Subscribe
Share
Share
Embed
The Carrick Espresso is your essential five-minute investment briefing, equipping you with everything you need to know for the week ahead. Marlborough's Multi-Asset Solutions Investment Team summarise market events over the past seven days and preview the key events in the week ahead, while also sharing their expert insights.
Monday Espresso Podcast - 8th June 2026
[00:00:00] Rory Dowie: Good morning. Today is Monday the 8th of June. I'm Rory Dowie, Portfolio Manager here at Marlborough. And joining me today is Andrew Shaw. As many of you already know, Andrew is one of our Investment Analysts on the team. So Andrew, good morning.
[00:00:14] Andrew Shaw: Morning, Rory.
[00:00:15] Rory Dowie: We've been fielding quite a few client questions over the last couple of weeks, and most of them have had one focus.
[00:00:20] Rory Dowie: That is the upcoming listing of SpaceX. So today is a SpaceX pod special, if you like. However, Andrew, before we get into that, markets last week, how did they get on?
[00:00:30] Andrew Shaw: Clearly we've had a strong run in markets of the low at the end of March, and last week equity markets took a bit of a breather, if you like.
[00:00:38] Andrew Shaw: The US finished down about half a percent. The UK, Europe, and emerging markets finished broadly flat, whilst Korea, which we have spoken about over the last few weeks, was actually down around 4%. It's not bad that markets are down. In fact, it's quite normal they pull back and consolidate, if you like, after such a strong run, and that's exactly what we saw last week.
[00:01:00] Rory Dowie: That poor performance in the US really culminated on Friday. The strong jobs numbers essentially made the likelihood of a rate cut look very unlikely this year, and you saw the market sell off on the news. Over the weekend, we also had missile strikes in the Middle East between Iran and Israel. And as you may imagine, oil jumped 5% higher this morning and Asian markets are off strongly.
[00:01:18] Rory Dowie: We'll be watching that closely this week. Right, Andrew, SpaceX, let's get into it. A good place to start is what does SpaceX do?
[00:01:26] Andrew Shaw: Most people hear SpaceX and think rockets, and yes, the launch business is real, but it's not the story. The story is Starlink. SpaceX is actually three different businesses bolted together, and they all have different financial statements.
[00:01:41] Andrew Shaw: First, Starlink, the satellite internet constellation, has over 9,600 satellites in orbit, and that's as at the end of March. 10.3 million subscribers to the internet provider service, and this is the cash engine. Starlink made [00:02:00] $11.4 billion in revenue in 2025, and that's 61% of the whole SpaceX revenue. It grew about 50% year on year whilst improving margins, and operating income more than doubled.
[00:02:13] Andrew Shaw: This is the part of SpaceX that genuinely prints money. Secondly, you've got the space segment. Think rockets, Falcon, Starship, and NASA crew services. That has about $4 billion in revenue, but it loses money because they're pouring roughly $3 billion a year into the Starship development. And third, the new one, the AI segment, now called SpaceX AI, which folds in the X AI business.
[00:02:39] Andrew Shaw: This is the bleeding wound. It lost over $6 billion in 2025 alone and burned through enormous capital.
[00:02:47] Rory Dowie: Okay, so three different businesses all doing different things, but under that one umbrella company in SpaceX. And yes, revenue growth, one of the segments is profitable, but the others are, are kind of sucking up capital, if you like.
[00:02:59] Rory Dowie: Moving on,
[00:03:00] Andrew, a lot's been made of the valuation that SpaceX will be listing at. Can you break that down for our listeners?
[00:03:07] Andrew Shaw: Yeah. So SpaceX is being valued at $1.77 trillion. For context, that is more than Meta, the owners of WhatsApp and Instagram, and more than double the size of JP Morgan. With the IPO, or initial public offering, the SpaceX are planning to sell about 550 million shares at $135 a share, and that's to raise about $75 billion.
[00:03:33] Rory Dowie: We've had a deeper look at some of those numbers. There are many ways to kind of quickly value companies. One is price to earnings. Another you can use for loss-making companies, i.e., they have no earnings, is price to sales, so that's price divided by the revenue, or how many years of revenue you're essentially paying for.
[00:03:50] Rory Dowie: Andrew, can you give some colour on how high some of these ratios or, or valuation metrics are for SpaceX?
[00:03:57] Andrew Shaw: Yeah. So the IPO price of [00:04:00] $135 a share and company value of $1.77 trillion, that values the business at around 115 times price to sales. So essentially you would need 115 years of revenue to make that market capitalisation.
[00:04:17] Rory Dowie: That's quite remarkable. And is there any context you can make with past IPOs to kind of put that into context?
[00:04:23] Andrew Shaw: Yeah. So we have one to look at, and given the Elon Musk factor, if you like, it will be Tesla. We did some analysis on Tesla, and actually if you look at Tesla when it IPO'd back in 2010, that peaked its valuation at 34 times price to sales.
[00:04:39] Andrew Shaw: So only a third of the valuation that SpaceX is being valued at.
[00:04:43] Rory Dowie: So ultimately, Andrew, what you're saying here is that there's a lot priced in, if you like, to that SpaceX valuation. I was actually looking at the numbers last week, and a reason why it's so expensive is because bank analysts seem to think the company can generate $350 billion of EBITDA, that is earnings before interest, tax, and [00:05:00] depreciation, by 2030.
[00:05:02] Rory Dowie: However, even earning $350 billion in 2030, they wouldn't be free cash flow positive until the following year. And essentially what that tells us is, yes, they can earn all this money, but ultimately to kind of keep the business growing and to grow it, there's huge capital expenditures in that business model.
[00:05:16] Rory Dowie: You can kind of think of it a bit like an airline. You know, airlines are obviously generating revenue, but, you have quite high costs of, of the actual aircraft themselves. So SpaceX is kind of like an airline, but on steroids. We get the growth opportunity, but really concerned about that profitability.
[00:05:31] Rory Dowie: Andrew, we've also spoken a bit about liquidity, you and I in the office, and that is the number of shares they're selling, to who, and we've also spoken about lock-up periods and what that might mean for kind of the share price reaction once it's IPO'd. Can you maybe break that down for our listeners a little bit more?
[00:05:48] Andrew Shaw: Yeah. There is a difference between company value and amount getting listed on the stock exchanges, and this is what we call the float. SpaceX are only offering [00:06:00] 3 to 5% of the company for sale to the public. What does that mean? Well, as will likely be a lot of demand, it means that the potential for violent price swings on IPO day.
[00:06:12] Andrew Shaw: Importantly, that can be up and down. Secondly, there are lock-up periods, and so normally insiders are locked up for 180 days after IPO before they can sell their shares. But SpaceX has done something clever. They've got a staggered lock-up that releases insider shares in tranches over the months following the first earnings report.
[00:06:34] Andrew Shaw: And why does this matter? Well, it deliberately drip feeds supply so that the float grows over time or releases more supply. So over time, that could put downward pressure on the stock as people try to exit their positions.
[00:06:50] Rory Dowie: Okay, and that brings us nicely to index inclusion. This is where the forced buying may come from.
[00:06:56] Rory Dowie: So when a stock enters the S&P 500, that is kind of the main [00:07:00] index in the US, or the Nasdaq 100 that we've spoken about, that's a tech-heavy part of the, the US market. Essentially, every passive fund that tracks that index has to buy it on rebalance day. They don't really care about the price because ultimately they're tracking that index, so they have to purchase what goes into that index.
[00:07:16] Rory Dowie: Andrew, what have index providers in the US, what have they been saying about inclusion of SpaceX?
[00:07:22] Andrew Shaw: Yeah, Nasdaq have created a fast entry path wherein big new listings join the Nasdaq 100 after just 15 trading days, so likely some forced buyers there. However, S&P have come out and said that they're not bending the rules at all, and so it will likely be a while before SpaceX is added into the headline S&P 500 index.
[00:07:46] Rory Dowie: Thanks, Andrew. Very clear. Just keeping an eye on time. I guess in summary for our listeners, if you were to look at company fundamentals, not knowing it was SpaceX, you would think that this is probably a ludicrously overvalued company, three times the valuation of Tesla when it listed [00:08:00] back in 2010, as you mentioned, Andrew, so a lot really is in that price.
[00:08:04] Rory Dowie: However, we would also caveat that by expecting large demand, especially from retail investors and, and perhaps forced index buyers, and given that small free floats, that may well drive the share higher. However, our view is ultimately, over time, stocks typically track free cash flow. SpaceX isn't expected to have any of that until 2031.
[00:08:23] Rory Dowie: So, you know, whilst you might get some positive moves initially, we do think that that share price will catch up with, you know, the fundamentals of that business, if you like. Andrew, before I let you go this week, what have our listeners got to look out for?
[00:08:35] Andrew Shaw: Possibly the SpaceX IPO. But other than that, there's inflation data in the US and economic growth data out in Europe.
[00:08:42] Rory Dowie: Brilliant. Thanks for joining me, Andrew. Listeners, hope you found that useful. Next week we will go through some of the economic data releases like the job numbers. But in the meantime, please reach out if you have any questions. I'm wishing you all a great week ahead.