{"id":7039026,"date":"2026-08-16T08:14:51","date_gmt":"2026-08-16T08:14:51","guid":{"rendered":"https:\/\/peraltafinancing.com\/business\/finance\/avoid-the-spacex-ipo-lazy-man-and-money\/"},"modified":"2026-08-16T08:14:51","modified_gmt":"2026-08-16T08:14:51","slug":"avoid-the-spacex-ipo-lazy-man-and-money","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=7039026","title":{"rendered":"Avoid the SpaceX IPO – Lazy Man and Money"},"content":{"rendered":"


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Every few years there\u2019s an IPO that gets people who don\u2019t normally think about stocks asking me if they should buy it. Back in the day it was Google. Then Facebook. Then a parade of names I\u2019ve already forgotten. This year it\u2019s SpaceX, which is expected to start trading on the Nasdaq under the ticker SPCX next Friday.<\/p>\n

Elon Musk\u2019s hype machine is in full effect. Instead of cars driving themselves, it\u2019s about creating a colony of a million people on Mars*. It\u2019s Starlink beaming internet down from space. And it\u2019s reportedly going to be the largest IPO in history, targeting a $1.77 trillion valuation<\/a>.<\/p>\n

That number is exactly why I\u2019m going to pass. Actually, it\u2019s only part of the reason. Let me walk through the rest.<\/p>\n

I\u2019ll get my bias out of the way first. I\u2019m not a fan of Musk, and I\u2019ve been less of one since his DOGE adventure in government. You\u2019re free to disagree, but I think even he\u2019d admit that he failed miserably at delivering what he promised.<\/p>\n

Here\u2019s the bigger problem, though. To buy SpaceX, you kind of have to buy the whole Musk story, and that story has a habit of moving the goalposts.<\/p>\n

Look at Tesla. Its valuation has always seemed out of control to me compared to other car companies. Tesla makes great cars, but it\u2019s still a car company, and it\u2019s priced like something else entirely. Meanwhile, Musk seems less interested in cars these days and more interested in humanoid robots. Ten years ago, he sold us on full self-driving being right around the corner. It wasn\u2019t. Today, Tesla is playing catch-up to Google\u2019s Waymo and a Chinese company or two who are actually putting driverless cars on the road. So, having not delivered on that promise, the pitch has shifted to robots that are probably another decade away.<\/p>\n

Now, what exactly are you buying with SpaceX? It\u2019s a bundle. It includes Twitter (sorry, \u201cX\u201d), which Musk bought for $44 billion and quickly lost about 80% of its value<\/a>. It includes xAI, his artificial intelligence company. xAI isn\u2019t nothing, but let\u2019s be honest about where it sits. It\u2019s behind OpenAI\u2019s ChatGPT, behind Anthropic\u2019s Claude, and behind Google\u2019s Gemini. I\u2019d put it in fourth place at best, with Meta breathing down its neck. And every one of these AI companies is spending absolutely staggering amounts of money on data centers right now. That\u2019s a scary business to be in, even if you\u2019re winning. Being in fourth place and spending like you\u2019re in first is scarier still.<\/p>\n

Then there are the actual rockets, which are supposedly the whole point. The core launch business does real, impressive work. But the revenue is small for a $1.77 trillion price tag. SpaceX did somewhere around $19 billion in revenue last year and still lost nearly $5 billion.<\/p>\n

Let me put that $1.77 trillion in context, because numbers this big stop meaning anything. Here\u2019s what other trillion-dollar-ish companies actually bring in:<\/p>\n

Alphabet (Google):<\/b> over $400 billion in revenue last year
Microsoft:<\/b> north of $245 billion
Meta:<\/b> around $165 billion
Nvidia:<\/b> $130 billion last fiscal year, and running far higher now<\/p>\n

These are wildly profitable companies. In fairness, Alphabet (4.3B), Microsoft (3.2B), and Nvidia (5.2B) are still much bigger than SpaceX. However, Musk seems to think that SpaceX is equal to Meta without the revenue or profits. I\u2019m not a Wall Street analyst, but I can do the revenue\/market cap division, and it doesn\u2019t add up for me.<\/p>\n

I\u2019m not the only skeptic. Morningstar just pegged SpaceX\u2019s fair value at $780 billion<\/a>, less than half the IPO target, and flatly said investors will get better prices after the IPO. The Motley Fool agreed<\/a>, saying there\u2019s no rush and a wait-and-see approach lowers your risk. When the pros are this lukewarm, why buy into the hype?<\/p>\n

So would I ever buy? Sure, at the right price. IPOs have lock-up periods, and when early investors are finally free to sell, the price often drops. For me, I\u2019d start to get interested after about a 70% drop from the IPO price. It\u2019s the gap between the hype and what the business actually earns, factoring in the failures to deliver that I\u2019ve watched for years. I can\u2019t even begin to imagine what Warren Buffett thinks of this.<\/p>\n

Am I being too cynical here? Are you planning to buy into the SpaceX IPO, or sitting it out like me? Let me know in the comments.<\/p>\n

* Yes, Musk\u2019s compensation package includes an incentive for creating a colony of a million people on Mars.<\/a><\/p>\n

Related<\/em><\/h3>\n<\/p>\n

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