GEOFF BENNETT: SpaceX, the rocket company founded by Elon Musk, will be going public on Friday and is expected to become the largest initial public offering, or IPO, in stock market history.

With the sale of more than 555 million shares, Musk and the company are looking to raise roughly $75 billion.

That would raise the company's valuation to about $1.7 trillion, automatically making it the world's most valuable publicly traded company.

Nasdaq and larger index funds will also allow trading and investing in this company much earlier than normal, within three weeks.

Individual investors alone have already requested more than $70 billion worth of shares.

There are lots of questions about all of this.

And, for more, we are joined now by Ron Insana, MS NOW senior business analyst and author of The Message of the Markets on Substack.

Ron, it's always good to see you, especially on a day like this, as we await this IPO.

What is it about SpaceX that investors are willing to value it at a level we have never seen before?

RON INSANA, MS NOW: Well, I think to give Elon Musk a great deal of credit for being an innovator and a business genius, if you will, having taken over Tesla in its early days, having built out Starlink, which is one of the key components of SpaceX going public, and having very successfully built and launched rockets into space at a fraction of the cost that we have seen others see their attempt in the private sector or even in government operations as well.

So they're banking on his vision of the future, where we're going to have data centers in space that will provide power for artificial intelligence operations, and hoping that he can grow into that $1.7 trillion valuation, which might actually be larger tomorrow once the stock starts to trade, and deliver the types of revenues and profits that would support a valuation that high.

GEOFF BENNETT: Well, right.

After reading the prospectus, my question to you was, are investors buying the company as it exists today or a vision of what it could become?

And at what point is optimism just become speculation?

RON INSANA: Well, I mean, I think the two go hand in hand.

And they are certainly buying the vision.

They are not buying the company as it exists today, with about $18 billion in revenue and last year lost about $4.2 billion from operations.

So, no, this is not the type of company, if you look at it from an earnings perspective, that you would accord a $1.7 trillion valuation.

They're hoping that they can grow into that number, as some other companies have, obviously, whether it's Microsoft or whether it's Google's parent, Alphabet, Nvidia.

That's happened over an extremely long period of time.

This is happening much more quickly.

There are concerns, of course, that this is part of a speculative frenzy that's going on with anything associated with artificial intelligence and that the valuation on this, which, when taken in sum, is larger than the market valuation of all the IPOs I believe we have seen since the year 2000.

So this is a very big deal, and people are going to make their bets and see whether or not in the long run that vision will be fulfilled.

GEOFF BENNETT: Well, right, on your Substack and on your TikTok videos, you have been warning retail investors to be careful.

What should regular investors know, especially folks who are interested in buying shares or at least trying to get shares?

RON INSANA: Well, if they have already gotten an allocation, they have gotten that allocation at the price of $135, which was set officially today.

What often happens, and we have seen this, the chief investment officer at Truist pointed out that from the top price that you see early in initial public offering for hot stocks like this, whether it was Meta or Alibaba or some of the other big tech names that we know, a year later, those stocks were down on average about 55 percent.

So there are some restrictions on flipping for individual investors, which means buying it and selling it immediately after the IPO.

But they should be prepared for a fair amount of volatility unless you see just a surge in revenues, a surge in profitability at SpaceX that would support the valuation that may exceed $2 trillion tomorrow.

We're not quite sure exactly where it's going to open.

Some estimates are as high as $165 a share, which would provide individuals with the instant profit.

Remember also, there are a lot of early investors who are taking profits from their initial investments in SpaceX and the other components of that company.

They too are exiting.

So you don't want to be the bad holder if indeed this does not live up to its expectations.

GEOFF BENNETT: Meantime, OpenAI and Anthropic are also preparing to go public.

Are we witnessing the beginning of a new A.I.

investment cycle similar to previous technology booms, or is this something else entirely?

RON INSANA: Well, I think we're in the middle of one.

And, again, this already dwarfs kind of the capital requirements that we saw even in the build-out of the railroads in the 1870s in the United States.

This is an enormous capital commitment.

At least, this year alone, we will see about $800 billion put to work for data centers and other A.I.

infrastructure necessities.

Some are estimating that we can see a trillion dollars spent next year.

Now, whether or not that comes to pass remains to be seen.

The one caveat I'd put on this is that it's not just these companies selling equity in their firms to raise money.

They're also using a fair amount of debt, which, again, if the companies don't live up to their profit revenue expectations, we could see a financial market event down the road.

If they cannot service that debt or if they don't meet earnings expectations, that could harm their stocks rather significantly.

So I think individuals really need to do some serious homework around this and make sure that they're not in the midst of an investing mania and instead making very rational decisions about how much money they allocate to these A.I.

plays.

GEOFF BENNETT: Ron Insana, MS NOW senior business analyst and author of The Message of the Markets on Substack.

Ron, always a pleasure.

Take care.

RON INSANA: Same, Geoff.