Finders Keepers: IPO, XAI, Subs

This episode explores the unusual market behavior of several companies, focusing on the surprising valuations and IPO strategies employed. Against the backdrop of Newsmax's unexpectedly high initial market valuation, despite significant losses, the hosts delve into the mechanics of its Regulation A Plus mini-IPO and the role of the small investment bank, Digital Offering LLC. More significantly, the discussion pivots to Circle, a stablecoin company, and its upcoming IPO, examining its unique business model of earning interest on massive deposits while paying little to customers. For instance, the hosts discuss how Circle's profitability is tied to high interest rates and the challenges of offering interest-bearing stablecoins due to securities regulations. In contrast to these relatively conventional (though unusual) IPOs, the episode concludes with an analysis of Elon Musk's merger of xAI and X (formerly Twitter), highlighting the complexities of valuing privately held companies and the lack of significant antitrust concerns given Musk's ownership of both entities. This episode showcases the evolving landscape of IPOs, the intricacies of stablecoin business models, and the often opaque world of mergers and acquisitions involving high-profile tech companies.