We Think the SpaceX IPO Is Overvalued
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We Think the SpaceX IPO Is Overvalued
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Re: We Think the SpaceX IPO Is Overvalued
#2> Even at $63 per share, we give SpaceX a lot of benefit of the doubt in two of the three scenarios, in which we assume the company can achieve a rapidly reusable Starship rocket enabling multiple launches per week and successfully commercialize data centers in space.
> In our downside scenario, orbital data centers won’t work or offer any advantage over terrestrial ones. We surmise that the company, having invested tens of billions to find this out, would cut bait on the project sometime around 2028, the way management walked away from plans to build multiple small-car factories at Tesla.
Re: We Think the SpaceX IPO Is Overvalued
#3> We Think the SpaceX IPO Is Overvalued
Well... yeah, sure, everyone thinks that.
And the fact that it doesn't matter and won't impact demand for shares illustrates how increasingly and dangerously untethered the stock market is from reality.
Re: We Think the SpaceX IPO Is Overvalued
#4Everyone says SpaceX IPO price is too high, but it's the most interesting IPO in a long time, it's critical to the US government, and America is, frankly, addicted to gambling. I'm not convinced it's going anywhere but up for a long while.
Re: We Think the SpaceX IPO Is Overvalued
#5> We Think the SpaceX IPO Is Overvalued Well... yeah, sure, everyone thinks that. And the fact that it doesn't matter and won't impact demand for shares illustrates how increasingly and dangerously untethered the stock market is from reality.
The market can remain irrational longer than you can stay scared of it.
Re: We Think the SpaceX IPO Is Overvalued
#6If SpaceX is indeed overvalued (which I have no opinion on), it above all else demonstrates how unimportant spaceflight still is.
SpaceX has been the only game in town for quite a while now, to such an extent that the intelligence agencies of foreign governments have no alternative but to launch with SpaceX. They now do more orbital launches than the entire rest of the world combined. If they really are worth less than Microsoft, then it seems space just doesn’t matter that much, because SpaceX is space for all practical purposes.
Re: We Think the SpaceX IPO Is Overvalued
#7>However, we assign this scenario, in which both Starship is reusable and scaled orbital data centers are highly successful, a 7% chance of happening
I may agree with their overall sentiment, but I think this sort of formulation is just silly nonsense from analysts who build models instead of companies.
Re: We Think the SpaceX IPO Is Overvalued
#8Everyone says SpaceX IPO price is too high, but it's the most interesting IPO in a long time, it's critical to the US government, and America is, frankly, addicted to gambling. I'm not convinced it's going anywhere but up for a long while.
Very little of the IPO is related to anything government, or space for that matter. It's mostly a rental service for some GPUs that were hoarded, with the promise that somehow in the future the $2B/month that Anthropic and Google are paying SpaceX for compute infrastructure will somehow grow, that somehow SpaceX will grab valuable GPU real estate before others and continue renting it to others who actually make productive services.
Re: We Think the SpaceX IPO Is Overvalued
#9> We Think the SpaceX IPO Is Overvalued Well... yeah, sure, everyone thinks that. And the fact that it doesn't matter and won't impact demand for shares illustrates how increasingly and dangerously untethered the stock market is from reality.
The market can remain irrational longer than you can stay scared of it.
Let's go check on the cautionary tales of the Tesla shorts.... poor folks, we let them run around in the yard of the asylum without a fence because they have lost the motivation even to run away. They just keep mumbling about PE ratios....
Re: We Think the SpaceX IPO Is Overvalued
#10> Even at $63 per share, we give SpaceX a lot of benefit of the doubt in two of the three scenarios, in which we assume the company can achieve a rapidly reusable Starship rocket enabling multiple launches per week and successfully commercialize data centers in space. > In our downside scenario, orbital data centers won’t work or offer any advantage over terrestrial ones. We surmise that the company, having invested…
The orbital data center thing is really strange. Without some kind of massive technological breakthrough the physics of an orbital data center make no sense. Napkin math for a single data center including solar panels, radiators, compute and structure is somewhere on the order of ~6500 tonnes. Let's say Starship can put 100-150 tonnes into orbit per launch, that is somewhere between 40-65 launches for just one single orbital data center.