They had like $16B in revenue last year, half from Starlink.
That’s just money in the door and the underwriters seem to think the business is worth $1.75T.
They had like $16B in revenue last year, half from Starlink.
That’s just money in the door and the underwriters seem to think the business is worth $1.75T.
If underwriters think it’s worth $1.7T with a $16B revenue (not profit), they’re doing the same thing as the credit agencies did in 2008 by giving underwater mortgage backed securities a AAA rating.
Do you have any evidence or analysis to back that up? How are those similar?
It's not the same at all. Do you know how an IPO roadshow works at all or are you just spouting bullshit?
If roadshows guaranteed accurate valuations, pets.com wouldn’t liquidate within a year of IPO.
Again, not debating that SpaceX isn’t a legit company or that it’s profitable. But underwriters agreeing with high valuations to stocks that collapse once they go public isn’t unheard of.
Edit: and I will concede that I should’ve phrased my initial thoughts better. Credit rating agencies and underwriters do very separate things, just like IPOs and MBS are two very separate things.
You said: "underwriters ... doing the same thing as the credit agencies did in 2008 by giving underwater mortgage backed securities a AAA rating"
That isn't what is happening at all.
In an IPO the underwriters and the company collaborate to set the price based on approximate demand and what they want the quality of the holders to look like.
In the roadshow, the company is very constrained as to what they can say or disclose outside of the scope of the S-1. They can't include MNPI, forward looking financial projections, etc. Underwriters are also prohibited from sharing MNPI, or publishing marketing disguised as research.
So I guess if you're saying the SpaceX S-1 is completely full of shit and there's hidden risk in it, than it could be similar to 2008, but in this case nobody is manufacturing a rating, and those material misrepresentations would constitute securities fraud. Investment banks and ratings agencies aren't the same thing at all, and the buyers of marginally profitable IPO stocks are (hopefully) different than those of AAA MBS.
Yes. I updated my earlier comment and I concede I should’ve worded my earlier comment better.
I agree underwriters and credit agencies are very different just like IPOs and MBS are very different. I don’t think SpaceX is committing fraud.
> That’s just money in the door and the underwriters that seem to think the business is worth $1.75T.
I was responding to this particular comment.
In 2008, the credit rating agencies weren’t necessarily found to be guilty of wrongdoing, but a variety of reasons let them roll with AAA ratings on junk MBS anyway. Similarly the underwriters are not going to be committing crimes to facilitate IPOs. They are after all taking the risk of guaranteeing the sale for the company. However, if a company wants to roll with a high valuation, even if the fundamentals aren’t matching the valuation, if there are buyers, the underwriters will set the price supporting that high valuation. They are not incentivized to accurately measure a company’s worth like the comment I was responding to suggests.
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They are decades ahead of their nearest competition, in multiple verticals, and their barrier to entry is a literal gravity well.
All the money they are burning is for grok. And it is not decades ahead.
BO has entered the chat New Glenn and are arguably equal to Super Heavy given they've also recovered and reused their heavy booster.
I think you're going to be surprised at the level of competition BO provides SpaceX in the Artemis program.
About those underwriters - to quote the venerable Charlie Munger "they will sell 'shit' as long as 'shit' can be sold".
the ability to mine the moon or asteroid belt seems extremely lucrative, the logistics of transporting materials to earth costs less than shipping them across the ocean, an astounding level of value creation.
This can’t a serious comment.
Did you notice the size of the Artemis rocket and the size of the payload it sends to the moon and back?
Do you expect there to be diamonds just laying these on the moon surface, no mining required.
you don't have to ship things the moon, you just build a mass driver on the moon that sends things to earth. it doesn't need to yield diamonds, this would be lucrative with just fresh water
You actually believe that transporting _water_ from the moon to earth could ever be profitable, no, lucrative? Can you lay out the economics? Just so I understand.
There is no other mode of transportation cheaper than shipping across the ocean.
launching things via a mass driver from the moon to the earth requires a lot less fuel, is faster, and cheaper than shipping across the ocean
That one is subsidized by externalizing costs to our lungs.
Shipping on water has been, by far, the cheapest mode of long-distance shipping since the moment boats were invented. That is to say, since thousands of years before boats were ever powered by the shit that destroys our lungs.
So is pace travel. Then rockets are not green!
It is valuable if they can find the right rocks and bring them back. A platinum group metal asteroid would be of immense value, at least the first one anyways. After that who knows, they might super saturate the global market for decades.
our use of platinum has been limited by its scarcity, having tons of it would completely change the things we could build. saturation isn't a real downstream effect of economics, it would instead be transformative