Elon Musk’s SpaceX could spinoff Starlink in a big IPO this year, investment adviser says – Quartz

Kyle Wool, chief executive officer of Dominari Securities, spoke with Quartz for the latest installment of our Smart Investing video series.

Watch the interview above and check out the transcript below. The transcript of this conversation has been lightly edited for length and clarity.

ANDY MILLS (AM): 2024 could be a big year for IPOs. What do you see happening and what are some of the names that investors should look for?

KYLE WOOL (KW): When rates have gone straight up for the last few years, nobody wanted to bring an IPO to market because you cant really understand whats gonna happen for the next six months or the next 12 months. So people dont want to commit capital right now. Whether rates go up a little bit from here or down a little bit, who knows? It depends. I dont think anythings gonna happen between now and the election, so that gives an opportunity and a window for big banks like Goldman Sachs and Morgan Stanley and JP Morgan to take some of these great unicorns and to unleash them and bring them into the market. You look at some of the bigger names, like Databricks have about a $43 billion company in the AI space, Automation Anywhere, doing AI for drones. These are really compelling stories that people would like to invest in and its much easier to invest into them if theyre a publicly traded company. And then you have the major unicorn in the room, which is Elon Musk and SpaceX, and theres a pretty high probability, in my opinion, that hes going to spin out Starlink. And most people dont even realize Starlink is actually 60% of the value of SpaceX. So Starlink alone, based on SpaceX, most recent round was $180 billion. Right. Starlink alone would be more than a hundred billion dollar IPO. I think people might have an interest in that.

AM: Yeah. Would you be a buyer of Starlink?

KW: I would. Id be a buyer. SpaceX, I am a shareholder and so are a lot of my clients of SpaceX in the private market.

Read more:Elon Musks SpaceX is getting tighter with American intelligence and defense agencies

AM: Interesting. So you mentioned the Fed. When do you think a rate cuts gonna happen?

KW: I dont think youre gonna have a rate cut before the election. You have a meeting coming up quite soon, right around the time of the conventions. Then, the thought was a few weeks ago before the CPI number came out last week, that they would have one cut and be done into the election. I dont think they can do that. And I think with the problem in the Middle East right now, people get a little worried about the price of oil, too, and they dont want to cut rates, and then all of a sudden have inflation come into the marketplace. I dont think theyre going to cut rates anytime soon. If it was me, I would say you probably have a higher probability of a rate hike than a cut, but I dont think theyre gonna do that either. And if they do do a cut or a hike, itll be after the election. I dont think it could be just status quo for now.

AM: Yeah, theres like two wars going on, inflation, a presidential election, theres a lot of stuff floating around out there. It could be really interesting moving forward.

KW: For sure. Yeah.

AM: Well, thanks Kyle.

KW: Thank you.

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Elon Musk's SpaceX could spinoff Starlink in a big IPO this year, investment adviser says - Quartz