>float a fairly small issuance

SpaceX are widely reported to be planning to raise $75Billion in new capital. It may seem small a % for the valuation target. However that is about 3 times previous highest raise of $29B when Saudi Aramco went public few years back. The market simply may not be that deep[1]

There is a good chance this one becomes the Wework of this decade. The valuation, amount being raised, cooling interests in AI, and middle eastern capital changing priorities, interest rate outlook for the rest of the decade. These are all strong head winds to overcome even when not raising the largest ever amount in an IPO.

That is not say that it is destined to fail, Elon is excellent salesman of vision when fundamentals are weak, There is no better proof than Tesla P/E .

It is by no means clear this would be successful or not. The valuation, funds being raised, future growth potential are all not based on just SpaceX core businesses which would have been an easy sell.

---

[1] i.e. it could be still under-subscribed even if everyone buys into the vision, growth projections, is comfortable with valuation gets fully onboard including retail.

Even in this best case scenario SpaceX would have to sell at the lower end of the target range or go even lower and still end up being short matter what, because there could simply be not enough money in the market.

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xenadu02 8 hours ago | parent | next [-]

I think you have to temper the skepticism a bit though.

SpaceX has dramatically lowered the cost of launching things into space. They are still the leader here. They can put a kg into orbit cheaper than anyone, even heavily subsidized state operations (EU and China).

Their order book continues to be full. Every single launch vehicle they roll off the line was pre-sold years ago, including its re-use flights.

I agree that Elon is their biggest potential problem and a big risk but their launch business is sound and wildly successful. If you believe access to space will be a growing segment of the economy in the future it isn't exactly a bad investment.

I remember all the people putting Tesla down when they IPO'd. I bought $4k of stock (all I could afford at that time). Sold $100k of it a few years ago, still have the other half worth near $220k. Their numbers at IPO time were garbage and it wasn't clear they would even survive. Then they started shipping hundreds of thousands then a million cars.

YMMV, consider all sides and make your own judgement. Just be careful about trusting the anti-SpaceX case. Even if everyone is technically correct about them it can still be a huge miss not to invest! The future is not static and if they can put the raised capital to productive use the IPO could end up being a fantastic deal. And FWIW I also agree the largest immediate risk is they are over-valued. Only time will tell on that front.

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manquer 5 hours ago | parent | next [-]

As I mentioned at the end, if the pitch was just for the launch (and starlink) it would be an easy sell.

The problem is launch market is not worth 1.5+ trillion though, you need much more than just starlink and all the satellites today to justify that .

You and other early investors who had the opportunity to get in early may come of well in this and it was a good bet then.

However it is hard to see why rest of us should get in at $1.5T, the downside risks are far more than upside potential at this price .

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aeternum 3 hours ago | parent | next [-]

At current launch numbers it may not be worth 1.5+ trillion but valuations aren't about current, they're about discounted future cash flows.

It seems logical that there could/will be far more demand for launch if the price were lower. Prices are quite extreme currently, a standard 3U cubesat (loaf of bread size) is $300k and that's just for orbit.

There could be lots of startups that want to try robotic space mining but launch costs just make that mostly impossible currently so there are only a select few. It's like valuing the Dutch East India company based on the trade volumes in 1603. Of course people are not going to be buying much pepper or nutmeg if it costs them weeks of labor, but build lots of reusable ships, and with each voyage, more people can afford your pepper and nutmeg until it's a common household item.

	▲	manquer 2 hours ago \| parent [-]
		> about discounted future cash flows. discounted future cash flows is discounted by risk. There is a lot of risk on growing future revenue is the point. >seems logical that there could/will be far more demand for launch if the price were lower. This thesis hasn't played out much in the 10 years since Falcon landed in first 2015. The non Starlink component of revenue has not massively grown beyond what size the market in 2015 to today. SpaceX isn't lowering launch price to induce demand beyond out being the cheapest just by enough, they would be going lower if cost was the only barrier for more revenue. It not that businesses aren't possible there at lower launch prices. Starlink is testament that it is. The problem is that rest of the world is not able to innovate fast enough to take advantage of it even after 10 years. The industry struggles with things like manufacturing satellites at scale or raising money for it, or executing on innovation etc. What that means for SpaceX is that even if launch costs are cheaper than now, the launch market simply may not grow quick enough for the valuation number to make sense. They would need to enter a lot of new markets directly and be their own launch customer beyond Starlink. This comes with its own set of execution, regulatory and other risks. The data-center[1] in space play is an attempt to do this. Either DC play or something else, they will need to find and sustain a large business to grow, maybe they will, maybe not. It is not very clear now and that is a lot of risk so any future cash flow projection has to be discounted heavily. --- [1] I am not qualified to comment on the technical feasibility, however to analyze the company finances that is not needed, it is just one more risk factor, depending on how you feel you can assign 0 or 1 or anything in between.

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applied_heat 3 hours ago | parent | prev [-]

I am sure Elon can launch some type of space based directed energy beam and use it to intercept missiles and drones.

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afavour 7 hours ago | parent | prev | next [-]

> Their order book continues to be full.

In 2024 66% of their launches were for Starlink. So it’s not quite correct to suggest there’s a vibrant external market for their product, a lot of it is sort of self dealing.

	▲	MPSimmons 6 hours ago \| parent \| next [-]
		> it’s not quite correct to suggest there’s a vibrant external market for their product There is a very large demand for launch services. SpaceX balances launching customers and launching Starlink. It's not like they give every launch slot to customers and then launches Starlink whenever there's an opening they couldn't fill.
	▲	nradov 5 hours ago \| parent \| prev \| next [-]
		There's a vibrant external market for satellite Internet service.
	▲	BurningFrog 5 hours ago \| parent \| prev [-]
		Starlink is incredibly profitable though. It's not like they're subsidizing some experimental internal project. Starlink is the majority of their profits and growing fast.

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joyeuse6701 8 hours ago | parent | prev | next [-]

Not one more cent should be given to that man.

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nativeit 7 hours ago | parent | prev [-]

I think you have to temper the glazing a bit though.

These people and their endeavors are thoroughly, irredeemably corrupt. It’s nice you got a taste, but their impact on society has been calamitous, and will take decades to recover (if at all).

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tim333 7 hours ago | parent | prev | next [-]

>There is a good chance this one becomes the Wework of this decade.

It's very different from WeWork which was basically just subletting office space with beer taps. At least SpaceX had done significant stuff with the rockets and Starlink.

	▲	manquer 4 hours ago \| parent [-]
		The comparison was not about the strength of the business, it was about how the attempt to IPO and the original S-1 was the trigger for more realistic price discovery for Wework My comment was that it is possible that by trying/becoming public SpaceX also will go through that same process once their numbers become available.

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bandrami 4 hours ago | parent | prev [-]

> excellent salesman of vision when fundamentals are weak

Wow that was a polite way to say that