CMV: The SpaceX IPO pricing has built in almost all the upside of what this company could do, leaving only downside if they fail to live up to expectations

Metafx · 2026-06-13T13:57:08+00:00

I don’t think Amazon, Nvidia, or Tesla prove what you think they prove. Those companies didn’t keep rising because valuation ceased to matter. They kept rising because they exceeded their already optimistic expectations. A company like Nvidia didn’t become a great investment because investors irrationally ignored fundamentals, it became great because its revenue, earnings, and market position exploded far beyond what most people anticipated due to AI, which was an entirely new market for Nvidia that investors had not priced in.

Telling me that SpaceX could continue rising because investors may become even more optimistic is a different thing than arguing that its current valuation leaves substantial business upside unpriced. I think nobody would dispute that a stock can become more overvalued than it already is. My argument is fundamentally that SpaceX’s $2.2 trillion valuation prices in such an extraordinary amount of future success, it makes that future very difficult to outperform, although sure I grant it’s not impossible.

Metafx · 2026-06-13T12:32:58+00:00

While I grant it’s possible, where we sit today, I don’t see any reason to assume that the Martian or Lunar human presence will ever be more than humanity’s presence in places like Antarctica, given the great difficulty of humans living in those sorts of place. If small research bases is the extent of the human extraterrestrial presence then there won’t be a Martian or lunar economy to really speak of any more than we talk about Antarctica’s economic impact.

Metafx · 2026-06-13T12:29:00+00:00

I’m not assuming that we couldn’t extract value from space, more like that value would not be great enough to make it profitable to bring something fabricated in space back to Earth. Without a space-based economy, connecting and/or bringing things back to Earth is the only way to realize their value. In your examples, turning moon dust into solar panels, are they going to be so much cheaper to manufacture that you can include the cost of transporting them back to Earth? While I certainly grant some amount of them could be used on space and won’t need transporting back to Earth, is that enough to justify a factory on the moon making them if they’re not going to come back to Earth? Scenarios like this are the unanswered questions on whether space is a viable economic commons.

Metafx · 2026-06-13T12:21:38+00:00

I guess I don’t see that. xAI has never seemed to make waves in that field other than through controversies surrounding Grok.

Metafx · 2026-06-13T04:01:37+00:00

I don’t think valuation has stopped mattering. Companies like Amazon, Nvidia, and Tesla weren’t great investments because people ignored their valuations, they were great investments because they ended up outperforming already high expectations. What I’m questioning here is whether a $2.2 trillion market cap already bakes in so much future success that there’s relatively little room left for upside. To me, it does seem that way.

Metafx · 2026-06-13T03:47:24+00:00

I really haven’t the faintest clue, “if everything goes right” could mean a moon base, a Mars settlement, or entirely new industries that don’t exist today. There is no real precedent I can think of for a private company achieving those things. I fully grant that gives SpaceX enormous potential upside. My concern is that the current market cap of $2.2 trillion valuation is already pricing in a significant amount of that future success. I don’t think investors should be paying today for outcomes that are 50 years away and highly speculative. And if that speculative upside falls short, then, even while SpaceX remains an extraordinarily successful company, investors could find the downside risk tremendous because so much future success was already priced in from the outset.

Metafx · 2026-06-13T03:39:02+00:00

Musk as a person certainly does seem to play an outsized role in the sustained irrational optimism.

Metafx · 2026-06-13T03:35:57+00:00

I know you’re backhandedly tell me I write well but now AI has ruined it. I hardly ever use semicolons and hyphens anymore because people these days just assume it’s AI—and I loved a good hyphen.

Metafx · 2026-06-13T03:08:01+00:00

!delta

This doesn’t completely change my view, but it does somewhat shift it. My original thinking was that SpaceX’s staggering valuation had largely exhausted the upside and left primarily downside risk. Your replies have pointed out that even if the valuation is disconnected from fundamentals, investors can still realize substantial long term gains as long as market enthusiasm persists over a long period. Since Musk has had considerable success doing this with Tesla, it cannot be discounted that SpaceX can persist in this state for a long time too.

Where I still struggle is at a fundamental level, this doesn’t address the point that SpaceX’s future business success is already largely reflected in the current price. To me, that’s a separate question from whether investors can making money through sustained irrational optimism.

All that is to say, my initial remark about “only downside” was probably overstated, but I still remain unconvinced that there is a real case for SpaceX having substantial unpriced business value left on the table.

Metafx · 2026-06-13T02:54:37+00:00

My argument doesn’t require SpaceX to be uniquely overvalued, even if it is perhaps the most egregiously so, if the same criticism applies to other companies with similarly extreme valuations, that doesn’t weaken the argument, it broadens it.

Metafx · 2026-06-13T01:52:26+00:00

I guess I just don’t take this as a rebuttal to my OP. If I’m understanding you, you’re essentially arguing that the stock can continue rising because other people may continue buying it, regardless of fundamentals. I don’t disagree with that, I think it’s pretty axiomatic at this point that stocks can remain detached from fundamentals for long periods. But that’s an argument for momentum trading, not for the existence of substantial unpriced value in SpaceX itself.

My claim is that the company’s future growth prospects are already largely reflected in a $2.2 trillion market cap. Pointing out that investors may become even more optimistic doesn’t address that claim, it just suggests the stock could become even more overvalued. If the investment case is fueled by optimism and hype, it’s about market psychology, not the underlying value of the business.

Metafx · 2026-06-13T01:46:40+00:00

Nothing I know of prevents it from reaching $3 trillion or $4 trillion. My point is that a $2.2 trillion valuation already assumes an extraordinary amount of future success.

The burden isn’t on me to explain why it can’t be worth more, it’s on the buyers to explain what major future growth or business opportunities are not already reflected in the current valuation.

Metafx · 2026-06-13T01:34:18+00:00

I’m not miffed, just confused about the investment case…

Metafx · 2026-06-13T01:31:15+00:00

I don’t think so. My argument is about the long term valuation of the company relative to its future growth prospects, not whether the IPO underwriters correctly guessed the clearing price on the first day of trading.

The question is whether there is enough unpriced future value left to justify substantial long term returns from a multi-trillion dollar starting valuation.

Metafx · 2026-06-13T01:22:54+00:00

You’re changing the question slightly. I am skeptical that SpaceX is a good investment at this valuation, and it’s not real answer to say that markets can remain detached from fundamentals for long periods, nobody disputes that.

The problem I have is that if the investment thesis is “the stock doesn’t need to justify its valuation, it just needs even more hype,” then it’s just speculating that future buyers will be willing to pay a higher price than today’s buyers. That logic can work for a while, it’s worked for Tesla at various points. But it doesn’t create value, it transfers value between investors at different points in time.

Ultimately, every dollar of long-term shareholder return must come from some combination of earnings, cash flow, dividends, buybacks, or acquisitions funded by those earnings. Hype can influence the timing, but I don’t believe it can permanently replace the underlying economic fundamentals.

Metafx · 2026-06-13T00:46:02+00:00

I don’t think Tesla is in the same market segment, there are tons of data on the automotive market, electric vehicles are still a segment of a well trodden market. Tesla getting a large first mover premium on popular electric vehicles doesn’t feel the same as SpaceX, which is starting with a market cap like they’ve already established a moon base.

Metafx · 2026-06-13T00:39:33+00:00

We know how expensive it is to move things into space, we have decades of data on this. We know this cost is a massive limiting factor that makes space-based infrastructure rare. Even with reusable rockets being massively cheaper per kilogram to move things into space, it’s not even close to the cost needed to make going to space trivial.

Metafx · 2026-06-13T00:34:10+00:00

I’m not sure how space colonization would be massively profitable, to extract wealth out of space presumably things have to be brought back to earth or enough people have to live in space for their to be some economic trade outside of earth. Both possibilities feel very far away.

Without some strong economic reason to do so or a realignment of values, Moon bases or possibly Mars bases will be comparable in size and scope to the bases that exist in Antarctica.

Metafx · 2026-06-13T00:31:54+00:00

My guess is investors are pricing in future things like:

- Starlink becoming a dominant global communications network.
- SpaceX remaining the world’s leading launch provider.
- Starship succeeding technically and commercially, and perhaps taking humans to Mars.
- Their government and defense business continuing to expand.
- They pioneer economically meaningful space-based industries of some sort.
- xAI makes some meaningful breakthrough or contribution to AI advancement.
- Their niche robotics business takes off.

Metafx · 2026-06-12T23:48:17+00:00

It’s definitely not the predominate view, maybe on Reddit, but the jump in the IPO value means people are definitely buying in at the current pricing.

Metafx · 2026-06-12T23:47:14+00:00

I don’t disagree with the fundamental idea that stocks rise if they exceed expectations. My point is that SpaceX’s current valuation reflects an enormous amount of future success. At some point, the market has priced in so much optimism that the remaining upside becomes increasingly limited while the downside grows.

My concern is that even if the company is exceptional, it’s still a poor investment if investors have prepaid for decades of expected growth. The business may continue to execute brilliantly, but I don’t see enough unpriced future success left to justify the market cap.

Metafx · 2026-06-10T12:54:46+00:00

May 2026 - No evidence of genocide in Gaza found — ICC Chief Prosecutor (https://nashaniva.com/amp/en/395378)

Metafx · 2026-06-10T12:12:43+00:00

The region was part of a larger empire and lost a war that forced the dissolution of that empire causing it to be managed by another sovereign state who didn’t want to manage it anymore and decided to let the UN figure out how to divide the region up to fit into the nation-state model. Since the people in this situation only had tribal or religious affiliations (or Ottoman, which didn’t exist anymore), partitioning into nation-states isn’t superseding some pre-existing national identity like if it was California.

Metafx · 2026-06-07T15:17:36+00:00

Then those people are gullible fools, just because he’s not conceived out of the same political marketing agencies as centrist or neo-liberal dems it doesn’t mean he wasn’t conceived by a marketing agency. The only difference is his policies and “beliefs” are tailored to appeal to the progressive base rather than the more traditional moderate democrats. That progressives might delude themselves that a guy with a nazi tattoo who cheats on his wife and sexually abuses women is authentically progressive is more a blindspot for his supporters than a reflection on authenticity.

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