I have become so disillusioned by some of the Hacker News crowd on here. It used to be full of nuanced smart people with interesting takes. Nowadays it seems very one sided - makes me very sad. People seem to be completely forgetting that SpaceX is one of the most "inspiring" companies that currently exist. They produce things (Starship) that give adults long-lost goosebumps and excitement just looking at it. SpaceX tech and launch stats speak for themselves. I know its hard to extend an exponential, but just try. All the comments on here feel like they were made against Tesla in 2017, and look how that worked out.
These two comments seem to tell you, everything you need to know about this IPO. Sadly I cant get the same level of analysis, from CNBC or Bloomberg, so have to come here...
Yes hard-nosed analysis, from a couple of retail investors but not finance journalists. The latter don't want to bite the hand that feeds, the former is on the menu.
> Two-Stage Discounted Cash Flow (DCF) model. It is the gold standard for valuing a high-growth company like SpaceX.
I don't know if it's true that DCF is the "gold standard" for valuing high growth companies. IME it's actually quite bad -- not that there's really good ways to value them; more that DCF is much better for companies that aren't high growth.
High growth companies - especially ones run by Musk -- are intrinsically very hard to value, for reasons like:
- They sometimes - unpredictably - spawn new categories (think Starlink)
- There are too many variables to be able to reliably predict future cash flows (compared to say, an oil company, where future cash flows are largely dependent on oil prices, which can also be forecast with some degree of certainty)
- Risk has a much higher impact on a high growth company, how does DCF try to quantify that? Sure, you can ramp up your risk free rate like TFA suggests, but that's about as coarse a measure as it gets. Consider the risks to e.g. Tesla, how do you quantify them and their impact on its future cash flows?
Actually all this can be captured in DCF, which incorporates continuous risks with the assumption of being a going concern.
What it does not incorporate is failure risk, which has to be brought in separately.
Pricing via relative valuation is implicitly DCF… so you can’t escape it actually. If you want to do some pie in the sky shit and pull a number out of thin air - go ahead.
I am considering the same. Of course this happens to be a bad time to sell with the Iran war. Maybe we finally found the real reason for the war (only 90% sarcastic).
The question is what can we do about it? Nasdaq finalized these rule changes already. It seems like this got rammed through and now it is happening. And I don't expect Trump's corrupt SEC to do anything about it. Who else can we appeal to?
The post fails to mention that spaceX is not just a rocket company. Bundled with it is xAI, which is presumably losing money hand over fist. Package enough risk together and sell for a higher price to retail consumers. We’ve seen this play…
What I don't get is what happened to 'I'm keeping spaceX private so we can actually get to mars', with the understanding that'd be almost impossible as a public company.
Long RONB (holds a ton of spacex), short ARKK (similar composition sans SpaceX) - or if you have a lot of time, you can short non-spacex RONB holdings. Planning to sell just after the IPO
The potential for incredible forced demand has me considering participating for a period of time. I have no faith in things like datacenters in orbit, but I do have strong faith in the greed and recklessness of others.
It would help if the author actually created a DCF model and shared it. I have seen others create their own which value SpaceX between $250 to $400 billion.
Going to be a circus when our only viable launch capacity is publicly traded and only looking a quarter ahead. Guess that is the end of rocket development as we know it. Hopefully academia bails us out and carries on fundamental research. Then again the orangutan is in the whitehouse disinclined to fund any science.
For this valuation to make sense, you’re betting on one or more of:
1. Orbital data centers become not only a real thing, but a dominant thing.
2. Grok goes from being a second-tier model mostly useful for not having guardrails to being a step above all other offerings.
3. Twitter realizes its “everything app” ambitions and becomes the WeChat of the West.
4. Starship not only flies operationally, but finds a niche with orders of magnitude more business than Falcon 9 gets. Something like Earth-to-Earth passenger transport at a level that substantially displaces airlines.
All of which seem extremely unlikely. I’m fairly bullish on SpaceX, but as something of a “normal” business. Starship shows promise. Falcon 9 is a cheap workhorse. Starlink seems to just print money. But not anything like a trillion dollars’ worth.
Most reasonable analysis here! But you forgot: “retail loves it and buys it, providing capital sufficient to stabilize.”
I also like SpaceX - one thing many of the kids around here seem to forget is that elon has managed extremely dire capital and earnings situations very ably in the past - the above list for Tesla ten years ago looked much much worse.
This isn’t dispositive to success on your list but it does mean you can treat the company more like a long call : it almost certainly won’t go away.
Will he get bailed out by the Feds again though? SpaceX launch 3 failure was bailed out by the DOD. Tesla was bailed out by Obama.
Possibly. I don’t know if being bailed out is a sign of business acumen. Maybe political acumen? In any case bailing out present day Tesla or SpaceX will be very expensive, unclear of taxpayers will go for it.
Which is presumably why Elon is aiming for retail as the bail-outers
Does it? Those satellites are individually dirt cheap compared to historical communication satellites, but Starlink requires a whole lot of them and they depreciate outrageously quickly.
Compare to my personal favorite communication medium, single-mode-fiber. SMF from 20-30 years ago still works, is compatible with most current-generation wavelengths, and can carry extremely high bandwidth per strand if users are willing to put fancy optics and muxes at the ends or can carry lower speeds at transceiver prices that would have been almost unimaginably low 20 years ago.
Starlink satellites seem to have zero or even slightly negative value after five years.
> The SpaceX IPO in 2026 is unlikely to mirror the 500x or 1,000x returns of early Amazon or Google
I don't think this is right; when Google first IPO'd the sentiment was that they had a single successful product, search, and the stock was expected to track search. Now they have a whole suite of successful products.
Similarily SoaceX is viewed as a rocket company, but they're likely to continue to expand their product range, and for all we know some of their future products could be bigger and more profitable.
I don't know what the correct value is, however my understanding of IPO's is that a bank buys (underwrites) the shares first and then lists them. This would suggest a large bank has taken a massive financial bet on the company, and I trust they understand the market and SpaceX's current value.
I know this is a lame answer because it's an appeal to authority, but I don't have an opinion on the share price other than very knowledgeable people have agreed it's fair and put up a lot of their own money.
What I do have an opinion on is that I think there's plenty of room for them to expand the market and grow. I also know the EBITDA for SpaceX is outrageously high for a hardware company, would would suggest it's a lucrative industry that others have trouble entering with low recurring costs. It seems likely to me they could continue to grow on 15 billion of revenue, and this growth is likely to be profitable.
I would argue all stock prices are speculative, they could quarter their share price in a month or they could 4x it. I've found myself constantly surprised when I look at a company, think "what else could they do?", and then watch the company explode in value again. I disagree that their share price assumes some unspecified massive success
> Now they have a whole suite of successful products.
Like what? Do they have anything that actually brings in income other than advertising?
SpaceX also is Twitter(X), and Xai. So they already have several products that are loosing them money. Not sure what else they have in the pipeline other then ai data centers in space.
This is true by any objective measure. He goes beyond "marketing" and just tells lies to keep the balls in the air. That he's not held to account is an indictment of the SEC and the whole public equity system in the US.
I have become so disillusioned by some of the Hacker News crowd on here. It used to be full of nuanced smart people with interesting takes. Nowadays it seems very one sided - makes me very sad. People seem to be completely forgetting that SpaceX is one of the most "inspiring" companies that currently exist. They produce things (Starship) that give adults long-lost goosebumps and excitement just looking at it. SpaceX tech and launch stats speak for themselves. I know its hard to extend an exponential, but just try. All the comments on here feel like they were made against Tesla in 2017, and look how that worked out.
There's more to this story than goosebumps over starships. If you have a retirement account or any investemenss open up your eyes widely.
The world finally woke up to the fact that “colonizing mars” was fake bullshit.
The same way “full self driving” was (and is) fake bullshit used to do what the rich always do:
Take from you (via taxes and inflation spending) and give to themselves via government contracts that are done via lobbyists and capture.
Musk literally raided the govt via DOGE to ensure these contracts got done.
Are you really making this point?
These two comments seem to tell you, everything you need to know about this IPO. Sadly I cant get the same level of analysis, from CNBC or Bloomberg, so have to come here...
https://news.ycombinator.com/item?id=47606845
https://news.ycombinator.com/item?id=47613231
Ya but all the financial logic in the world doesn’t account for Elon god, number go up.
For most retail investors, Musk connected securities are a lifestyle product, not an investment.
Meme it till it's true, I guess? People are nuts.
This other comment by the same user in one of the links from 2 weeks ago I found the easiest to understand, in brief:
https://news.ycombinator.com/item?id=47389233
That covers 1 of the 10 points in the second link.
Yes hard-nosed analysis, from a couple of retail investors but not finance journalists. The latter don't want to bite the hand that feeds, the former is on the menu.
The bigger investors know the dual-use story for SpaceX, so that is what will be used to justify valuations.
https://ioc.exchange/@muskfiles/116333241408716236
> Two-Stage Discounted Cash Flow (DCF) model. It is the gold standard for valuing a high-growth company like SpaceX.
I don't know if it's true that DCF is the "gold standard" for valuing high growth companies. IME it's actually quite bad -- not that there's really good ways to value them; more that DCF is much better for companies that aren't high growth.
High growth companies - especially ones run by Musk -- are intrinsically very hard to value, for reasons like:
- They sometimes - unpredictably - spawn new categories (think Starlink)
- There are too many variables to be able to reliably predict future cash flows (compared to say, an oil company, where future cash flows are largely dependent on oil prices, which can also be forecast with some degree of certainty)
- Risk has a much higher impact on a high growth company, how does DCF try to quantify that? Sure, you can ramp up your risk free rate like TFA suggests, but that's about as coarse a measure as it gets. Consider the risks to e.g. Tesla, how do you quantify them and their impact on its future cash flows?
Actually all this can be captured in DCF, which incorporates continuous risks with the assumption of being a going concern.
What it does not incorporate is failure risk, which has to be brought in separately.
Pricing via relative valuation is implicitly DCF… so you can’t escape it actually. If you want to do some pie in the sky shit and pull a number out of thin air - go ahead.
If S&P change their rules, I am going to sell my index funds, taxes be damned.
Sadly, this is not the only trash that is going to be hoisted on us retirement investors. OpenAI is waiting in the wings as well.
I am sure I am not the only one. That doesn't seem like it will be good for the market.
I am considering the same. Of course this happens to be a bad time to sell with the Iran war. Maybe we finally found the real reason for the war (only 90% sarcastic).
I'm invested in VTI, VXUS, and VT in various places, so I'm definitely going to be buying it whether I want to or not
If it's any consolation , VTI is free-float weighted so won't pick up very much SpaceX initially.
There were extensive discussions previously about passive investors being taken for a ride:
https://news.ycombinator.com/item?id=47392550
And Michael Burry also wrote a long post about it:
https://x.com/michaeljburry/status/2032483200404992209
The question is what can we do about it? Nasdaq finalized these rule changes already. It seems like this got rammed through and now it is happening. And I don't expect Trump's corrupt SEC to do anything about it. Who else can we appeal to?
The post fails to mention that spaceX is not just a rocket company. Bundled with it is xAI, which is presumably losing money hand over fist. Package enough risk together and sell for a higher price to retail consumers. We’ve seen this play…
What I don't get is what happened to 'I'm keeping spaceX private so we can actually get to mars', with the understanding that'd be almost impossible as a public company.
Welp, guess that idea got sold out...
It fell into place for my dense ass when I heard someone muse that inside SpaceX the joke is "Mars == Wars"
True or not, it rings with reality IMO
Search for Golden Dome
I don't know how anyone takes that program seriously
Apparently Elon has for 25 years, https://ioc.exchange/@muskfiles/116333241408716236
> Bundled with it is xAI, which is presumably losing money hand over fist.
But that is surely offset by Twitter, which is doing great business.
I've structured a pre IPO bet:
Long RONB (holds a ton of spacex), short ARKK (similar composition sans SpaceX) - or if you have a lot of time, you can short non-spacex RONB holdings. Planning to sell just after the IPO
The potential for incredible forced demand has me considering participating for a period of time. I have no faith in things like datacenters in orbit, but I do have strong faith in the greed and recklessness of others.
Remember when AGI comes, money will be meaningless since we'll all just have abundance and no jobs.
But also Musk needs to get paid $1T, and he also needs indices to change their rules to pump more of your money into his giga-IPO.
Nothing to see here.
It would help if the author actually created a DCF model and shared it. I have seen others create their own which value SpaceX between $250 to $400 billion.
Going to be a circus when our only viable launch capacity is publicly traded and only looking a quarter ahead. Guess that is the end of rocket development as we know it. Hopefully academia bails us out and carries on fundamental research. Then again the orangutan is in the whitehouse disinclined to fund any science.
Normally yes. But everyone will go with what Elon wants.
Tesla is not targeting quarterly goals. Most of its valuation is from long bets like robotaxi and the robot
For this valuation to make sense, you’re betting on one or more of:
1. Orbital data centers become not only a real thing, but a dominant thing.
2. Grok goes from being a second-tier model mostly useful for not having guardrails to being a step above all other offerings.
3. Twitter realizes its “everything app” ambitions and becomes the WeChat of the West.
4. Starship not only flies operationally, but finds a niche with orders of magnitude more business than Falcon 9 gets. Something like Earth-to-Earth passenger transport at a level that substantially displaces airlines.
All of which seem extremely unlikely. I’m fairly bullish on SpaceX, but as something of a “normal” business. Starship shows promise. Falcon 9 is a cheap workhorse. Starlink seems to just print money. But not anything like a trillion dollars’ worth.
Most reasonable analysis here! But you forgot: “retail loves it and buys it, providing capital sufficient to stabilize.”
I also like SpaceX - one thing many of the kids around here seem to forget is that elon has managed extremely dire capital and earnings situations very ably in the past - the above list for Tesla ten years ago looked much much worse.
This isn’t dispositive to success on your list but it does mean you can treat the company more like a long call : it almost certainly won’t go away.
Will he get bailed out by the Feds again though? SpaceX launch 3 failure was bailed out by the DOD. Tesla was bailed out by Obama.
Possibly. I don’t know if being bailed out is a sign of business acumen. Maybe political acumen? In any case bailing out present day Tesla or SpaceX will be very expensive, unclear of taxpayers will go for it.
Which is presumably why Elon is aiming for retail as the bail-outers
> Starlink seems to just print money.
Does it? Those satellites are individually dirt cheap compared to historical communication satellites, but Starlink requires a whole lot of them and they depreciate outrageously quickly.
Compare to my personal favorite communication medium, single-mode-fiber. SMF from 20-30 years ago still works, is compatible with most current-generation wavelengths, and can carry extremely high bandwidth per strand if users are willing to put fancy optics and muxes at the ends or can carry lower speeds at transceiver prices that would have been almost unimaginably low 20 years ago.
Starlink satellites seem to have zero or even slightly negative value after five years.
It's an Elon company, the valuation is never going to make sense.
> The SpaceX IPO in 2026 is unlikely to mirror the 500x or 1,000x returns of early Amazon or Google
I don't think this is right; when Google first IPO'd the sentiment was that they had a single successful product, search, and the stock was expected to track search. Now they have a whole suite of successful products.
Similarily SoaceX is viewed as a rocket company, but they're likely to continue to expand their product range, and for all we know some of their future products could be bigger and more profitable.
Say a number.
In your opinion how much SpaceX should be valued to be overpriced?
If $1.75T is OK. Is $5T too much? I think the idea is that with over 1.5 valuation that is already taken into account (as is the narrative fallacy)
I don't know what the correct value is, however my understanding of IPO's is that a bank buys (underwrites) the shares first and then lists them. This would suggest a large bank has taken a massive financial bet on the company, and I trust they understand the market and SpaceX's current value.
I know this is a lame answer because it's an appeal to authority, but I don't have an opinion on the share price other than very knowledgeable people have agreed it's fair and put up a lot of their own money.
What I do have an opinion on is that I think there's plenty of room for them to expand the market and grow. I also know the EBITDA for SpaceX is outrageously high for a hardware company, would would suggest it's a lucrative industry that others have trouble entering with low recurring costs. It seems likely to me they could continue to grow on 15 billion of revenue, and this growth is likely to be profitable.
Seems ludicrous. They're starting at half of Googles current market cap and have to 1000x.
You're saying in 20 years SpaceX being valued at ~500x current Googles is likely?
Sure, but that's pure speculation. The price suggests not speculation but certainty about some unspecified and massive success.
Google's price went up as they were more successful and created new products. They didn't try to extract money upfront from investors for vapor.
I would argue all stock prices are speculative, they could quarter their share price in a month or they could 4x it. I've found myself constantly surprised when I look at a company, think "what else could they do?", and then watch the company explode in value again. I disagree that their share price assumes some unspecified massive success
> Now they have a whole suite of successful products.
Like what? Do they have anything that actually brings in income other than advertising?
SpaceX also is Twitter(X), and Xai. So they already have several products that are loosing them money. Not sure what else they have in the pipeline other then ai data centers in space.
If they manage to bag a platinum asteroid all bets are off
> Musk is a storyteller.
Musk is a bullshitter.
This is true by any objective measure. He goes beyond "marketing" and just tells lies to keep the balls in the air. That he's not held to account is an indictment of the SEC and the whole public equity system in the US.
His real benefactors are not the public...https://ioc.exchange/@muskfiles/116333241408716236