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We Think the SpaceX IPO Is Overvalued

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Re: We Think the SpaceX IPO Is Overvalued

#111

I need to understand what possible benefit there is to doing DCs in space. The cost would be, no pun intended, fucking astronomical. The cooling situation would make no sense at all -- the major up-and-coming application of DCs, LLM training, has absurd cooling requirements even here on earth where convective cooling is an option, to the point where many DCs use open-loop cooling. Latency might be better, in some cas…

It's so you don't have to ask anybody for permission. That's it. Right now, 70% of the country is at least skeptical of DCs and at worst absolutely hate them. NIMBY is basically the rallying cry. That's why you go "up" (if they can make starship work). The physics is "hard" but doable, you can keep them cool enough in a sun synchronous orbit. The math pencils out. It's not my field, but back of the envelope math seem…

>> It's so you don't have to ask anybody for permission. That's it.

This doesn't make sense because there's one party whose permission you always must ask, and that's the government. They are the ones who get to decide whether you can launch your rockets.

A more accurate version of your claim would be: datacenters in space allow you to deal with one party (i.e. the government) instead of many. So long as your relationship with that one party is good, your business plan is safe.

Re: We Think the SpaceX IPO Is Overvalued

#112
You can absolutely level this claim against Tesla too. When deliveries dropped a year ago, the stock price didn't go down. Tesla's stock is disconnected from the fundamentals and every stock investor today knows this.

Why would SpaceX be any different? If anything it would be even more disconnected from the fundamentals than Tesla is, given how much more control it gives Elon.

SpaceX stock is a bet on Elon, full stop. It has nothing to do with space, data centers, AI, or whatever technology they're currently working on; it's a bet that Elon will figure something out.

(and if you need any example of this, just look at Twitter--he engineered an exit for his X shareholders at a higher valuation [at the expense of SpaceX, but a positive exit nonetheless])

Re: We Think the SpaceX IPO Is Overvalued

#113
post #6

If 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 th…

SpaceX is not being valued based on the space part, it's being valued based on Musk's claim that the market for their AI is the entire GDP of the United States. The space stuff is only estimated as about 1% of their addressable market

Re: We Think the SpaceX IPO Is Overvalued

#114

Earlier quoted context omitted.

He's sending the weirdest mixed signals. If we want to hit anywhere near 1 on the Kardashev scale we're gonna need a planet wide high speed rail system. They should just give the major tech companies naming rights to the stations for 35 years for like 2-3 billion a pop and scale up construction 5x. I don't get the slow roll on this thing. The stations in LA and SF are gonna end up sort of like Tokyo station for the S…

He doesn't actually want progress. He wants power and wealth for himself. Public transit is an equalizer, it serves normal people.

Relax man. He's a bipolar weirdo who isn't always likable but progress doesn't always come from likeable people. And the fact of the matter is he has actually delivered on a bunch of stuff I thought I'd never see in my lifetime.

Re: We Think the SpaceX IPO Is Overvalued

#115

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…

Voting control doesn't change management's fiduciary duty to all shareholders. The founders retaining voting control has worked out fine for Alphabet shareholders.

It raises the bar to the courts for shareholder control.

The Google founders are, lets say, more reliable than Musk when it comes to making sound business decisions.

Re: We Think the SpaceX IPO Is Overvalued

#116

Earlier quoted context omitted.

He's sending the weirdest mixed signals. If we want to hit anywhere near 1 on the Kardashev scale we're gonna need a planet wide high speed rail system. They should just give the major tech companies naming rights to the stations for 35 years for like 2-3 billion a pop and scale up construction 5x. I don't get the slow roll on this thing. The stations in LA and SF are gonna end up sort of like Tokyo station for the S…

Orbital ring would kickstart the space economy like nothing else, and is technically achievable with existing materials.

Both?!? Both.

Re: We Think the SpaceX IPO Is Overvalued

#117

Earlier quoted context omitted.

He's sending the weirdest mixed signals. If we want to hit anywhere near 1 on the Kardashev scale we're gonna need a planet wide high speed rail system. They should just give the major tech companies naming rights to the stations for 35 years for like 2-3 billion a pop and scale up construction 5x. I don't get the slow roll on this thing. The stations in LA and SF are gonna end up sort of like Tokyo station for the S…

Planet wide high speed rail doesn't make much sense, it is better of medium sized trips. Flights are will always be better for intercontinental trips. Vacuum trains could be faster but would be so expensive to build. Issues would be big deal in evacuated tunnels. CA HSR is slow partly because the state government has limited funds and giving out slowly. The federal government should have been contributing more. The o…

> Vacuum trains could be faster but would be so expensive to build

Vacuum trains are what high altitude airliners are.

Re: We Think the SpaceX IPO Is Overvalued

#118

A lot (everything?) hinges on orbital data centers. If they don't work, SpaceX is overvalued. SpaceX plans to launch 120 kW satellites, each weighing 1.7 tons. Let's be conservative and say it ends up being a 100 kW satellite massing 2 tons. Let's be conservative and say Starship can launch 50 tons to orbit for $20 million ($5 million more than a Falcon 9 launch). 50 kW per ton x $400K per ton = $8,000 per kW = $8 mi…

Morningstar does think it's a possibility that Starship ends up being highly successful as a reusable platform and that orbital data centers end up being very successful, they just assign a 7% chance for that outcome.

I guess to this point the argument for the valuation is just, do you think Elon will beat the (very bad) odds?

I wouldn't take that bet, but I can see why some people would.

Re: We Think the SpaceX IPO Is Overvalued

#120
Also see Aswath Damodaran’s updated analysis. It’s not quite as dire as Morningstar but is still lower than what musk wants.

> At the rumored pricing of $1.8 trillion for the company, it is too richly priced for my tastes, given my valuation of $1.25-$1.35 trillion for the equity in the company.

https://aswathdamodaran.blogspot.com/2026/06/a-weeks-ago-i-a...

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