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Oddsmaker IPO Preview
SpaceX is preparing to become one of the ten most valuable companies in America on its first day of trading.
At a proposed IPO price of $135 per share, the company is seeking a valuation of approximately $1.75 trillion and a record-breaking $75 billion capital raise.
The investment question is not whether SpaceX is a great company.
The investment question is whether it is a great investment.
Those are often very different things.
The Bull Case
SpaceX may be the most strategically important private company ever created.
The company controls:
The world's dominant launch platform
The world's largest satellite network
The world's fastest-growing global broadband system
A rapidly expanding AI platform through xAI
Critical infrastructure for the U.S. government and military
The competitive advantages are extraordinary.
Launch Dominance
Reusable rockets have fundamentally changed the economics of space.
No competitor currently operates at SpaceX's scale.
Every launch increases the company's lead.
Starlink
Starlink may ultimately be the most valuable communications network ever built.
The network now serves millions of users globally and has become essential infrastructure for governments, militaries, airlines, shipping companies, remote businesses, and consumers.
Unlike traditional telecom businesses, Starlink has global reach with limited terrestrial infrastructure.
Government Contracts
SpaceX has become deeply embedded within national security and NASA operations.
The company is no longer simply a commercial enterprise.
It has become strategic infrastructure.
AI Optionality
The xAI acquisition introduces a potentially massive new growth vector.
Goldman Sachs projects SpaceX AI revenue could grow from approximately $3.2 billion in 2025 to over $300 billion by 2030.
If even partially correct, today's valuation may prove conservative.
The Bear Case
The problem is not the company.
The problem is the price.
Revenue Multiple
2025 Revenue:
$18.67 billion
Proposed Market Value:
$1.75 trillion
Implied Revenue Multiple:
Approximately 94x sales.
For perspective:
Company | Price/Sales |
|---|---|
Microsoft | ~12x |
NVIDIA | ~20-25x |
Alphabet | ~6x |
Amazon | ~4x |
SpaceX IPO | ~94x |
Investors are paying nearly a century of current revenue.
The Earnings Problem
Despite enormous revenue growth, SpaceX reported:
Revenue: $18.67 billion
EBITDA: $6.58 billion
Net Loss: ($4.94 billion)
This means investors are not purchasing current earnings.
They are purchasing future dreams.
Those dreams may eventually become reality.
But investors are paying for them today.
What Has To Go Right?
To justify $1.75 trillion, SpaceX likely needs to become several businesses simultaneously.
Scenario 1: Telecom Giant
Starlink evolves into a global communications monopoly.
Potential Revenue:
$100B+
Scenario 2: AI Infrastructure Giant
Orbital compute infrastructure becomes real.
Potential Revenue:
$100B-$300B+
Scenario 3: Transportation Platform
Starship unlocks new commercial markets.
Potential Revenue:
Unknown but potentially enormous.
Scenario 4: All Three
This is effectively what current investors are underwriting.
The Oddsmaker Math
Using approximately 13 billion shares outstanding:
Revenue per Share: $1.44
GAAP EPS: -$0.38
IPO Price: $135
Investors are paying:
94x revenue
Negative earnings
Roughly 205x EBITDA
These are among the richest public market valuations ever attempted.
What Is It Worth?
The market says:
$1.75 Trillion
Morningstar says:
$780 Billion.
That is a valuation gap of nearly $1 trillion.
Rarely do intelligent investors disagree by that much.
The Oddsmaker Verdict
Quality Score: 10/10
Perhaps the highest quality company ever brought public.
Competitive Advantage Score: 10/10
Arguably unmatched globally.
Innovation Score: 10/10
The most ambitious company on Earth.
Valuation Score: 1/10
Among the most expensive large-cap stocks ever offered.
Investment Score Today: 4/10
SpaceX may eventually justify its valuation.
History suggests that paying perfection prices for extraordinary businesses is rarely the best way to achieve extraordinary returns.
The company may be one of humanity's greatest achievements.
The stock may be one of Wall Street's most aggressive valuations.
Those are not the same thing.
Oddsmaker Rating: PASS AT THE IPO.