Latest / Best of Business / Jeremy Hutton: Milford Asset Management expert ahead of the launch of the SpaceX IPO

Transcript

Jeremy Hutton: Milford Asset Management expert ahead of the launch of the SpaceX IPO · Best of Business

• 0:09
  Speaker 1: You're listening to a podcast from News Talk SEDB. Follow
• 0:12
  Speaker 1: this and our wide range of podcasts now on iHeartRadio.
• 0:17
  Speaker 2: Jeremy Hutton from Milford Asset Management Joint are now Jeremy.
• 0:20
  Speaker 3: Hello, good evening, Andrew.
• 0:23
  Speaker 2: Everyone's looking forward to the SpaceX monster IPO plan for
• 0:27
  Speaker 2: later this month, which will make making it. We'll make
• 0:30
  Speaker 2: it on the richest man on Earth. So what's happening?
• 0:32
  Speaker 2: Could there be some market risk with an IPO, an
• 0:35
  Speaker 2: IPO on that size suddenly coming to the market and
• 0:37
  Speaker 2: taking the capital.
• 0:39
  Speaker 3: Yeah, yeah, that's a good question that the market's trying
• 0:42
  Speaker 3: to grapple with. So with SpaceX, you're getting obviously the
• 0:47
  Speaker 3: highly successful space launch and starlink business, which is very
• 0:51
  Speaker 3: profitable part of their business, and it's been jammed together
• 0:54
  Speaker 3: recently with an AI type business which which is obviously
• 0:59
  Speaker 3: very heavy on the on the cash losses. But nonetheless
• 1:02
  Speaker 3: SpaceX is poised to have the largest IPO of all time.
• 1:05
  Speaker 3: They're aiming to raise seventy five billion US dollars And
• 1:10
  Speaker 3: for reference of the previous largest IPO was Saudi Eramco,
• 1:14
  Speaker 3: which is the world's largest oil business, that raised twenty
• 1:18
  Speaker 3: nine billion in twenty nineteen, So SpaceX is raising almost
• 1:22
  Speaker 3: three times the previous records. So yeah, it could come
• 1:26
  Speaker 3: with a few digestion issues for the wider markets.
• 1:29
  Speaker 2: There me go, there's a phrase with now digestion issues
• 1:32
  Speaker 2: because of this IPO, So what are those digestion issues?
• 1:37
  Speaker 3: Yeah, I mean to raise the amount of capital of
• 1:40
  Speaker 3: the size on the market. So you know, this is
• 1:43
  Speaker 3: new supply coming in investors, so they're going to have
• 1:45
  Speaker 3: to dip into their pockets. And you know, if they
• 1:49
  Speaker 3: don't have that level of cash shitting on the sidelines
• 1:51
  Speaker 3: and liquid in their bank accounts, then they might struggle
• 1:54
  Speaker 3: to participate in the IPO. And if they don't have
• 1:57
  Speaker 3: it ready to go, then usually they have to sell
• 1:59
  Speaker 3: some other holdings on the market to get more liquid,
• 2:03
  Speaker 3: and often investors do tend to sell in related companies
• 2:07
  Speaker 3: to the IPO. So in this case, it would be
• 2:09
  Speaker 3: likely in the tech or AI adjacent sectors. And the
• 2:13
  Speaker 3: thinking here is that they're getting additional exposure to this
• 2:17
  Speaker 3: thematic in a potentially new SpaceX holding, and you may
• 2:21
  Speaker 3: as well sell down some of your other exposure. And
• 2:23
  Speaker 3: there's related businesses, so perhaps some choppy choppiness coming if
• 2:27
  Speaker 3: you see some selling in Tech or mag seven to
• 2:30
  Speaker 3: help fund this big SpaceX ipo.
• 2:33
  Speaker 2: Yeah, and there seems to be a bit of a race,
• 2:35
  Speaker 2: particularly alongst the AII crowd, because there rumors that Ananthropic
• 2:39
  Speaker 2: and Open AI would like to go public as well.
• 2:42
  Speaker 2: So could they have a impact as well.
• 2:45
  Speaker 3: Yeah, Again, this is more supply coming at investors and
• 2:50
  Speaker 3: huge amounts of money as well. So both of these
• 2:52
  Speaker 3: two Anthropic and API Open AI sorry another sixty billion
• 2:57
  Speaker 3: each between them, so would smash records on their own front.
• 3:03
  Speaker 3: But you know, the opportunities here for these businesses to
• 3:05
  Speaker 3: list right now. We know that in financial markets the
• 3:08
  Speaker 3: IPO window can close very quickly if things go wrong,
• 3:12
  Speaker 3: and there's very strong invested demand for anything AI at
• 3:15
  Speaker 3: the moment. But on one hand, this opportunity, on the
• 3:18
  Speaker 3: other hand, it just highlights, you know, how much of
• 3:20
  Speaker 3: concentration risk is there in markets at the moment. There
• 3:24
  Speaker 3: is a distinct lack of diversification. It's everything is all
• 3:28
  Speaker 3: in and all around this AI thematic. So something for
• 3:32
  Speaker 3: investors to consider. You know, if you're participating in the
• 3:35
  Speaker 3: SpaceX ipo, you're getting even more exposure to this thematic.
• 3:39
  Speaker 2: It'll be the proof in the putting of the AI
• 3:41
  Speaker 2: bubble or not, and I thank you so much. Jeremy
• 3:43
  Speaker 2: Hutton now someon bridges, some bridges, has written in the
• 3:46
  Speaker 2: New Zealand Herald today and he says New Zealand's energy
• 3:49
  Speaker 2: system is now the country's number one economic and social issue.
• 3:52
  Speaker 2: And I agree, and the next election must deliver bold reform.
• 3:57
  Speaker 2: He says that the lack of reliable electricity is holding
• 3:59
  Speaker 2: back growth and it's pushing up bills and so he says,
• 4:03
  Speaker 2: despite a renewables boom, wholesale electricity prices have doubled. We
• 4:07
  Speaker 2: all know the problems. He points to the huge gap
• 4:10
  Speaker 2: between the renewable projects that are consented and those that
• 4:13
  Speaker 2: are actually built.
• 4:14
  Speaker 1: For more from News Talks at b Listen live on
• 4:17
  Speaker 1: air or online, and keep our shows with you wherever
• 4:20
  Speaker 1: you go with our podcasts on iHeartRadio