For anyone who suspected SpaceX shares were overvalued I’ve just seen where this week Elon Musk has just suffered his biggest loss in personal wealth after SpaceX shares fell dramatically.
He lost £263bn … a drop down to 1.1tr rather than 1.4tr.
I’m struggling to feel sorry for the guy.
According to the financial news last night SpaceX shares have halved from their peak and are now back down to about their original offer price so actually Musk hasn’t gained or lost anything - it was all on paper.
True, the shares have fallen back toward the IPO price. But they still can fall further.
There is a lot of commentary about the weakness of the SpaceX operating model and business plan. The prospectus talks about inter-planetary travel and Mars rockets from 2028. Neither are going to happen for decades. Even if a manned rocket gets to Mars (say in 10 years time) then there are significant obstacles to that being profitable. Astronauts can only safely absorb the radiation of one flight - that is, one way flight. Coming back as well means double the safe dose. But say they address that issue. Then what exactly is likely to get to Mars - a handful of astronauts and a few bits of equipment. People can’t stay on Mars without very significant infrastructure to protect them from radiation (no atmosphere, no magnet poles), the temperatures (down to -60 deg), the lack of anything to eat/drink. And to do what - find minerals? Maybe, but how to get any meaningful amount back to home.
The big bold space travel thing is a hoax.
So SpaceX is a not very exciting internet provider (easily copied), a satellite launch capability (already doing as much is as needed and there’s competition), and an AI business (lot of massive investment but not much clarity on earnings and profits).
So, all told, a false and baseless IPO valuation.
