Morningstar values SpaceX at $780B, half its IPO target

If one wants to gamble on the grift, that is what options are for. Otherwise, we might as well start adding NFTs to the indexes if fundamentals do not matter. Luck for some, risk management for others. Regardless, informed consent is important imho. Relevant precedence is ETFs that exclude Big Tech.

https://www.defianceetfs.com/xmag/ ("XMAG, the first ETF designed to provide investors with exposure to the S&P 500, excluding the “Magnificent 7” (Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta, and Tesla). XMAG offers a unique opportunity for investors to access the broader market while reducing concentration risk in these dominant tech stocks.")

https://www.aboutschwab.com/mss/story/how-investing-and-gamb... ("Investing and gambling can both be fun. But they are not the same.")

(none of this is investing advice, educational purposes only)

> The fact that people are paying an implied valuation of 2T for it currently is a strong signal IMO.

Strong signal of what?

You’re mixing the colloquial concepts of price and value, imo. Price is where people who want to sell meet people who want to buy. There are entire industries dedicated to evaluating assets, i.e. assigning them a value, many of which do not have a “price” because they are not for sale. Morningstar is part of one of those industries.

Idk…

The original “revenue thesis” was that SpaceX, with landing orbital rocket boosters, can undercut all competitors and essentially have a monopoly on payload-to-orbit, and that their lower prices would massive increase the market.

Seems a fine business.

But then a couple years ago they say “actually with this brand new technological edge we can spin up a monopoly on an entirely NEW industry, Space Internet” and within a short timeframe they’ve got billions in revenue off this entirely new service.

It’s hard to predict the future but if Starlink is the last “new space industry” that spacex has borderline-exclusive access to, I’ll be shocked.

The valuation is speculative, yes, but they have such an incredible cost advantage in a nascent space that id be hard pressed to bet against them.

It’s reminiscent of everyone claiming Uber could never succeed, citing the size of the existing taxi market. TAM can change radically when costs move down orders of magnitude, in ways that are hard to predict.

> > in the long term it is a weighing machine.

> This has not been the case for a long time.

I think this comes down to a disagreement about what "long term" means. In finance, I would suggest a _lower_ bound on long term is 10 years. More comfortably, I'd suggest something like 20-30 years. This is long enough to ride out most depressions, and it is still fits within a persons working life-time. It also roughly matches the scale at which people should be planning for retirement and long-term care (imagine if you started your retirement planning just 10 years from retirement, it would be very difficult). So I think neither BTC's not TSLA's hype has reached long-term yet. They have been around long enough to meet some of these timelines, but the excessive hype really hasn't been so long -- maybe 5 years or so.

Ultimately it was inevitable that as passive investing got more and more popular, people would seek to game it. Not that I'm happy about it, but if this works, it is probably just the beginning of sneaky ways being found to trick passive money into taking on way more risk than it intended to. And of course passive investors are passive, so they may not even notice, and probably won't fight back until the inevitable crash.