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

reuters.com

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

#141

Post by myvoiceismypass »

nonethewiser wrote: post #93
dstroot wrote: post #25

Earlier quoted context omitted.

Additional concern is the push to get it added to indices immediately. Forcing it into our retirement funds, 401ks and IRAs.

>Forcing it into our retirement funds, 401ks and IRAs. Do you think people buying the SP 500 are forced to buy Apple? Dell? Workday? I see headlines like "401k holders forced to by SpaceX" and think "WTF, that is crazy." Then I look at the article and it just says its being added to the SP500. You may not like that it's being added to the SP500 but no one is saying you are forced to buy any other companies being adde…

Do you understand that they literally changed the inclusion rules for SpaceX? Not even remotely comparable to Apple, Dell, or Workday.

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

#142

Post by FireBeyond »

toomuchtodo wrote: post #41
andsoitis wrote: post #37

Earlier quoted context omitted.

I think this is poor advice. Its share of the index will be relatively small and if it is indeed a dud, the index will organically rebalance. If you’re a long-term investor, this would just be a temporary blip. On the other hand, if this is thr opposite of a dud, you’ll get the benefit of that.

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, ex…

> Luck for some, risk management for others. Regardless, informed consent is important imho. Relevant precedence is ETFs that exclude Big Tech.

Yup. Coupling this change with "oh, and btw, we also want the option to be able to only put out annual or biannual earnings reports not quarterly" means "We want to offload even more risk."

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

#143

Post by mikeyouse »

erulabs wrote: post #100

While I agree with the sentiment that SpaceX today is not worth anywhere near 1T+, it's worth understanding that: a) SpaceX is currently trading at ~>1.5T in secondary markets and b) most of what the market is reacting to is the _chance_ that SpaceX goes on to become one of the largest companies in the world. Remember the reaction when Facebook IPOed? It was hilariously overpriced (at the time, on paper, based on exi…

Facebook's IPO was something like ~20x revenue and 100x earnings. If SpaceX IPOs at $1.5T, that's nearly 80x revenue and if you buy their 'adjusted' EBITDA figures, 230x earnings. Not quite an order of magnitude, but substantially 'worse' financially.

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

#144

Post by icepush »

analogpixel wrote: post #101
analogpixel wrote: post #10

Earlier quoted context omitted.

I keep seeing this comment on all these spacex posts, can someone ELI5 to me why the pension funds are going to be forced to buy this? (do they not have free will on what they buy?)

Thanks for the responses; next question... in theory, people that do this for a living know this? shouldn't they all be raising the red flags on this, as opposed to say just people on hackernews?

No, because the indices are free-float weighted not cap weighted. The float planned for SpaceX is tiny. If it were purchased by the indices at 1.7T on Monday and went to zero on Tuesday, the amount of value lost by the funds would be barely larger than the normal daily fluctuation of the market.

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

#146

Post by fragmede »

dstroot wrote: post #25
dig1 wrote: post #13

IMHO, still too much. Someone posted this link [1] recently. [1] https://www.youtube.com/watch?v=IHD8BDFYyGI

Additional concern is the push to get it added to indices immediately. Forcing it into our retirement funds, 401ks and IRAs.

There's a variety of ETFs that won't include it by default. Now convince all the retirees you know to switch their retirement account over to those...

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

#147

Post by novaleaf »

mrDmrTmrJ wrote: post #92
NooneAtAll3 wrote: post #63

Earlier quoted context omitted.

revenue has been "rockets - good. starlink - great. ai - big loss"

Why is "ai-big loss"? My understanding is that the S-1 showed a Q1 loss of xAI of $2.47 billion in Q1. But with the Anthropic Colossus-I rental agreement at $1.25B/month or $3.75B/quarter, xAI should now be net-neutral to cash-flow positive. If Colossus-II rents networked GB-200s, that could be up to +$47B/year at $9/hour/GB-200 for 555,000 GB-200s. For reference, current rental rates are $10-$27/hour for the same ha…

the xAi revenue comes from renting their infrastructure to their biggest competitor. Anthropic is going to IPO for aprox 1/2 the valuation, is profitable, and can cancel the contract with 90 days notice.

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

#148

Post by quickthrowman »

trhway wrote: post #53
dstroot wrote: post #25

Earlier quoted context omitted.

Additional concern is the push to get it added to indices immediately. Forcing it into our retirement funds, 401ks and IRAs.

>Forcing it into our retirement funds, 401ks and IRAs. Not just forcing it into. Forcing the funds to fight for it betting the stock rice higher and higher in a runaway style - the effect created by limited float and high valuation as the funds tracking indexes would try to get the amount reflecting the proportion of the valuation of the company vs. the whole tracked index valuation, and with such huge valuation the…

Some index funds are not obligated to perfectly replicate the index by buying shares, FXAIX (Fidelity S&P 500 mutual fund) has the option to use futures, swaps, options, and statistical sampling in addition to buying equity shares to try and replicate the returns of the index.

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

#150

Post by prewett »

RoddaWallPro wrote: post #50

I want to buy options against QQQ so badly -- but Tesla has traded at a crazy multiple of revenue/profits for a very long time, so I'm wondering if Elon/AI hype will keep these stocks high longer than I want to pay the risk premium for (options).

Why short QQQ when SpaceX will only be 2% (according to a poster above), when many of the other companies in the index are tech and chip companies, such as NVDA, which are going gang-busters? Even if SpaceX went bankrupt you'd only see a 2% drop, which is easily covered by all the AI chip companies going up. If you think SpaceX is overvalued, buy options against it directly.
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