SpaceX Is Basically a Huge Meme Stock
8 hours ago
- #Elon Musk
- #SpaceX IPO
- #Meme Stock
- SpaceX is planning an IPO that could value the company at $2 trillion, making it the sixth-most-valuable U.S. company, despite its small size and financial losses.
- The company's businesses include a dominant rocket launch service (over 80% of U.S. commercial launches), profitable Starlink satellite internet (9 million subscribers), and ownership of xAI (including X, formerly Twitter), but it lost nearly $5 billion last year due to high capital costs.
- At a $2 trillion valuation, SpaceX would trade at over 100 times annual sales, far higher than other trillion-dollar companies like Nvidia (21x), Alphabet (10x), and Apple (9x), making it the most expensive big stock in the market.
- Elon Musk relies on his ability to sell a grand vision and a dedicated following of retail investors (fanboys), who may allocate up to 30% of IPO shares, betting on future plans like launching 1 million AI data centers in space, despite current technical and cost hurdles.
- Musk's approach mirrors Tesla's, where investors focus on future potential rather than current profits, with Tesla's price-to-earnings ratio above 300, despite declining earnings, but SpaceX's high valuation sets an almost impossible task for delivering returns comparable to Tesla's past performance.
- Recent mega-IPOs like Snap, Uber, and Airbnb have underperformed the S&P 500, suggesting challenges for SpaceX, but Musk's reality-distortion field and investor faith could still secure the $2 trillion valuation as an act of faith in investing history.