r/stocks
Questions about SpaceX (SPCX)
Author questions SPCX's high valuation, massive AI capex, risky revenue contracts, and dual-class governance based on its S-1.
- Massive cash burn and unprofitability: AI division spent $7.7B but only generated $818M, with overall net losses of $2.6B.
- Risky revenue and extreme valuation: Trading at 95x revenue with a $15B/year contract that can be canceled with 90 days' notice.
- Execution risk and poor governance: Relying on unproven Starship tech while Elon Musk holds absolute control via dual-class shares.
I have a question for people who are buying the stock today. I am not trying to criticize the company. I read the S-1 report. I am trying to understand how the price makes sense.
Gwynne Shotwell said that making the company bigger is very expensive and she does not want to focus on how money the company makes each quarter. The report shows that this is true. In 2025 the company made 18.7 billion dollars in revenue. It still lost 2.6 billion dollars. The AI part of the company spent 7.7 billion dollars in the quarter of 2026 but it only made 818 million dollars in revenue. The company is losing money now.
I would really like to hear from people who think the stock is an investment. There are two things in the report that I do not understand:
- A big part of the companys revenue is from a contract that pays 1.25 billion dollars per month until 2029.. Either party can cancel this contract with just 90 days notice. How can we be sure that the company will make 15 billion dollars per year from this contract if it can be canceled easily?
- The companys plan for growth depends on the Starship project. The report says that Starship will make its first delivery to orbit in the half of 2026.. The report also says that this project involves technologies that do not exist yet and it is hard to say when they will be ready. The stock is trading at about 95 times the companys revenue. How much of the companys success is already factored into the stock price?
Then there is the way the company is structured. The Class A shares get one vote. Elon Musks Class B shares get to appoint most of the board members no matter how many Class A shares other people own. The company is also not following the rules for independent boards.
To put it simply: the public investors are funding the part of the companys growth and they are being asked not to judge the companys performance each quarter.. They have no way to influence the board if they do not like what they see. The only thing they can do is sell their shares.
The company is definitely extraordinary. That does not mean that the stock is a good investment. The S-1 report tells us a lot, about the company. It does not tell us why the stock is worth the current price. What is the reason, based on the report that the stock will grow into its price?
They’re treating the public market like a venture capital firm.
It’s not misleading at all. He pioneered the method. People laughed when his rockets blew up and he told his engineers ‘don’t worry I won’t fire you, try again’
Google the before/after price comparison.
I did google the before/after price comparison.
The space shuttle is the source number for the $40,000-$50,000 “before” number. Delta IV heavy was closer to $10,000. Falcon heavy is the “after” number, with about $2,000. That’s 80% savings, not 95%. And that’s assuming a falcon heavy can launch for $100,000,000 with a 50T payload. The heaviest payload of any of the launches I could find was 10T
He’s only 54 that’s 20 years minimum aside from some freak accident
You’re letting your hatred against him get in the way of potential gain. Don’t trade with emotion
Regarded
What election did he buy and what fraud did he do? Genuinely haven't heard this before
If it hits $165 for 5/10 days a 10% lockup is released. That should be interesting.
The person I responded to said “nothing in the market makes sense”. I don’t know why you think people can understand why you only meant Tesla and SpaceX when you didn’t even mention them.
Unrelated to this spacex thread but I think you need to relax. Its perfectly healthy to have opinions but maybe take a step back and think about how much topics matter to you and if they are worth a ton of effort and anxiety.
I am relaxed. It's just that these technocrats are literally trying to move the world into a post-capitalistic technofeudal society where they are rich and everyone else suffers. These IPOs are going into index funds and fleecing our retirement funds to make Musk a trilionaire? We are marching to the economic gallows and cheering it on. 2008 all over again but probably worse.
Maybe simplify that thought into "people just like to make money" and think about it from that perspective. Also one dudes whole life is so insignificant in the grand scheme of things. There is no grand importance to anything. So just do the best you can for those you love.
I expect there will be a pump-style announcement after the lockup expires. That's been the pattern: if line go down, make a wild pronouncement to make it go up again
I hope its a really well planned announcement.
He has a trillion dollars of collateral on which he can borrow money with
They might not have actually calculated what space is worth. Rationally speaking, doing anything up there is expensive, and there's currently little to no economic value in exploiting it
As much as I hate to say, Musk has massive appeal to retail investors who are True Believers who want to be rewarded for their fealty. The ones who poured their life savings into TSLA before it went hockey-stick and split and want to get in on that again
I can list a dozen, very rational reasons why SPCX makes no sense, but it will fall on deaf ears. Retail investors do not need to be rational when there are enough of them to buy and hold
this is goodwill
I wouldn't lose too much sleep over not being able to only buy into Starlink. The satellites have a 5-7 year lifespan so the entire constellation requires constant upkeep, and it's not clear the current subscription costs are reflective of what a true cost of the service is
Part of why Starlink exists because it keeps SpaceX rockets busy while being an appealing side-hustle. As a bonus, SpaceX can claim very low unit economics per launch because they can launch Starlinks on their most-used, oldest Falcon 9 boosters for the cost of refurb+fuel
Ride the train while it's running. Just get off before others do.
Because it’s mission driven and employees have been given stock options since 2015, which in turn has made 4400 of them millionaires+. There are many areas of growth for SpaceX and the mergers of Tesla is inevitable, as hinted by Shotwell.
Starlink is in a rapid growth phase of deployment and as it’s refined it will cost less in production and require less deployment costs. The bread and butter of SpaceX is its own satellite deployment.
Just an interesting tidbit: the mass simulators on the recent starship flight ended up around 45t, which is the heaviest payload anyone has flown since I believe the 90s. It was just a few hundred m short of LEO, and it had several engines out.
Pretty sure starship costs a good deal more to launch than Falcon heavy, which is the source of the price.
Space travel costs lower significantly the larger the mass-to-orbit capability. So I’m sure it costs more now as a matter of still being in testing, but ideally once it is operational costs will drop likely lower than Falcon Heavy, if not Falcon 9.
Does it make money for TSLA?
yes? they sell it as an upgrade and as a subscription.
I meant substantial money. Like 50-100 billions / year to back TSLAs growth story.
China is the only competition and it is not doing well in the reusable rocket part at all.
Counter point: Elon has 80% of the world's space-business and does it at with 95% savings.
To put this into freedom units - You could put a gamig computer in space for the price it costs to buy one, compared to before when you could do it for the price of a new Ford F-150.
It's a market that's unexplored because the payload prices have gatekeeped it for generations. Now we will have to see if the market is scalable. This is the real test. Simply saying Space and AI are not the future will age like milk.
It's Elon musk. That's the only thing that people care about.
Elon stuff is always just crushing competitors. No matter what the stock price is its just always hard to invest in the alternatives. Invest in companies who still run on windows xp or elon.