Editor’s Note: Don’t say you weren’t warned… This past Wednesday, former hedge fund manager Larry Benedict revealed the market indicator that’s flashing a red light… and warning that a recession could be around the corner. So if you’re expecting the market to continue to provide the easy returns of the past year, the volatility to come could be a rude shock. Larry says we’re about to see a rough transition period… which means potentially years of subpar returns for your portfolio. That’s why he shared his profit playbook for the coming chaos… including a ticker he believes could be very useful in the days ahead. The replay of his special briefing is only available for a short time. So if you missed Wednesday’s event, be sure to go here now to catch up before it goes offline.
Elon’s Plans for Starlink By Jeff Brown, Editor, The Bleeding Edge 
Will Starlink Go Public Soon? Hi Jeff, I’ve been a Brownstone Unlimited member from the beginning and am always fascinated with your insights. Thank you. Do you have a sense if or when Elon Musk will form an IPO for Starlink? Thanks. – Jeff S. Hi Jeff, It’s great to have you on board, and I appreciate you joining so early on. My team and I are working hard to add even more value back into the Unlimited membership as quickly as we can. There is a lot more to come. I can extrapolate from what we know when there would be a good chance the SpaceX board would approve an initial public offering (IPO) for Starlink. I remember back in 2022 when Musk said that a Starlink IPO was at least three to four years away. That comment suggested that the timing will be in the 2025–2026 time frame. Current forecasted revenues for Starlink for this year are around $6.6 billion. That makes up about half of SpaceX's total revenues for the year. Starlink is already large enough as a business to be public. But if I had to guess, I believe Musk will plan to take Starlink public after it achieves key infrastructure build-out milestones. After all, launching thousands of satellites into orbit and building an internet backbone in space is a very capital-intensive project. Wall Street typically doesn’t like that because of the lack of profitability in the short term. But once Starlink can slow down its capital expenditures (CapEx) and leverage its network, the company will be throwing off free cash flow, which Wall Street loves. As of September, there were already 6,426 Starlink satellites in orbit. The initial SpaceX target has been to get 12,000 into orbit. Then it will potentially build that into a mega-constellation of as many as 42,000 Starlink satellites. What are they all for? After all, Starlink already has global coverage. That’s true, but as more and more users come online to Starlink, a higher satellite density will ensure better performance. The goal is to keep utilization of any individual Starlink satellite at a level that can still provide high-quality service. More Starlink satellites accomplish that. The other major project that Starlink has undertaken is a new constellation of Starlink satellites designed to support direct-to-cell (DTC) services. This is an exciting new technology that will actually allow a smartphone on Earth to send and receive messages directly to/from a Starlink satellite. It will be much slower, and there will be latency, so it’s a very different experience than what we’re used to with 4G or 5G networks. But when out of range of a wireless network, or in an emergency, this will really come in handy. Worth noting is that Starlink’s DTC constellation is only a few launches away from completion. And that means this technology will soon be available to T-Mobile subscribers in the U.S. T-Mobile has a one-year exclusive deal with SpaceX for Starlink DTC services. Naturally, SpaceX will look to sign up a large number of major wireless operators as partners for DTC services in the largest economic markets around the world. This is a market that is worth at least $1 billion. Based on some rough calculations, SpaceX could have 10,000 Starlink satellites in orbit by next summer, as well as fully operational DTC services in several countries. I believe that this would be a great milestone to consider an IPO. Annual revenues would likely exceed $10 billion, and Starlink could be generating free cash flow if it wanted to (i.e., if it slows down CapEx spend). That would suggest an IPO in the second half of 2025 – I’d think the fall of 2025 – at the earliest. This will be an important liquidity event for both SpaceX and Starlink employees, as well as early investors. The biggest risk concerning an IPO isn’t about Starlink as a business. It’s more about the risk that SpaceX might choose to keep Starlink private and avoid the hassle of Starlink being a public company. | Recommended Link | | | | Chaos is Coming as Soon as November 7th Legendary "Market Wizard" says there are no safe havens for this one. He predicted the 2020 crash and the 2022 crash, and he had one of the best years of his life during the 2008 crash. Now he has a new prediction that's incredibly dire and urgent for the near future… It's tied directly to the election – and you have less than a week to prepare. He explains everything in this urgent interview. | | | -- | Energy Alternatives Are Getting Attention… Jeff, are you familiar with ENG8, based in Gibraltar? They claim an Underwriters Lab-confirmed electrical output of 5X the energy put in, and the equipment is scalable. It is privately held, but getting a fair amount of technical notoriety as an upcoming cold fusion alternative to hot fusion micro-reactors. I would be very interested in hearing any thoughts on this company, especially with your contacts in the industry. – Brent R. Hi Brent, I don’t want to seem overly dismissive about your question at all. That’s not my intention. But there are so many red flags concerning this company. It just wasn’t worth me spending a couple of hours digging into it. It’s always a warning sign when the executives associated with the company are not listed on the website. I managed to find them by watching a video at the very bottom of one of the company’s website pages. It’s very odd not to have the executive team listed clearly, and now I know why. The U.S. government sued one of the principles (Haslen Back) for fraudulent activities. If you’d like to see the Department of Justice (DOJ) announcement concerning this suit, you can find it here. Also involved in the lawsuit and civil settlement was a company known as Alchemie, which is the company the ENG8 CEO comes from. I did get a chuckle when I found that ENG8 in 2022 tried to hype up its company as a blockchain company, with its own token, and NFTs with the grand vision to “decarbonize the global economy.” I managed to find that by using the Wayback Machine to dig that up, but I’ll save you some time here. The science doesn’t make much sense. The technical team is questionable. And the Underwriters Laboratory does not test/validate fusion devices. I’m sure if I dug further, it would get worse, so I won’t. I hope this is useful. The Latest CBDC Progress Report Jeff, More countries seem to be moving toward a CBDC. About 18 months ago, there was some discussion about an official US CBDC, especially coinciding with the launch of the FedNow program. I think that legislation was passed in the House, but not by the congress as a whole, related to congressional approval prior to launching a CBDC. Can you please provide an update on progress toward a US CBDC? – Richard R. Hi Richard, I’m glad you asked about this, as I’ve actually been spending quite a bit of time speaking with my network close to what’s happening in D.C. with regard to blockchain technology. Because of the stance of the current U.S. administration on cryptocurrencies over the last almost four years, this has been the absolute worst time for the blockchain industry in the U.S. Tens of billions of investment have moved offshore to escape the highly antagonistic regulatory environment. The outcome of the election next week has a binary outcome for the industry – and also for a stance on a CBDC. One outcome will be horrible for cryptocurrencies and blockchain innovation, and another outcome will be fantastic for it. For those who work in the industry, this is a single-issue vote. More specifically on CBDCs, I’ve had a lot of discussions recently around this topic. And you’re right. There was a movement 18–24 months ago – a specific project out of MIT known as Project Hamilton with some connections to the Boston Federal Reserve. But I confirmed that there is currently very limited support for a U.S. CBDC at the moment, and from what I’ve heard, it’s not going anywhere. And that’s a good thing. Disclaimer: The comments that follow are not meant to be political. I am just sharing what I have heard from my network. The plans for a CBDC became a very charged ideological issue. The progressive wing of the Democratic Party wants to push it. This progressive deep state that has been running the country for the last few years backs its position. Its goal is to force everyone to have a Fed-controlled digital wallet, so it will have ultimate control over each citizen’s money. The intention is to tie in the concept of social credit scores and gain the ability to approve or deny transactions based on “desired” behaviors. This would also allow the government to tax, fine, or lock funds at will. For example, if the government feels you have purchased too much meat in one month, you will no longer be able to buy it anymore. If you have emitted too many CO2 emissions, you will no longer be able to purchase any more plane tickets. And so on. If your actions are deemed “harmful,” then you will be fined and have funds withdrawn from your account. Moderate Democrats, Libertarians, and basically all Republicans are firmly against the use of a CBDC in this manner. And that’s precisely why it has gone nowhere. In theory, a CBDC could improve efficiencies, save costs, and reduce friction in the financial system. But in reality, the likelihood of its “power” being misused is way too high. For this reason, I simply don’t support giving the government that much control/power. If things do start to develop in this space, you can be sure that we’ll be researching and writing about it. Is Editas Waving the White Flag? Hello Brownstone team, What are your thoughts on the announcement by EDIT to out-license their ex-vivo work and focus their efforts solely on in-vivo therapies? Do you think this announcement was a positive development for EDIT or a waving of the white flag as there was no successful commercial path for their EDIT-301 trials? Market reaction today was not good as it gave back all of their gains from yesterday. Look forward to hearing your thoughts. – Brian K. Hi Brian, This is a good question because it gives us an opportunity to better understand how the early-stage biotech industry works in practice. Generally speaking, early-stage biotechnology companies rarely ever take a drug through Phase 3 clinical trials and Food and Drug Administration (FDA) approval. The costs to do so are more than $1 billion on average, and the risks are too high for a small company to spend that kind of money (assuming it can raise the capital to do so). So it is normal to license out a therapy that has seen strong results in Phase 1/2 clinical trials. And that’s exactly the case with EDIT-301. To date, EDIT-301 is potentially a best-in-class ex-vivo therapy for sickle cell and beta-thalassemia. It is smart to hand over the heavy lifting of Phase 3 clinical trials (and ultimately FDA approval) to a larger biopharmaceutical company. Companies like Editas are staffed for and focused on preclinical research, enabling Investigational New Drug (IND) applications, and Phase 1/2 stages of clinical trials. That’s why it would like to strategically focus its efforts on another preclinical program – specifically, in vivo hematopoietic stem and progenitor cell (HSPC) genetic editing. In vivo therapies are the “ideal” kind of genetic editing therapy because they have the potential of just one shot to achieve a cure. I wrote about this topic in Wednesday’s Bleeding Edge – Another Win for CRISPR. In vivo therapies are most desirable for the patient (only one shot). And they are far less expensive to administer compared to ex vivo therapies, which require cells to be taken from a patient, edited in a laboratory, and then reinjected into a patient. So no, this deal doesn’t signify Editas waving the white flag. This kind of thing is quite normal. And the general malaise for biotech that I spoke about on Wednesday is pulling down almost all early-stage biotech companies right now. Editas currently has a negative $40 million enterprise value. The single licensing deal that it announced with DRI Healthcare Trust on October 3 is worth more than that. Just a single deal. And as we know, one of the things that makes Editas so unique is its intellectual property portfolio. It is already licensing that on a non-exclusive basis to those who want to commercialize CRISPR-based therapies. Editas is keeping its preclinical and early-stage clinical efforts very focused. It is doing great work, leveraging its intellectual property, and waiting for an acquisition offer that makes sense. Regards, Jeff | 
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