So Patrick, what do you think about this? What are your comments?

Yeah.

I think there's no doubt that this is a milestone study, uh, in the field of computational physiology and digitally-- digital twinning.

I think it's, uh, it's truly impressive, uh, given the state of our field.

Um, the direction that things have gone in the past, uh, five to ten years has been really exciting.

Uh, so in the interest of full disclosure, I spent seven years as a member of Natalia's lab.

She was my postdoc advisor.

Mm-hmm

So how are these, let's take SpaceX for example, how is this being priced? How was it priced at IPO? And what are the core aspects of its business and what's being used to justify that price?

Well, this was a very different pricing, once again, because normally what happens is the business goes to the investment bankers, and the investment bankers come up with a prospectus that basically says what you'll get if you invest, like what your voting rights are, all of the rights, all of what you get if you put your money into the business, and how the money is used by the business.

With this one, you got no rights, there's no voting, nothing.

And how the banks price this is they come up with that prospectus and then they shop it around the big investors out there, like all of the big mutual funds, hedge funds, whatever.

And they say, there's a price range, where would you be comfortable buying? And they sort of work out where they can issue all of the stock and that's the price.

And then, like I said, it often pops about 18% from that and then drifts down.

With SpaceX, Elon Musk just gave them the price.

So we're also seeing it in prediction markets.

What the hell? [laughs]

I mean, you have to wonder if they built spreadsheets to justify this or they just pulled out the numbers because, you know, to people at home, uh, who aren't familiar necessarily with these ratios, like, nothing trades at 100 times sales.

Like, it, it doesn't happen.

Like...

And, and, and the kind of thing that even could potentially trade at a very high price to sales ratio would be maybe, like, a software company where sales basically convert straight into profits, you know, like, where, where there's no real cost.

There's massive, massive cost to it.

There's the cost of the rockets, uh, you know, but that's not really what SpaceX claims to do anymore.

What's the deal with housing? Why [laughs] does it keep going up?

[laughs]

You know, so I mean, a- and that's even the thing that, you know, it often makes me laugh when, when people say to me, um, you know, about, uh, a- about, you know, cutting taxes, you know? And they go, "Oh, well, the cut in taxes is great." And it's like, well, you know, the thing is that the tax really happens when the government spends the money, right? Once the money's been spent, it's been spent, and now we're either gonna pay what had been taxed today, or we're gonna borrow the money and have to pay for it in the future.

And, and then there's even, you know, there's sort of interest rate arguments around that because, you know, especially a couple of years ago when interest rates were almost zero.

Like, actually the, you know, should we borrow the money, like, kind of at 0% interest? Maybe we should.

Like, maybe the economy can outgrow the cost of the debt.

But now as interest rates are coming up, and of course, you know, interest rates and inflation relate to each other, um, you know, you, you end up with a situation where we're looking, like, around the world, like, pretty much every developed country has, um-Debt as a percentage of GDP is the highest it's, it's ever been.

Um, you know, a- and prior peaks occurred during, you know, during wartime, basically.

Mm.

[laughs] Yeah

... and somewhat reminiscent of the WeWork, uh, you know, IPO document where, where the, uh, you know, there were lots of photos in there.

Um, you know, other things that were interesting, the company has lost $37 billion since inception.

Um, the-- 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, uh, I believe I saw in orbit manufacturing, or at least manufacturing on the moon, but I, I've noted down in orbit.

Right.

I wanted to speak with you because this SpaceX IPO is set to be one of the most important events in a really long time in the financial markets, and you recently released a video titled, quote, "The SpaceX IPO Scandal." Uh, so I will start with the obvious question, which is why did you describe this IPO as a scandal? Uh, how is this company being sold to investors? What are you skeptical of with this IPO?

Uh, well, the, the thing that's quite questionable about the way this IPO is being done is just the way that it is being forced into the Nasdaq 100 Index almost instantly.

I think there's gonna be a 15-day delay, and also the weighting that it'll be given is much higher than you would expect for a company with a very low flow.

So in a funny way, the company goes public at a very high valuation.

People will probably buy in.

Firstly, there's a lot of people are just very excited about Elon Musk and his companies.

Uh, they'll, they'll put money in, but then the, um, the expectation is that the indexes will be buying 15 days later.

Wow