A tiny amount tho (won’t they float only 5% initially?).
Some interesting insights in this video:
some of the red flags IMO:
- The 5% float creates artificial scarcity and price inflation not sufficiently backed by future expected cashflows
- Valuation price targets 95x2025 sales (!)
- SpaceX toutes EBITDA (about 8Bn) as proof of profitable business while excluding extremely recurring spend on quickly depreciating highly expensive hardware Satellites and rockets
- Small but shows the tendency for overoptimism: Starlink assumes in their business case to have up 1.2Bn users by 2040. Apparently there are only 1Bn user on the planet earning more than 32Dollar per year, most of them in developed countries who have already a dense broadband connection - Based on this, educated assumption project a much smaller TAM.
Bottom line. There might actually be opportunities to make a quick buck at the IPO, but I would not hold it for long at these valuations..
4 Likes
I‘m a huge SpaceX fan and followed them since the early days when they still haven‘t sticked a booster landing.
While I think the 1.75B valuation makes sense (especially because the competition is decades behind), I don‘t see the stock outperforming the SP500.
I don’t know who Patrick Boyle is, but does he sit at home in Wintergarden wearing a suit? 
I also find the business highly fascinating. Really solving hard problems and fuelling my childhood imagination about space travel and exploration.
However I just cant see how these extreme valuation can be justified. For SpaceX currently over 2/3 of of SpaceX and over 1/3 of all orbital launch activities are attributed to Starlink business. Orbital launch demand is expected to grow at about 12-15% CAGR (Space Launch Services Market Size & Share Report, 2030)
Coupled with the limited growth potential of Starlink itself (see above), it indicates a solidly growing niche market rather then an explosive growth market that would be required to sustain 60-90x valuations.
Also In the video above, the prospect of space data centers that would curb demand (as proposed by Elon), is scrutinised as highly impractical.
The success of xAI is all but certain. Given that Elon himself just posted that the company was designed wrongly and need to be reconstructed from the ground-up.
On the other hand, I would have never thought that Tesla could sustain P/E ratios of 200 and more for that long without anyone calling the bluff.
2 Likes
haha, I think he was an investment banker before becomming a cynical youtuber, the suite has been is signature outfit ever since.
IMO, Another good reason to consider Factor ETFs as core allocation rather then just relying on CAPM based Index funds to give you a exposure to the market growth.
The potential is huge for sure. If Starship works as inteneed and they get launch costs down to 20-100$/kg to LEO, it might open up a completely new market. We had the industrial revolution, the internet, maybe space is the next big thing?
Bit like Tesla, then 
As I wrote above in this thread, I’d gamble a bit of money - no more than USD 1000 - on this IPO, only because Elon.
I am not such a big fan of factor ETFs either but used them a bit for example in 3a with a quality factor fund. Then I also have some dividend ETF which could be considered as factor (similar to quality and/or value).
Wha
What specifically do you not like about them?
I think dividend etf have sometimes a similar return profile as quality factor etfs, imo they capture factors more accidentally then deliberately. dividend payouts are are driven buy the companies policies rather than strictly underlying fundamentals. Needless to say that high dividend instruments are not very tax inefficient in switzerland.
Basically you could sum it down to me being lazy as I would have to do some research about it. For example on this forum we all seem to know a tons of details about VT and it’s UCITS equivalents but I don’t read much about factor (quality) investing here except for some people maybe having them in 3a, including me.