r/valueinvesting
Did space stocks deserve as much beating as they took the past few days? Is it now truly a value investing on Monday before SpaceX IPO?
Questioning if the recent sell-off in space stocks like RKLB is an overreaction driven by capital rotation ahead of the SpaceX IPO.
- The sell-off may be technical rather than fundamental, driven by liquidity needs for the SpaceX IPO rather than deteriorating business metrics.
- If the market over-punished sector peers due to rotation, current valuations might offer a contrarian entry point for long-term holders.
- Capital rotation into a mega-cap private IPO like SpaceX could structurally drain liquidity from smaller public competitors for an extended period.
- SpaceX's dominant valuation and market position may highlight the competitive disadvantages and execution risks of smaller players like RKLB and ASTS.
Investors are selling other space holdings (like Rocket Lab, AST SpaceMobile, and Redwire) to free up cash to buy into the $135/share SpaceX IPO, which is targeting a record $1.75 trillion valuation
Space stocks went down a lot this week after the initial pump.
Tbf almost everything was down big.
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RKLB is up over 300% in the past year. ASTS over 200%. Is that deserved?
RKLB still trades at a 90+ price to sales. ASTS is at 400+. And this is an industry that is still not mature or optimized for profit. Even SpaceX sees most of its valuation coming from xAI (not commercial space launches).
If you think the last few days have been a beating, I got some bad news for you. There’s a lot farther to go.
Most of this was just the broad risk-off, and these are high-beta names so they fall harder. But for a value sub the real point is RKLB/ASTS/RDW aren't value stocks, they're speculative growth, and a selloff in speculation isn't "value," just cheaper speculation. If anything SpaceX going public is a headwind, not a dip to buy, since Starlink competes with ASTS and dominates launch vs Rocket Lab.
Yes.
Space stocks are basically the opposite of value investing imho. Plenty more room to fall, the price is all speculative
You have to ask yourself:
Are you the sucker at the poker game
being egged on to make bets that is
stacked against you.
———-
If you lose money, don’t blame value investing okay? There is nothing of value investing here.