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A forecast of the fair market value of SpaceX's businesses

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Re: A forecast of the fair market value of SpaceX's businesses

#71

Post by lxgr »

malfist wrote: post #3

An passive investors are going to get hosed by this thanks to NASDAQ cooking the rules to favor Elon and his band of misfits. No longer will there be a year of price discovery for index funds, 15 days. Meaning index funds have to buy it at the peak of the hype cycle. Will be a huge wealth transfer from mom and pop retirement accounts to the ultra wealthy.

Huh, TIL, thank you.

Seems like MSCI can add new large constituents very quickly as well [1], so to remain neutral to the frenzy until a price has been discovered, one might need to actively short.

[1] e.g. https://www.msci.com/eqb/methodology/meth_docs/MSCI_GIMIMeth...

Re: A forecast of the fair market value of SpaceX's businesses

#72

Post by multiplegeorges »

fastball wrote: post #52
kibwen wrote: post #43

Earlier quoted context omitted.

The question is not even whether or not Starship works. Starship is, in theory, designed with the idea of getting many, many payloads to Mars. However, getting payloads to Mars is not currently something that anyone is paying for; even NASA isn't going to focus on Mars for at least another decade (likely more). And in the meantime, it's not like we don't have rockets capable of getting payloads to Mars (the Saturn V…

> because there exists a useful upper to the size of payloads that companies actually want to ship to LEO in practice This is only true because we are so completely beholden to the tyranny of the rocket equation with the current status quo. With the $/kg (and payload volume) that Starship would unlock, the entire ELO/GEO/Interplanetary/Deep Space market looks very different. Labs in space. Hotels in space. Weapons in…

How many space telescopes better than anything we currently have can we put up when launch costs are A huge synthetic telescope in orbit with an aperture the size of the planet?

How many private earth observation satellites?

The market is huge when weight constraints largely go away and $/kg drops so hard.

Re: A forecast of the fair market value of SpaceX's businesses

#73

Post by mikkupikku »

ddp26 wrote: post #53
saadn92 wrote: post #22

The xAI piece is the one that stands out to me. $258B for a lab that's burning $1.46B/quarter against $430M revenue, valued almost entirely on a merger anchor from four months ago.

As I wrote in the piece, I'm extremely skeptical that xAI should be valued as if it is a frontier lab. But as you say, going back to the xAI + SpaceX merger, analysts consistently seem to value it as if it is, so I predict the public will too, at IPO time.

I assume "extremely skeptical" is you being generous, is there anybody other than Elon who says xAI/Grok are SOTA? The only thing anybody says about it is that it's only good for porn, but local models do porn too so xAI has no moat or edge at all as far as I can see.

Re: A forecast of the fair market value of SpaceX's businesses

#74

Post by gruez »

conductr wrote: post #58
dmoy wrote: post #14

Earlier quoted context omitted.

The float adjustment probably handles this for you? The tiny amount of float of that $1.75T means that for any large total market or s&p or whatever fund (VTI, SPY, etc), SpaceX is going to be a minuscule fraction of the fund. Apple has a float of >99%. SpaceX is going to come out with 3-4% float. Since all big serious total market / whatever index funds are float adjusted, this means that SpaceX will be treated more…

> If you're buying most index funds, you should literally not care about this. Disagree. Buyers of index funds should care about fiduciary and waste. This is what this seems like at this price. Granted, I’d be more concerned if the fund manager was buying it without a requirement to. The issue still remains about why are we paying so much for this stock? Make it make sense?

>Buyers of index funds should care about fiduciary and waste. This is what this seems like at this price.

Right, but the whole point of index funds is that you're letting the market decide what's worth investing/buying (via market cap/free float weightings) and at what price. If you're making calls on what's "waste" or not, then you're no longer a passive investor and you're just picking stocks.

Re: A forecast of the fair market value of SpaceX's businesses

#75

Post by daedrdev »

Noaidi wrote: post #27
ddp26 wrote: post #5

Earlier quoted context omitted.

Yeah, it's wild. But it's not like the P/E should be 30, what do you think would be fair? That's the thing about SpaceX, some businesses are real businesses that can be modeled in normal ways, like the government launch contracts, and to some degree starlink. Others, like ~all of xAI, and the starship stuff, are being valued completely independent of revenue. I predict the IPO investors will generally follow the anal…

I mean, shouldn’t the price to earnings ratio be 1? Anything higher or lower is just speculating or other words, gambling.

I actually dont think the world will collapse by next quarter so am willing to bear the risk of doing so by having higher P/E.

Re: A forecast of the fair market value of SpaceX's businesses

#76

Post by lxgr »

JumpCrisscross wrote: post #30
malfist wrote: post #3

An passive investors are going to get hosed by this thanks to NASDAQ cooking the rules to favor Elon and his band of misfits. No longer will there be a year of price discovery for index funds, 15 days. Meaning index funds have to buy it at the peak of the hype cycle. Will be a huge wealth transfer from mom and pop retirement accounts to the ultra wealthy.

> An passive investors are going to get hosed by this thanks to NASDAQ cooking the rules I’m genuinely confused how a passive investor winds up tracking the NASDAQ 100 versus a broader index. Also, if you’re picking and choosing your exposures, you aren’t passive.

That sounds like a "no true scotsman" argument. Even passive investors need to pick some methodology of how to pick assets and how to relatively weigh them, and while you can make that as mathematically simple as possible, it's arguably an active decision.

Or would you say that e.g. an ETF tracking MSCI ex-US is not a passive fund?

Re: A forecast of the fair market value of SpaceX's businesses

#77

Post by gruez »

tliptay wrote: post #70
malfist wrote: post #3

An passive investors are going to get hosed by this thanks to NASDAQ cooking the rules to favor Elon and his band of misfits. No longer will there be a year of price discovery for index funds, 15 days. Meaning index funds have to buy it at the peak of the hype cycle. Will be a huge wealth transfer from mom and pop retirement accounts to the ultra wealthy.

Wow! This comment inspired me to dig deeper. After 20+ years in the market, today I learned: "The S&P 500 is a float-adjusted, market-capitalization-weighted index." So presumably an S&P 500 index fund is not disadvantaged, since it is tracking a float-adjusted index, i.e. the weight of SpaceX will be tiny if its float is tiny. Or, is there a nuance that I'm missing?

>So presumably an S&P 500 index fund is not disadvantaged, since it is tracking a float-adjusted index, i.e. the weight of SpaceX will be tiny if its float is tiny.

Nasdaq already caved. FTSE and S&P are supposedly considering it.

https://www.economist.com/leaders/2026/03/31/index-providers...

Re: A forecast of the fair market value of SpaceX's businesses

#78

Post by cerved »

saadn92 wrote: post #22

The xAI piece is the one that stands out to me. $258B for a lab that's burning $1.46B/quarter against $430M revenue, valued almost entirely on a merger anchor from four months ago.

For $380B you can get both AT&T and Verizon and you pay ~1.55x the revenue. Why pay 38x for Starlink?

Re: A forecast of the fair market value of SpaceX's businesses

#79

Post by mikkupikku »

fastball wrote: post #52
kibwen wrote: post #43

Earlier quoted context omitted.

The question is not even whether or not Starship works. Starship is, in theory, designed with the idea of getting many, many payloads to Mars. However, getting payloads to Mars is not currently something that anyone is paying for; even NASA isn't going to focus on Mars for at least another decade (likely more). And in the meantime, it's not like we don't have rockets capable of getting payloads to Mars (the Saturn V…

> because there exists a useful upper to the size of payloads that companies actually want to ship to LEO in practice This is only true because we are so completely beholden to the tyranny of the rocket equation with the current status quo. With the $/kg (and payload volume) that Starship would unlock, the entire ELO/GEO/Interplanetary/Deep Space market looks very different. Labs in space. Hotels in space. Weapons in…

Weapons in space, yes. Government constellations are SpaceX's best opportunity. As for anything else, the market for anything bigger than Falcon 9 is very small. Elon Musk didn't even want to proceed with Falcon Heavy because there isn't much market for even that, but Shotwell managed to convince him that having Falcon Heavy would actually help sales of Falcon 9, by inducing the government to take SpaceX more seriously.

Re: A forecast of the fair market value of SpaceX's businesses

#80

Post by lokimedes »

I know it’s easy to sit at home being indignant at the internet, but how on earth does an ISP with 10M subscribers and the most expensive infrastructure in the solar system ever come out to be worth $300B? They even have to routinely replenish their “cell towers” as their orbits decay.

Any mid-sized country would have multiple cellphone and Internet providers with larger customer bases and less upkeep.

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