r/stocks
Could SpaceX "catch-up" to its own valuation if it raises enough capital from the IPO?
Author plans to invest in SpaceX IPO, wondering if it can justify its high valuation by using raised funds for R&D to generate good ROI.
- SpaceX can raise massive capital at a high valuation to fund its own research and development.
- Issuing shares at a premium allows the company to fund expenses for years without significant shareholder dilution.
- The raised capital could generate a strong ROI, allowing fundamentals to eventually catch up to the valuation.
- There is a broad consensus that SpaceX is currently overvalued.
- The IPO might primarily serve as exit liquidity for early investors rather than funding future growth.
Seems like there is a consensus that SpaceX is overvalued.
But if it issues the shares, at an insane valuation, and uses that cash to fund its own research, could it get a good ROI on that investment?
I'm probably gonna put around 3% of my portfolio into them just for exposure. On the hope that my money is spent on the company's expenses. Not just exit liquidity.
Even with the current balance sheets, at this valuation it could just issue shares for years without much shareholder dilution. The hope is that the investment pays off.
I guess the broader question is, can an overvalued company like SpaceX take real advantage of its overvaluation to "fulfill its own prophecy"?
Folks are buying Musk, not spacex, or Tesla for that matter.
SPACEX is raising money to pay initial investors and debt.
There's always the likelihood we are visited by aliens who are in dire need of SpaceX 's services
You're basically describing reflexivity. A high valuation lowers the cost of capital. Lower cost of capital enables more investment. More investment can increase future earnings power. Future earnings power can justify a higher valuation. It's one of the reasons market leaders often get stronger, not weaker.
Um no. Most of the money is being used to pay off existing loans. Holdmy Sachs won't even send you a thank you note for helping pay off their $20B loan to Elon. https://finance.yahoo.com/markets/stocks/articles/spacex-80-billion-ipo-catch-070000561.html
Sounds like gambling, not investing.
No way, that’s not how it works
And I doubt that they will even think of doing that, this is just an exit plan for many insiders
Literally the only play around SpaceX is hoping there are enough people dumber than you to be your exit liquidity, or that it somehow follows Tesla and completely disconnects from reality.
It’s not raising money, merely a liquidity event from earlier debtholders and investors in his rolled debt pyramid with each component loss making
You will absolutely be exit liquidity.
78% of the money SpaceX is raising in the IPO is to pay previous debts. It's not raising much capital to grow the company.
A lot of retail investors invested in Tesla early. The press said it was over valued and would drop but they held. They made a lot of money, they were right and the press was wrong. This created an emotional bond that is stronger than logic.
I think small investments of calls and puts are the best play. SpaceX stock moves in the first six months will have nothing to do with P/E ratio.
Lick them boots! I invest in companies that make profits. This is a valuation that is more than double what it should be and Nasdaq relaxed rules for immediate inclusion. That’s rule changing for a few very rich men- that’s oligarchy bud. In not talking about Jamie Dimons compensation package, I’m talking about special rules for trumps inner circle.
Can I buy space x puts?
If you've ever dabbled in Tesla puts you'll know it's a fool's game half the time and a lottery the rest.
I have not but I’ve seen the stock. The meme stonks only go up comes from somewhere.
Yea, I definitely felt dumber after reading that post.