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Speaker 2: Check the Here's where I generally land on this. Look,
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Speaker 2: if SpaceX wants to IPO and say yeah, we're you know,
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Speaker 2: if if they can get investors, you know, after the
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Speaker 2: IPO to be like, yep, you're a one point eight
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Speaker 2: trillion dollar company or two or two and a half,
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Speaker 2: I think that's fine. Likes, that's the free market, that's
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Speaker 2: the capitalist system. They go have at it. Uh. The
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Speaker 2: piece that is bothersome to me is the indices bending
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Speaker 2: over backwards to allow SpaceX to be included within like
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Speaker 2: the first couple of week days. Yeah, I'll give you
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Speaker 2: an example, the S and P five hundred just as
7:48
Speaker 2: an example, right now, you have to have minimum share
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Speaker 2: volumes traded for six months prior to being even evaluated
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Speaker 2: for index inclusion. Right now. The public float, meaning what
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Speaker 2: percentage of your shares are actually available, needs to be
8:03
Speaker 2: at least fifty percent of outstanding shares, and we're gonna
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Speaker 2: be nowhere near that on this It's gonna be I believe,
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Speaker 2: like five to seven percent of what we're looking at. Profitability.
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Speaker 2: S and P five hundred requires companies to have positive
8:14
Speaker 2: earnings in the most recent quarter and the foremost recent combined,
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Speaker 2: and you've got to have you know, audited financials and
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Speaker 2: YadA YadA. But SpaceX, through basically lobbying these indices is
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Speaker 2: saying is getting them to say, no, we can include
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Speaker 2: you even without these things. And that's gonna end up
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Speaker 2: resulting in S and P five hundred funds and other
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Speaker 2: index funds where these get included to be required to
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Speaker 2: buy them. And the problem, in my opinion, is not
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Speaker 2: that SpaceX is going public, because look, if you're if
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Speaker 2: you're a company that says we want to be in
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Speaker 2: public markets, you can do it at any size. And
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Speaker 2: if you get enough appetite for your shares. Great. The
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Speaker 2: problem now is going to be that not every investor,
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Speaker 2: because not everyone owns you know, S and P five
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Speaker 2: hundred index funds.
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Speaker 3: But that's majority. I'm going to go.
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Speaker 2: Out on a limb that ninety nine point nine percent
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Speaker 2: of four one K investors and you know, probably north
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Speaker 2: of ninety percent of individual investors are now going to
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Speaker 2: end up being stuffed with you know, two percent of
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Speaker 2: their index in SpaceX stock, even though they don't necessarily
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Speaker 2: want to buy it, and it's not a profitable company yet,
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Speaker 2: it doesn't have sufficient public float and doesn't have any
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Speaker 2: trading history, and that feels kinda not great to me
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Speaker 2: because it's not allowing investors to make an informed decision
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Speaker 2: about it, and it's not allowing the S and P
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Speaker 2: five hundred, which I know everyone thinks the S and
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Speaker 2: P five hundred is just this you know index, and
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Speaker 2: we always say, oh, like it's passive. No, like, the
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Speaker 2: S and P five hundred is an active index. It
9:54
Speaker 2: just has very strict criteria for what gets in and
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Speaker 2: then what would have to happen for something to move out,
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Speaker 2: and so there's no a lot of movement in or
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Speaker 2: out of it typically, but it's absolutely still an active process.
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Speaker 2: It's just one that they manage in a very specific,
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Speaker 2: very tight way. And my problem is just that, Hey,
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Speaker 2: if you're waiving all those things for this, you're kind
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Speaker 2: of turning the general public into unwilling bag holders because
10:23
Speaker 2: they don't have any way to escape it. Like you're
10:25
Speaker 2: not going to just have like the proliferation of like
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Speaker 2: S and P five hundred x SpaceX ETFs that pop
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Speaker 2: up in stuff like that. And so I don't love that,
10:37
Speaker 2: given the concentration that you're picking up in it. But
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Speaker 2: I get that this is just like where we are now.
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Speaker 2: And maybe I'm just you know, a hoity toity, you know,
10:49
Speaker 2: old school get off my lawn. That cloud is you know,
10:52
Speaker 2: in my way, you know, person yelling. But I don't
10:56
Speaker 2: love that. I think it. Look, if you want to
10:58
Speaker 2: listen to your company and have a trade on public
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Speaker 2: market's great. But index inclusion, given how many of these
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Speaker 2: things it misses, doesn't sit well with me.
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Speaker 3: Yeah, it's interesting to think about that though. When you're
11:11
Speaker 3: buying an S and P five hundred fund, it is
11:13
Speaker 3: a passive fund. It's an active process that is put
11:15
Speaker 3: together to assemble those companies. Standard impoors takes the time
11:20
Speaker 3: to establish these procedures, and the reason why that approach
11:24
Speaker 3: has been successful for investors is that Standard Imports has
11:27
Speaker 3: done a very good job of creating a slice of
11:31
Speaker 3: that is representative of the US economy over its history.
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Speaker 3: And that's why the proliferation of passive investing through Vanguard
11:39
Speaker 3: and other companies out there has become so prevalent. So
11:43
Speaker 3: there is a responsibility on their end because they're guiding
11:47
Speaker 3: so many investors out there to try and keep their
11:50
Speaker 3: due diligence. And this does seem like bowing a little
11:54
Speaker 3: too quickly, like why not allow space sex to continue
11:58
Speaker 3: to trade and meet your traditional criteria? Why bend to them?
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Speaker 3: I I do tend to side with you a little
12:04
Speaker 3: bit on it, and then if people want expose it
12:06
Speaker 3: to it, there's plenty of other ETFs where you can
12:08
Speaker 3: buy or you can just go buy buy Space, or
12:11
Speaker 3: you can buy you know, a different ETF that captures it.
12:14
Speaker 2: Like if you want to make a market cap weighted
12:16
Speaker 2: portfolio of your own great own the S and P
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Speaker 2: five and S and P five hundred, you know ETF
12:22
Speaker 2: for mutual fund, sell two percent of it and go
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Speaker 2: buy two percent of SpaceX if you want, but to
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Speaker 2: have it just like stuffed in there with no publicly
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Speaker 2: traded track record or profitable.
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Speaker 3: And limited liquidity too, like that five percent outstanding share
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Speaker 3: float is it's it's concerning.
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Speaker 2: And the reason why this matters what happens when those
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Speaker 2: lockups end and you see potentially volatility as a result
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Speaker 2: of that. I want to touch on that more when
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Speaker 2: we come back. Uh, someone went and pulled like a
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Speaker 2: whole list of recent big I pos and I want
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Speaker 2: to talk about just what we've seen from them in
13:02
Speaker 2: their first year of trading. So let's take a quick
13:04
Speaker 2: break and we'll discuss that when we return.
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Speaker 3: I am so disappointed that I don't know that answer,
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Speaker 3: because we have that book in my house, and I've
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Speaker 3: definitely read it within the last couple months.
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Speaker 2: I have a pretty good sense of where it is.
14:30
Speaker 2: But my confidence level is like forty eight percent. Uh.
14:37
Speaker 2: Let's see what were we gonna talk about here? Oh
14:39
Speaker 2: that's right, IPOs, So UH for those of you, we're
14:44
Speaker 2: talking about SpaceX. And one of the things that happens
14:46
Speaker 2: with every IPO is that UH insiders and UH current shareholders,
14:54
Speaker 2: like before the IPO, namely, you know, mostly employees of
14:57
Speaker 2: the company. They have lock up periods in which they
15:00
Speaker 2: are not allowed to sell their stock immediately. Those lockup
15:04
Speaker 2: periods generally range from anywhere from ninety to three hundred
15:07
Speaker 2: and sixty five days. One hundred eighty is a pretty
15:10
Speaker 2: common one. And what you do see is sometimes before
15:15
Speaker 2: the lockup expires, in anticipation of it, sometimes after due
15:18
Speaker 2: to the selling from it. Many IPOs go through significant
15:24
Speaker 2: first year draw downs. And this also typically happens without
15:28
Speaker 2: them being in any major index because a lot of
15:32
Speaker 2: IPOs either aren't profitable or have questions and so on
15:35
Speaker 2: and so forth. So these drawdowns don't typically impact the
15:38
Speaker 2: major index because they're not in it. Uh, Paul, tell
15:42
Speaker 2: me if you've heard of any of these companies. Facebook,
15:45
Speaker 2: h Yeah, they had a fifty four percent draw down
15:47
Speaker 2: in year one.
15:48
Speaker 3: Remember that Twitter?
15:50
Speaker 2: Now x they had a fifty eight percent draw down
15:52
Speaker 2: in year one, Ali Baba, A lot of anticipation for
15:55
Speaker 2: that forty nine percent draw down in year one, Block Square,
16:01
Speaker 2: forty four percent draw down in year one, Spotify, there's
16:03
Speaker 2: a lot of hype about that one. Uh, Spotify had
16:06
Speaker 2: a forty six I'm sorry Yes, a forty six percent
16:08
Speaker 2: draw down in year one, Lift the ride sharing company,
16:12
Speaker 2: seventy nine percent draw down in year one, Zoom seventy percent,
16:17
Speaker 2: I'm sorry, forty percent draw down in year one. Uber
16:20
Speaker 2: sixty eight percent draw down in year one. This is
16:23
Speaker 2: not like over the course of the full year. This
16:25
Speaker 2: is the worst draw down that they saw during that period.
16:28
Speaker 2: So it's not first year performance. But I'm just saying, hey,
16:31
Speaker 2: what's the worst that we saw one? It's been in
16:34
Speaker 2: the news lately, Snowflake, they had that big move up recently,
16:38
Speaker 2: fifty two percent draw down year one. Another darling of
16:41
Speaker 2: retail investors, Palenteer, they went through a fifty three percent
16:46
Speaker 2: draw down in year one. DoorDash, who's absolutely cranking right now,
16:50
Speaker 2: forty seven percent draw down in year one, Airbnb thirty nine,
16:53
Speaker 2: Coinbase fifty seven percent draw down in year one, robin
16:57
Speaker 2: Hood ninety percent draw down in year one, core Weave
17:01
Speaker 2: who again, like retail darling, now they went through a
17:05
Speaker 2: sixty five percent draw down last year at one point
17:08
Speaker 2: and ultimately, again this is not where they finished their
17:11
Speaker 2: first year of trading. It's just hey, from you know,
17:14
Speaker 2: peak to trough, what's the worst draw down they went
17:17
Speaker 2: through as part of trading in that year. My point
17:20
Speaker 2: is not that these companies are failures. If you look
17:23
Speaker 2: at a lot of the ones I had named, those
17:25
Speaker 2: stocks have actually done really well since going public.
17:28
Speaker 3: Yeah, if you bought Meta or Facebook any time during
17:31
Speaker 3: that span, you did all right.
17:33
Speaker 2: But my point is these are the ones that worked
17:36
Speaker 2: and you still had to stomach that draw down in
17:39
Speaker 2: order to get through it. The ones that didn't work
17:42
Speaker 2: are the blue Aprons that just went down and kept
17:45
Speaker 2: going down. It's the Beyond Meats that kept going down,
17:47
Speaker 2: It's the go pros, it's you know, like all those
17:50
Speaker 2: ones that aren't top of mind anymore. And so my
17:54
Speaker 2: point for IPO investors is, I think a good frame
17:59
Speaker 2: of mind to go in with if you're considering it.
18:01
Speaker 2: I'm not saying you should or shouldn't, is hey, there's
18:05
Speaker 2: a pretty good chance that at some point in the
18:07
Speaker 2: first year this thing's gonna lose fifty percent. Am I
18:13
Speaker 2: comfortable riding with that? Right? Right? And if the answer,
18:16
Speaker 2: and you gotta be honest with yourself, because don't just
18:18
Speaker 2: be like, yeah, I believe, be honest. If you put
18:22
Speaker 2: in five hundred dollars and it turns out to be
18:24
Speaker 2: two fifty. Are you gonna be like, oh, no, I
18:27
Speaker 2: can't believe this and hit the sell button. Or if
18:31
Speaker 2: you put in five hundred thousand and it turns out
18:33
Speaker 2: to be two hundred and fifty thousand, you're gonna say, oh,
18:35
Speaker 2: I can't can't believe this happened. I can't believe I
18:37
Speaker 2: got and hit the sell button. And it's not to
18:39
Speaker 2: say that it can't get worse, Like maybe selling is
18:42
Speaker 2: the right thing, because maybe SpaceX is more beyond meat
18:45
Speaker 2: than Palanteer, But it's it's just something where I think
18:51
Speaker 2: you've got to expect significant draw downs as part of
18:54
Speaker 2: an IPO, just because so many of them go through it,
18:58
Speaker 2: usually at or around the expiration of that lock up period.
19:01
Speaker 3: Yeah, SpaceX has got an interesting one where it's kind
19:04
Speaker 3: of staggered out with all these different benchmark frame But yes,
19:08
Speaker 3: point taking absolutely that that can be selling pressure. However,
19:13
Speaker 3: the timing is structured from.
19:14
Speaker 2: The lock up. And look, it's not to say like
19:16
Speaker 2: SpaceX could lose fifty and then lose another ninety percent.
19:20
Speaker 2: SpaceX could lose fifty and then go up four hundred percent.
19:23
Speaker 2: I don't know. It might not lose fit might rally
19:25
Speaker 2: right after the game. Maybe it just rallies and it keeps.
19:27
Speaker 2: I don't know, but understand the uncertainty that you're pricing
19:31
Speaker 2: in here. Quick Break, Wall, Street Watch and the Trivia
19:33
Speaker 2: Answer are next.
19:39
Speaker 1: Bringing the latest financial news straight to your radio. Every day.
19:43
Speaker 1: It's the Financial Exchange on the Financial Exchange Radio Network.
19:49
Speaker 1: Tell you out full whoa Street Watch treking the stocks,
19:53
Speaker 1: the dato and the headlines driving markets so far today
19:56
Speaker 1: right here on the Financial Exchange Radio Network.
20:00
Speaker 4: Thirty four And there is quite a bit of red
20:02
Speaker 4: on the board right now. The Dow Jones is off
20:04
Speaker 4: by eight tenths of a percent, or four hundred and
20:06
Speaker 4: twelve points. The S and P five hundreds down thirty
20:09
Speaker 4: seven points or half percent. The Nasdaq is down seven
20:13
Speaker 4: tens of percent or one hundred and eighty seven points.
20:16
Speaker 4: This is going on while oil is riding, rising one
20:19
Speaker 4: point seven four percent. Brent crude is up a point
20:23
Speaker 4: percent and a half, while gold is down over eight
20:26
Speaker 4: percent and silver is echin closer to down three percent
20:31
Speaker 4: on the day. Palo Alto Network stock is down four
20:35
Speaker 4: point seven percent. Palo Alto posted stronger than expected revenue
20:38
Speaker 4: guidance for its current quarter and lifted its full year
20:41
Speaker 4: revenue guidance. The company also posted fiscal third quarter adjuster
20:45
Speaker 4: earnings of eighty five cents per share on three billion
20:47
Speaker 4: dollars in revenue, beating the earnings of eighty cents and
20:50
Speaker 4: two point nine four billion in revenue that analysts had expected.
20:55
Speaker 4: Marvel Technology stock is up five point two percent five
20:59
Speaker 4: point two six percent. This is coming a day after
21:02
Speaker 4: it's posted its best day ever, where it jumped thirty
21:05
Speaker 4: two percent. Macy's shares are up seven tenths of percent
21:10
Speaker 4: after it posted its strongest first quarter growth in four years.
21:14
Speaker 4: Revenue also came in above estimates at four point six
21:17
Speaker 4: eight billion dollars compared to analysts expectations of four point
21:20
Speaker 4: six one billion dollars. The company also hiked its full
21:23
Speaker 4: year outlook, and finally, video game retailer game Stop is
21:27
Speaker 4: up six point eight percent after it reported to justin
21:30
Speaker 4: earnings of thirty cents per share in the first quarter
21:33
Speaker 4: that was above analysts, pulled by Factset's estimates of sixteen
21:36
Speaker 4: in earnings per share. Revenue also rose fourteen percent from
21:41
Speaker 4: a year ago. I am ben Kitchen, and that was
21:43
Speaker 4: Wall Street Watch. Our trivia question today was how many
21:48
Speaker 4: strawberries did the very hungry caterpillar eat. Well, he ate
21:51
Speaker 4: them on Thursday, so that would be four. Today's winner
21:55
Speaker 4: is Tim and Shrewsbury. He will be taking home a
21:57
Speaker 4: Financial Exchange Show t shirt. We played trivia every day
22:00
Speaker 4: here on the Financial Exchange. See complete contest rules at
22:03
Speaker 4: Financial Exchange Show dot com.
22:05
Speaker 2: Paul, we got a piece here in the Wall Street Journal.
22:08
Speaker 2: America's data center build out is falling way behind schedule.
22:11
Speaker 2: Talk to me about this.
22:13
Speaker 3: So there has been a significant amount of money from
22:16
Speaker 3: the big hyperscalers committed to building out data centers to
22:19
Speaker 3: meet all of the AI demands and computing demands that
22:23
Speaker 3: will come as part of this wave. And what they've
22:26
Speaker 3: run into is the unfortunate issues that you bump into
22:29
Speaker 3: when you're putting shovels into the ground in different places,
22:32
Speaker 3: is there's been a lot of backlass and just potential
22:36
Speaker 3: issues from a permitting perspective in getting access to actually
22:40
Speaker 3: getting these data centers built. JP Morgan did an analysis
22:44
Speaker 3: where they determined that sixty percent of data center capacity
22:48
Speaker 3: that was planned for twenty twenty seven isn't even yet
22:52
Speaker 3: under construction. So you've seen the likes of Google start
22:58
Speaker 3: to try and take measures a little bit into their
23:00
Speaker 3: own hands. You have this issue where you can go
23:03
Speaker 3: out and construct the data centers, but then also you
23:05
Speaker 3: need to get approval from grid operators and power companies
23:09
Speaker 3: in order to link your data center up to the
23:12
Speaker 3: grid system. There's just a lot of different hurdles that
23:15
Speaker 3: you can run into. And then the more recent one
23:18
Speaker 3: is you've probably heard people listening on the show or
23:21
Speaker 3: just in their local community. There's just a lot of
23:24
Speaker 3: hesitancy and pushback on the idea of data centers being
23:27
Speaker 3: built in all various states across the country. Here, So
23:31
Speaker 3: you've got Google that said that they're going to look
23:34
Speaker 3: at they had bought a power company at one point,
23:37
Speaker 3: and it seems like looking to take a more integrated
23:39
Speaker 3: approach where they would either have the energy just on
23:44
Speaker 3: premise on site to have gas turbines. XAI does this
23:47
Speaker 3: in Memphis. So just a fascinating issue that we're confronting
23:52
Speaker 3: with at this moment that there is tremendous demand to
23:55
Speaker 3: build out these data centers, but some regulatory and permitting
23:59
Speaker 3: risks that you run into with this particular topic, folks.
24:02
Speaker 2: The Armstrong Advisory Group has a new guide available this month.
24:09
Speaker 2: It's titled Understanding Required Minimum Distributions. And there's been a
24:13
Speaker 2: whole bunch of changes that have taken place with rmds
24:16
Speaker 2: in the last I think ten years now, Paul makes
24:21
Speaker 2: me feel a little old to say that, but we've
24:23
Speaker 2: had I think three different sets of changes to rmds
24:26
Speaker 2: that have happened over that time period, and you need
24:30
Speaker 2: to know what the rules are now, especially let's say
24:32
Speaker 2: that you're someone who's taking your first RMD this year.
24:35
Speaker 2: First of all, congratulations, Second of all, I'm sorry, and
24:39
Speaker 2: third of all, you don't want to do it wrong
24:42
Speaker 2: because you may end up either paying penalties for not
24:45
Speaker 2: taking the right amount or look even worse than that,
24:48
Speaker 2: like you might end up taking out more than you
24:50
Speaker 2: need to because you didn't realize how the amount was calculated.
24:53
Speaker 2: So this guide helps you understand how required minimum distributions work,
24:58
Speaker 2: what you have to do, the penalties for not doing so,
25:02
Speaker 2: and a whole bunch more. Two ways to request it.
25:05
Speaker 2: Number one, you can call eight hundred three nine three
25:09
Speaker 2: for zero zero one. The second way you can go
25:12
Speaker 2: to Armstrong Advisory dot com. When you're there looking at
25:15
Speaker 2: that cute little web page you can click on the
25:18
Speaker 2: button to request the latest guide again. That number is
25:22
Speaker 2: eight hundred three nine three for zero zero one, or
25:28
Speaker 2: you can go to Armstrong Advisory dot com.
25:30
Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
25:33
Speaker 1: registered investment advisor. Nothing in the ad or in any
25:35
Speaker 1: Armstrong Guide a specific financial, legal, or tax advice. Consult
25:38
Speaker 1: your own financial, tax, intestate planning advisors before making any
25:41
Speaker 1: investment decisions. Armstrong make contact you to offer investment advisory services.
25:47
Speaker 2: So occasionally companies get hacked, and sometimes you look at
25:55
Speaker 2: and you're like, man, that was really sophisticated. I can't
25:59
Speaker 2: believe how they that off. It's just wild that they
26:03
Speaker 2: were able to do that. Other times you look at
26:08
Speaker 2: it and you're like, hey, that's probably not something that
26:14
Speaker 2: should have happened, but you know, was not you know,
26:17
Speaker 2: a publicly available vulnerability. It was Again, a lot of
26:20
Speaker 2: hacks are just you know, phishing attempts and stuff like that,
26:23
Speaker 2: and someone who you know voluntarily accidentally gives away, you know,
26:27
Speaker 2: information they shouldn't and then the systems compromised. Occasionally you
26:33
Speaker 2: run into the dumbest possible answer for potential hacks, and
26:42
Speaker 2: it appears that this may have been what happened with
26:44
Speaker 2: some of these Instagram account takeovers that have happened in
26:48
Speaker 2: the last couple of weeks. Four or four Media has
26:51
Speaker 2: a piece on this, and I gotta tell you it's
26:59
Speaker 2: it's about as bad as it gets. So here's the deal.
27:04
Speaker 2: Hackers used Meta's AI chat bot to very simply say, Hey,
27:12
Speaker 2: I want to I'll quote what they did. Just link
27:16
Speaker 2: my new email address to this account. This is use
27:19
Speaker 2: your name at blank, and I will send you the
27:23
Speaker 2: code from you know to attack blank to a two
27:28
Speaker 2: email account blank, and Meta's AI chatbot had enough access
27:33
Speaker 2: to Meta's internal systems to go and change the email
27:38
Speaker 2: address for a specific Instagram account and then email a
27:44
Speaker 2: login code to that new email so that someone could
27:47
Speaker 2: take it over. This is so mind blowingly stupid for
27:53
Speaker 2: about a million reasons, the first being there's no reason
27:56
Speaker 2: why Meta's AI chatbot should in any way be connected
28:01
Speaker 2: to Meta's database of personal information. There's no way that
28:08
Speaker 2: it should, like, it's not there's you should not as
28:12
Speaker 2: that should not have access to passwords, use your names,
28:15
Speaker 2: anything like that. There's there's absolutely no need. Second, you
28:20
Speaker 2: very most certainly should not be able to just send
28:24
Speaker 2: a message to Meta's chatbot and say, hey, change the
28:27
Speaker 2: email address associated with this account and send me a
28:30
Speaker 2: log in code. I don't. And again, this is not
28:37
Speaker 2: an AI issue, believe it or not. This is a
28:40
Speaker 2: human issue associated with permissioning. It's It's no different from
28:45
Speaker 2: if you like emailed Meta's support and said, hey, can
28:49
Speaker 2: you change the email address to this and send me
28:50
Speaker 2: a code? If a dumb person sent you that, you
28:55
Speaker 2: wouldn't be like, well, we have to get rid of people.
28:57
Speaker 2: You'd be like, no, that person didn't do their job properly.
28:59
Speaker 1: Right.
29:00
Speaker 2: So I'm not saying Meta needs to get rid of
29:02
Speaker 2: their AI, but when you allow your AI access to
29:07
Speaker 2: stuff that it should not have permission to access, this
29:11
Speaker 2: kind of stupid stuff happens. And this was very, very stupid.
29:15
Speaker 3: Yeah, they had a couple accounts that they did effectively
29:18
Speaker 3: take over. The Chief Master Sergeant of the Space Force's account,
29:22
Speaker 3: Sephora's account, and Barack Obama's White House account were three
29:26
Speaker 3: of the high profile Instagram accounts that were taken over.
29:29
Speaker 2: What's the common thread? Why Sephora? Right like you're kind
29:35
Speaker 2: of looking at you like, okay, fine, I under government leaders,
29:37
Speaker 2: government leaders And then a makeup company. What are we
29:43
Speaker 2: really doing here? But I digress. Maybe they just needed,
29:46
Speaker 2: you know, a little eyeshadow or something. Who knows. Let's
29:49
Speaker 2: take a quick break and when we return, we've got
29:53
Speaker 2: stack Roulette.
29:55
Speaker 1: Remember you can watch the show live every day on
29:58
Speaker 1: our YouTube page. We've got market updates and breaking business
30:02
Speaker 1: news all morning long, plus a full archive of all
30:05
Speaker 1: our show's content. It's all there with that click of
30:07
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30:11
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30:16
Speaker 1: Exchange Show on x and watch the show live every day.
30:19
Speaker 1: This is the Financial Exchange Radio Network.
30:36
Speaker 2: Paul, what do you got for me? From stock Roulette?
30:40
Speaker 3: I want to start out here with some news that
30:43
Speaker 3: came from some trials that were released in April of
30:47
Speaker 3: this year, but then there was a presentation done on
30:49
Speaker 3: it just most recently over the last couple of days.
30:51
Speaker 4: Here.
30:51
Speaker 3: This is from Revolution Medicine was the company behind this
30:56
Speaker 3: April press release, and what they saw was a tremendous
31:00
Speaker 3: amount of improvement in the ability to slow down the
31:05
Speaker 3: effects of pancreatic cancer. Pancreatic cancer is one area of
31:09
Speaker 3: the cancer world that has just been extremely difficult to
31:13
Speaker 3: make any inroads on slowing down the progression of the disease. Ultimately,
31:17
Speaker 3: when you get diagnosed with it, it is just very
31:20
Speaker 3: low survival rates. I think after five years there's only
31:24
Speaker 3: three percent of people who are diagnosed that survive. What
31:26
Speaker 3: we saw here from Revolution Medicine is they were able
31:30
Speaker 3: to double the amount of life expectancy for those patients
31:36
Speaker 3: on their drug and early clinical trials for to thirteen
31:39
Speaker 3: months versus the six point seven that receives chemotherapy. And
31:43
Speaker 3: in terms of some and again not a scientist, but
31:45
Speaker 3: in terms of some of the metrics that they met
31:48
Speaker 3: in able to slow down this protein that causes the
31:52
Speaker 3: mutation for pancreatic cancer that also is prevalent in colon
31:57
Speaker 3: cancer as well as lung cancer. Just some really positive
32:00
Speaker 3: developments here, and again it's early on in these these trials,
32:05
Speaker 3: but something that for the medical and you know, the
32:07
Speaker 3: medical oncology community is something that literally generated a standard
32:12
Speaker 3: ovation at one of the big conferences for for oncology.
32:16
Speaker 3: So just awesome job by science there, and hopefully that
32:20
Speaker 3: continues to develop well so that they're able to go
32:22
Speaker 3: after what are some really deadly cancers that I just
32:25
Speaker 3: mentioned there.
32:26
Speaker 2: Yeah, I mentioned this yester last week when we were
32:30
Speaker 2: covering a couple of stories about drugs in development. Uh,
32:35
Speaker 2: there's one that again just when you think about the
32:40
Speaker 2: stuff that generally kills people, Uh, it's it's it's usually
32:46
Speaker 2: all like the boring stuff. I know, we think that
32:48
Speaker 2: we're all gonna get eaten by sharks or struck by lightning.
32:50
Speaker 2: But number one and number two it's heart disease and cancer.
32:54
Speaker 2: And generally for most of for heart disease and generally
32:58
Speaker 2: for a lot of cancers. You talk about like the
33:01
Speaker 2: biggest risks that are out there, it's pretty much two things.
33:05
Speaker 2: It's weight and for heart disease, it's also like diet
33:10
Speaker 2: related to cholesterol levels and stuff like that, and between
33:14
Speaker 2: like the GLP ones. And then last week I forget
33:17
Speaker 2: who it was. I think it was Eli Lilly. They
33:19
Speaker 2: had a phase one trial for it's a single shot
33:23
Speaker 2: gene therapy that they think, based on the phase one
33:26
Speaker 2: trial results, will permanently lower blood cholesterol levels by fifty
33:31
Speaker 2: percent on average. Wow, and so what this isn't going
33:36
Speaker 2: to do? I see people being like, oh, well, that
33:37
Speaker 2: means you'd be able to live to be like one
33:38
Speaker 2: hundred and fifty. I'm like, no, no, no, no, no, that's not
33:41
Speaker 2: what we're talking about here. But what it just because
33:44
Speaker 2: like the human body has other stuff that starts to
33:46
Speaker 2: break down as it gets older that you know, becomes problematic.
33:51
Speaker 2: But what we are talking about is and I made
33:53
Speaker 2: the point, Look, this is the kind of stuff that
33:55
Speaker 2: could easily end up like if successful boosting and average
34:00
Speaker 2: lifespan by like five to six years, so that you
34:03
Speaker 2: have fewer people dying in their fifties, sixties and seventies
34:06
Speaker 2: and more in their eighties and nineties. Right like that,
34:08
Speaker 2: that's the thing that we're talking about. We're not talking
34:11
Speaker 2: about like everyone being able to live to be one
34:12
Speaker 2: hundred and fifty. To'll be able to live to be
34:14
Speaker 2: one hundred and fifty, you have to like figure out
34:17
Speaker 2: how to reverse the aging process of all your cells.
34:21
Speaker 2: And maybe we get there, like, don't get me wrong,
34:23
Speaker 2: Like maybe we do, but I just don't know if
34:27
Speaker 2: we will. I also think that, like in all honesty,
34:33
Speaker 2: if we start getting to the point where like lifespans
34:36
Speaker 2: get extended in that fashion, I don't think we've done
34:39
Speaker 2: the required psychological and emotional work to be able to
34:46
Speaker 2: handle exactly what that means for ourselves. I think. I
34:52
Speaker 2: think in general, you know, for all the things that
34:55
Speaker 2: we're really good at in America, we're really bad at
34:57
Speaker 2: understanding and coping with death. We kind of suck at it,
35:01
Speaker 2: quite honestly. We're not good at grieving. We're not good
35:03
Speaker 2: at like we suppress all this stuff and we just
35:07
Speaker 2: look at all the freaking botox and you know this
35:10
Speaker 2: and that that we like, we're not good at accepting
35:12
Speaker 2: that we're getting older. And sorry this kind of eared
35:16
Speaker 2: off on a tangent, but I'm just not sure that
35:19
Speaker 2: we're psychologically ready for if we could live to one
35:23
Speaker 2: hundred and fifty. I do think getting rid of some
35:26
Speaker 2: of those adverse scenarios where people die in their fifties
35:28
Speaker 2: and sixties so they can live into their eighties and nineties,
35:31
Speaker 2: I think is very much viable and I think would
35:33
Speaker 2: be great. I'm not sure if us living to one
35:37
Speaker 2: hundred and fifty actually would be.
35:39
Speaker 3: Yeah, I was surprised by the life expectancy ages in
35:42
Speaker 3: the US haven't moved as much as I would have
35:45
Speaker 3: thought with the development of everything in science and you know,
35:48
Speaker 3: drugs and healthcare over the last twenty five thirty years,
35:51
Speaker 3: Like just looking back at nineteen ninety, for example, average
35:54
Speaker 3: expectancy in the US was seventy five. We sit at
35:57
Speaker 3: seventy nine today. I get it's an increase, but not
36:00
Speaker 3: as substantial as you would have thought. For all the
36:02
Speaker 3: technological innovation that we've seen over that period of time,
36:06
Speaker 3: a lot of.
36:06
Speaker 2: It is due to the increase in what's generally termed
36:10
Speaker 2: like deaths of despair, either drug or alcohol addiction, suicide,
36:15
Speaker 2: things along those lines, like for various reasons the last
36:18
Speaker 2: ten to fifteen years, I've had some real problems there
36:21
Speaker 2: and it's been an issue. What's the weirdest thing that
36:24
Speaker 2: you guys have ever left in a taxi?
36:30
Speaker 4: Couldn't you tell you the last time I've been in
36:32
Speaker 4: a taxi.
36:33
Speaker 2: Taxi or ride share?
36:35
Speaker 4: Nothing weird, usually just a wallet or a phone.
36:38
Speaker 3: Yep, Yeah, that's that's the first thing that came to mind.
36:40
Speaker 3: There's nothing that I'm sure a bunch of codes too,
36:43
Speaker 3: but nothing exciting or any there where snazzy.
36:46
Speaker 4: Is that case ten years ago where it was in Dubai.
36:50
Speaker 4: Guy takes one of their cabs, which is like a
36:52
Speaker 4: Lamborghini or something, and left an eight hundred thousand dollars
36:55
Speaker 4: gold bar in the back.
36:57
Speaker 2: Wow, that's kind of fun. Here you go, that's kind
37:00
Speaker 2: of fun.
37:01
Speaker 3: When that story started, I thought that was you talking
37:04
Speaker 3: about your experience in Dubai leaving something in a cab.
37:09
Speaker 4: Look at me, Do I look like I have a
37:10
Speaker 4: lot of eight hundred thousand dollars gold bars lying around?
37:13
Speaker 2: That's just what you want us to think. So here's
37:16
Speaker 2: the deal. Uber started publishing this list of stuff people
37:19
Speaker 2: have left in their robotaxis now and big Yo Yo's
37:24
Speaker 2: a black marble duck, a bag that says I heart
37:29
Speaker 2: hot Dads sweet you know, So that that kind of stuff.
37:34
Speaker 3: Fifteen pound green bowling ball.
37:36
Speaker 2: While we're talking about just weird travel things, did you
37:38
Speaker 2: guys see the flight that had to get diverted? I
37:40
Speaker 2: think it was over the weekend. No, it was an
37:44
Speaker 2: international flight going across the Atlantic, I think, and it
37:47
Speaker 2: got diverted and like no one was really sure why
37:50
Speaker 2: and then had to like come back into Europe under
37:52
Speaker 2: fighter escort. It turns out that there is a like
37:56
Speaker 2: bluetooth speaker company called Bomb that the Wi Fi name
38:02
Speaker 2: of the Bluetooth speaker defaults to BOMB, and it must
38:05
Speaker 2: have been in someone's bag on this plane. And got
38:08
Speaker 2: turned on, and so naturally the pilots are like, what
38:11
Speaker 2: the heck is going on here, Like there's a Wi
38:13
Speaker 2: Fi like thing that says bomb on. It had to
38:16
Speaker 2: turn the plane around and it turned out just to
38:18
Speaker 2: be one of these Bluetooth speakers. Wowt's take a quick
38:21
Speaker 2: break for the rest of the day. We are done
38:23
Speaker 2: and we will see you tomorrow on the Financial Exchange