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We Think the SpaceX IPO Is Overvalued

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Re: We Think the SpaceX IPO Is Overvalued

#51

Post by valicord »

ElProlactin wrote: post #37
bayarearefugee wrote: post #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.

> ...and dangerously untethered the stock market is from reality. "Disconnected from historical valuation norms" is a more sensible statement. The idea that the stock market is "detached from reality" is dangerous too because the stock market is...reality. People make and lose real money in it every day. There are good arguments that the historical valuation norms are reasonable and deviation from them is "dangerous"…

People make and lose real money in Las Vegas every day too, but millions of people don't have their retirement dependent on casino winnings.

Re: We Think the SpaceX IPO Is Overvalued

#52

Post by ink_13 »

ElProlactin wrote: post #37
bayarearefugee wrote: post #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.

> ...and dangerously untethered the stock market is from reality. "Disconnected from historical valuation norms" is a more sensible statement. The idea that the stock market is "detached from reality" is dangerous too because the stock market is...reality. People make and lose real money in it every day. There are good arguments that the historical valuation norms are reasonable and deviation from them is "dangerous"…

For certain values of "reality". It doesn't take a financial analysis to tell you that it is bananas that Tesla (~1.3T) is worth more than four times as much as Toyota (280B), and yet.

Re: We Think the SpaceX IPO Is Overvalued

#53

Post by eeixlk »

tekla wrote: post #24
adgjlsfhk1 wrote: post #19

Earlier quoted context omitted.

Because 50 rocket launches seems hard to make cheaper than a building.

The cheapness of the building is not the problem that is being dealt with. The construction of the building w/ zoning and the political fights and utilities arguments and years of time and whatever is what is being dealt with by putting it in orbit.

Building in space adds engineering complexity. Heat output requires radiators. Radiation damages equipment without shielding. Repairs require a spacewalk. All this for what, better solar panels? If you think local zoning challenges are an obstacle, then you have 194 other countries to build in. Going to space is probably the worst option. Even putting a data center on a boat is probably a better choice and that still sounds like a stupid idea.

Re: We Think the SpaceX IPO Is Overvalued

#54

Post by redox99 »

oldfuture wrote: post #15

And the prospectus says it plainly: "Mr. Musk will be able to control the outcome of matters requiring shareholder approval." Musk holds over 85% voting power through Class B super-voting shares (10 votes/share). Public investors combined will have 15%. What Musk Controls: - CEO removal = his consent. You can't fire him even if he destroys the company - Take business for himself. SpaceX gets a rocket deal? Musk can s…

I think this is a very big issue. If SpaceX is very successful, will he pay out dividends, or will he spend everything on a mission to mars at a massive loss or something like that?

Re: We Think the SpaceX IPO Is Overvalued

#55

Post by throwaway85825 »

mrcwinn wrote: post #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.

You need a probability in order to estimate expected value.

Re: We Think the SpaceX IPO Is Overvalued

#56

Post by nickff »

glaucon wrote: post #42
oldfuture wrote: post #15

And the prospectus says it plainly: "Mr. Musk will be able to control the outcome of matters requiring shareholder approval." Musk holds over 85% voting power through Class B super-voting shares (10 votes/share). Public investors combined will have 15%. What Musk Controls: - CEO removal = his consent. You can't fire him even if he destroys the company - Take business for himself. SpaceX gets a rocket deal? Musk can s…

I haven't read the prospectus but I would be interested to know, when he dies, to what degree the "... control the outcome of matters requiring shareholder approval" part will be inherited. Does that facility just go along with the Class B super-voting shares? And if it does what does it mean if more than one person inherits his shares? On the subject of the governance structure this [1] is worth a read ... "The comp…

The voting issue is problematic, but the limits on shareholder class-actions seems like a good idea. Do you know of any shareholder class-action lawsuit that actually benefited the shareholders? They only ever seem to benefit the plaintiff lawyers pursuing the case.

Re: We Think the SpaceX IPO Is Overvalued

#57

Post by jiggawatts »

kldavis4 wrote: post #34
jiggawatts wrote: post #18

Earlier quoted context omitted.

The actual “plan” is to just put a couple of GPUs in each Starlink satellite for inference. They’re not launching something the size of a building!

That just doesn't seem to justify anywhere near the valuation though does it?

Disclaimer: I suspect "data centers in space" is just blatant market manipulation by Elon, exactly the same as he'd done dozens of times before with self-driving, etc.

Having said that... it might justify the valuation if every other data centre build-out gets blocked by insufficient power supply.

Might.

Re: We Think the SpaceX IPO Is Overvalued

#58

Post by SwellJoe »

jiggawatts wrote: post #18
kldavis4 wrote: post #10

Earlier quoted context omitted.

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…

The actual “plan” is to just put a couple of GPUs in each Starlink satellite for inference. They’re not launching something the size of a building!

Which is irrelevant to SpaceX bottom line. Launching GPUs into space, whether by twos or by tons is not going to be a profitable venture.

It's just a wildly expensive bad idea, and it is obvious to anyone that understands how much it costs to put things in space. A man who runs a rocket company knows how much it costs. He knows it's dumb as hell. But, he also knows the average investor is even dumber, because TSLA still trades at ~357 PE.

Re: We Think the SpaceX IPO Is Overvalued

#59

Post by verandaguy »

oldfuture wrote: post #15

And the prospectus says it plainly: "Mr. Musk will be able to control the outcome of matters requiring shareholder approval." Musk holds over 85% voting power through Class B super-voting shares (10 votes/share). Public investors combined will have 15%. What Musk Controls: - CEO removal = his consent. You can't fire him even if he destroys the company - Take business for himself. SpaceX gets a rocket deal? Musk can s…

This should frankly be disqualifying for any company trying to go public. Super voting shares have their place but there's no scenario in which overall control of the company can be retained by super voting shareholders who make up a small minority of the overall shareholders.

The point of a company going public is not to just distribute possible profits among speculators, but to give the public a meaningful voice in company direction, in particular by offering escape hatches like being able to eject a CEO who's lost their mind and is no longer acting in the fiduciary best interest of the shareholders, which will so obviously happen here.

Re: We Think the SpaceX IPO Is Overvalued

#60

Post by amluto »

datadrivenangel wrote: post #36
kldavis4 wrote: post #10

Earlier quoted context omitted.

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…

They'll do smaller satellites, and if they can get an order of magnitude improvement on cooling and power generation to weight ratios, it'll be close to the same order of magnitude cost-wise as a terrestrial datacenter. 10x the cost is likely not enough to make it all work, so it's a bad idea, but it's possibly less bad than using lead ballast for starship launches... maybe.

I still don’t see it. The equipment is very, very expensive, is subject to shortages, and has residual value after five years. But these very low Earth orbit satellites literally burn up when they run out of fuel for station keeping.

Even if you pay a bit more to position them in a higher, more stable orbit, you still can’t physically get to them to repurpose equipment.

Check this datacenter gadget out:

https://www.marvell.com/blogs/sustainable-computing-with-cxl...

That trick is a complete nonstarter if the modules you’re trying to reuse are in space.

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