May 26, 2024

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 can’t really understand what’s gonna happen for the next six months or the next 12 months. So people don’t 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 don’t think anything’s 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 it’s much easier to invest into them if they’re a publicly traded company. And then you have the major unicorn in the room, which is Elon Musk and SpaceX, and there’s a pretty high probability, in my opinion, that he’s going to spin out Starlink. And most people don’t 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. I’d be a buyer. SpaceX, I am a shareholder and so are a lot of my clients of SpaceX in the private market.

Read moreElon Musk’s SpaceX is getting tighter with American intelligence and defense agencies

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

KW: I don’t think you’re 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 don’t 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 don’t want to cut rates, and then all of a sudden have inflation come into the marketplace. I don’t think they’re 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 don’t think they’re gonna do that either. And if they do do a cut or a hike, it’ll be after the election. I don’t think it could be just status quo for now.

AM: Yeah, there’s like two wars going on, inflation, a presidential election, there’s 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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