SpaceX's Q2: A Neo Cloud With a Rocket Side Hustle

Sure.

So it's typical for companies when they become public, like SpaceX has become, to make regular quarterly earnings calls.

Now, those earnings calls are published.

It gives chance for analysts to dive into the numbers of what's happening with the business now that there's a greater amount of transparency again, because they're now a public company, just like General Mills or GE, right? They're the types of companies now that anyone can see what's going on inside of.

That means analyst coverage is also going to be making sure that they know what's happening and then they'll also issue their own reports, right? So you have the earnings announcements and reports and then you have the analyst coming in and giving their thoughts on the reports.

A best practice is read both.

Reading is free, folks.

And so you can read what a company actually says about itself and then you can read what an expert says about them.

Now, both of them will add color, but again, Read both.

The next part of it and why this is important is this is their first earnings announcement after their IPO.

So this has a greater level of attention than your typical earnings announcements.

OK, it's it's, oh, what's happening under the hood? I will preface that by saying, usually when you have a first earnings announcement after an IPO, anything good has probably already been baked in because if it was going to be good that soon, they probably would want to put it into the materials for the IPO so they got a good IPO price.

And as we all know, SpaceX got a fantastic IPO price on a multiple basis.

Next thing is the unlock periods.

So unlocks are a normal mechanic in any company that goes public.

for the unlock what that does it is a financial engineering tool okay and what it does is it says okay there's a lot of individuals who were part of this company earlier on and those individuals whether they be literally you know engineer joey or engineer barbara who were in the company early on or they were perhaps an early vc or private equity firm early on their stock has grown greatly and now that it is publicly available the company itself doesn't want that to be a large amount of selling activity immediately hitting the stock.

Okay.

And so what they do is say, okay, we have to stage this out.

So let's have a rolling unlock where this group of investors can unlock some today, you can unlock some tomorrow, and you can unlock some in a few months.

That's, again, a very normal structure.

Now, I will note that as a financial engineer, this unlock structure is quite unique and quite well planned.

I got to be careful how I say that.

You're stealing my

follow up question.

Yeah, it's quite well designed.