Musk's SpaceX prices record $75B IPO at $135 a share
reuters.comHow long will it sustain this price after the IPO?
With Tesla as the reference class, long enough to render shorters insolvent.
I am curious what happens to Tesla stock now. I always viewed it as a way to invest in Musk, rather than in a car company. But SpaceX would seem a better fit for that now. Teslas underlying value is much lower.
Indeed, I thought similar.
But the SpaceX float (a term I didn't know about before this IPO) is low enough that this effect may not even show up at all.
Assuming the website I just looked up the numbers on was not itself the hallucination of an AI[0], 75% of Tesla's shares are actually traded, so if I take their market cap as US$1.5T then people are trading US$1.125T of Tesla shares, whereas SpaceX only floated $75 billion of theirs, so it won't dilute the available market for people who want to ride Musk's coattails.
[0] how would I know? https://finbox.com/WBAG:TSLA/explorer/shares_float_pct/
Not long unless they bend the rules. The voting control, the restrictions on shareholder lawsuits, the fast track rules for NASDAQ, the shell game of different companies, etc is all meant to prop up a price that doesn’t make sense. Otherwise they would behave like everyone else and do a normal IPO. They can’t do that because it won’t keep its price.
Goldman Sachs projects SpaceX’s total revenue to reach $474 billion in 2030, up from $18.7 billion last year. That’s 25x in just 4 years. It shouldn’t take long to check if real growth is along this predicted trajectory. But by that time Elon Musk will have sold enough of his shares. We will pay through index funds in our 401(k).
Goldman is also the lead underwriter of the IPO as I recall, so their valuation analysis is a conflict of interest. See Morning Star, who values SpaceX as half the value they’re seeking:
https://www.morningstar.com/stocks/spacex-what-investors-nee...
An aside, but I'm still amused that Morningstar Inc., the American financial services firm, shares a name with the Morning Star, a left-wing British daily newspaper originally founded in 1930 as the Daily Worker by the Communist Party of Great Britain.
(Also, y'know, synonymous with Lucifer).
Very sad news to hear Elon Musk winning.