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Good morning! Here is the latest in trending:
Bankruptcy filing: iRobot (IRBT), the maker of Roomba vacuum cleaners, filed for bankruptcy protection and will go private after it is bought by its primary manufacturer.
No subsidies: GOP lawmakers introduced a healthcare bill that would not extend ACA subsidies – a demand by Democrats that led to the longest ever government shutdown.
Debt woes: Concerns over China’s property sector resurfaced after Vanke’s (CHVKF) bondholders rejected its bond payment plan, raising the risk of default.
If SpaceX decides to go public, would you be interested in investing?
Click here to take the poll and don’t forget to share your thoughts in the WSB comments section.
Just days after Elon Musk confirmed plans to take SpaceX (SPACE) public, the company has started the process of selecting investment banks to advise it on a potential initial public offering. SpaceX is reportedly targeting to launch its IPO next year, with a valuation that could go as high as $1.5T.
Dig deeper: Ahead of the IPO, SpaceX commenced a secondary share sale that would value the company at $800B. Under the arrangement, new and existing investors will buy up to $2.56B of SpaceX shares from eligible shareholders at $421 apiece. The sale was disclosed in a letter to shareholders by CFO Bret Johnsen, viewed by Reuters. As for the IPO plans, Johnsen said: “Whether it actually happens, when it happens, and at what valuation are still highly uncertain, but the thinking is that if we execute brilliantly and the markets cooperate, a public offering could raise a significant amount of capital.”
For now, SpaceX ranks as the second-most valuable startup in the world after OpenAI (OPENAI). SpaceX also dominates the space industry – with the most number of rocket launches and contracts with the U.S. government, and widespread use of its satellite internet service Starlink (STRLK). Musk previously said he expected SpaceX to generate around $15.5B in revenue this year, and noted that the company had been “cash flow positive for many years.” Johnsen said the capital that SpaceX raises would be used for various ambitions, including deploying AI data centers in space, future Mars missions, and establishing a permanent outpost on the moon.
Accounting windfall: As traders weigh the implications of SpaceX’s potentially blockbuster IPO, an established tech giant stands to book billions of dollars in paper gains. Alphabet (GOOG) (GOOGL) invested in SpaceX back in 2015, participating alongside Fidelity in a $1B financing round that granted the pair a combined 10% stake. In April, Alphabet reported an $8B unrealized gain linked to a private holding, widely assumed to be SpaceX, which provided a notable lift to its first-quarter profit. With SpaceX’s latest tender offer valuing it at $800B, analysts expect Alphabet’s upcoming results to reflect another sizable accounting gain. (56 comments)
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What else is happening…
Developers canceled nearly 2,000 power projects this year.
These stocks are set to join the Nasdaq 100 (NDX) index.
The hot trade: Hedging against the AI bubble popping.
US-UK tech trade deal at risk of collapse over disagreements.
Crypto executives court Abu Dhabi sovereign wealth investors.
Metals rally: An ounce of silver now buys you a barrel of oil.
Bank of Russia sues Belgium’s Euroclear over frozen assets.
China’s industrial production weakens, retail sales slow.
Trump warns of land strikes in Latin America over drug trafficking.
SA Asks: How would US invading Venezuela hit energy stocks?
Today’s Markets
In Asia, Japan -1.3%. Hong Kong -1.3%. China -0.6%. India -0.1%.
In Europe, at midday, London +0.9%. Paris +1.1%. Frankfurt +0.4%.
Futures at 6:30, Dow +0.5%. S&P +0.5%. Nasdaq +0.5%. Crude -0.1% to $57.38. Gold +1.1% to $4,373.90. Bitcoin +0.4% to $89,810.
Ten-year Treasury Yield -1 bp to 4.17%.
On The Calendar
Companies reporting today include Ocean Power Technologies (OPTT).
See the full earnings calendar on Seeking Alpha, as well as today’s economic calendar.
