Thoughts on Current SpaceX Pullback

[RSL]

I thought SpaceX was showing some support at $150.00 but was obviously wrong. Anyone think this is the bottom or is there further to go? I know trying to time the bottom is difficult. But i would like to add some more shares at or near the bottom. What do you investment gurus think will happen here.

 

[Noah Hutchens]

I thought SpaceX was showing some support at $150.00 but was obviously wrong. Anyone think this is the bottom or is there further to go? I know trying to time the bottom is difficult. But i would like to add some more shares at or near the bottom. What do you investment gurus think will happen here.

I was lucky enough to buy some shares at the IPO price of $135 a share (I think that was IPO price) and I’m honesty expecting it to drop below that price in the near future.

 

[Rimbaud]

V hard to know. Nothing overtakes charts (suppport levels) like sentiment and sentiment is mixed. SPCX did a big bond offering, and it quickly went pear shaped. A lot of doubts being raised about all of the promises of the company - asteroid mining, million people on mars, etc - but who cares. If the guy succeeds at any of this, or even a sliver of what he said in S1, wow. Lots of the options flow is mostly one way, loads of buyers, and put sellers. Hard to know if institutions took profits from stock allocations, or if retail is just banging SPCX. If you like the name, put in a limit order to buy lower, perhaps, or look to sell puts and get paid to buy lower, if you understand those trades. Prolly not a good idea to put all of your eggs in the name until trading matures. When is first earnings report? That will tell you most everything you want to know. Full disclosure: was offered to chance to buy at $135 IPO price before stock traded. Indicated 4,000 and got 100 shares. Still long and no plans to sell. Also own TSLA, bought about 100% lower when my young son told me Elon Musk was creating the future.

 

[Corylax18]

I know that the Fundamentals don't matter any more, but if we look at the actual numbers, the bottom is Zero.

The company is all debt and its only two regular customers (NASA and Starlink) are also all debt. If those two customers go away, the remaining launch volume doesn't come anywhere close to supporting the existing size of the company, let alone expansion or profitability.

There is no Profit/Free Cash flow, there is no path laid out to achieve profits or free cash flow. The SpaceX IPO only happened because the "Investors" that Elon fleeced on the Twitter takeover wanted their money back. They got it back, at the expense of the regular, unsophisticated investor.

I would ride a Dragon capsule to space and back, tomorrow, if the price was right. But there are only so many people who can splash six figures on a ride to space. Eventually, I think space travel will be like air travel, a pretty regular thing for many people. But we are still a long way and trillions in investment away from that. The economics of the Falcon 9 don't support 4 or even 5 figure ticket prices for space tourists and there is no where to go/nothing to do in space, its just a couple laps in orbit, then splash down.

Starship is designed for Moon/Mars missions (not orbital flights) and again, the fuel requirements alone preclude any kind of tourist use. It will be used by governments and large institutions if a business case ever does materialize.

I know some people will try to compare SpaceX to Tesla or even Amazon. Both lots billions for years, but they were selling real products, to an actual customer base and building out the required infrastructure to reach economies of scale. I just dont see that happening with SpaceX in the next decade, if ever.

 

[Odinsraven]

Starlink alone is worth the price .....and space x cost to space is getting xheaper by the day ......Ibternet anywhere has nassive potential wirhout competition yet ..and for a few years ...Space X launched a booster for the 36th time.....But to be fair I dont own any shares ....nor will I. USA stocks are too much hassle for foreigners.

 

[RSL]

I know that the Fundamentals don't matter any more, but if we look at the actual numbers, the bottom is Zero.

The company is all debt and its only two regular customers (NASA and Starlink) are also all debt. If those two customers go away, the remaining launch volume doesn't come anywhere close to supporting the existing size of the company, let alone expansion or profitability.

There is no Profit/Free Cash flow, there is no path laid out to achieve profits or free cash flow. The SpaceX IPO only happened because the "Investors" that Elon fleeced on the Twitter takeover wanted their money back. They got it back, at the expense of the regular, unsophisticated investor.

I would ride a Dragon capsule to space and back, tomorrow, if the price was right. But there are only so many people who can splash six figures on a ride to space. Eventually, I think space travel will be like air travel, a pretty regular thing for many people. But we are still a long way and trillions in investment away from that. The economics of the Falcon 9 don't support 4 or even 5 figure ticket prices for space tourists and there is no where to go/nothing to do in space, its just a couple laps in orbit, then splash down.

Starship is designed for Moon/Mars missions (not orbital flights) and again, the fuel requirements alone preclude any kind of tourist use. It will be used by governments and large institutions if a business case ever does materialize.

I know some people will try to compare SpaceX to Tesla or even Amazon. Both lots billions for years, but they were selling real products, to an actual customer base and building out the required infrastructure to reach economies of scale. I just dont see that happening with SpaceX in the next decade, if ever.

I thought since before the IPO Starlink was merged into SpaceX as a wholly owned subsidiary? And that Starlink was the cash cow providing significant funds to the congolerate?
I read $11.4 billion in revenue and $4.42 billion in operating volume. 10 to 12 million subscribers plus the US military. What am i missing? And this does not include the Compute deal worth a reported $25 billion per year. The Starlink setup is certainly a real product being sold to world wide consumers.

 

[Alistair]

I thought since before the IPO Starlink was merged into SpaceX as a wholly owned subsidiary? And that Starlink was the cash cow providing significant funds to the congolerate?
I read $11.4 billion in revenue and $4.42 billion in operating volume. 10 to 12 million subscribers plus the US military. What am i missing? And this does not include the Compute deal worth a reported $25 billion per year. The Starlink setup is certainly a real product being sold to world wide consumers.

I encourage you to read the S1. It's... enlightening to say the least. Pretty funny too honestly.

If that's too much effort, which fair enough, this is an entertaining, if rather brutal summary. Thoroughly worth a watch:

Easy enough to fact check everything he says as well, it's all in the S1, and it's publicly available.

 

[Corylax18]

I thought since before the IPO Starlink was merged into SpaceX as a wholly owned subsidiary? And that Starlink was the cash cow providing significant funds to the congolerate?
I read $11.4 billion in revenue and $4.42 billion in operating volume. 10 to 12 million subscribers plus the US military. What am i missing? And this does not include the Compute deal worth a reported $25 billion per year. The Starlink setup is certainly a real product being sold to world wide consumers.

You're missing a lot. I used to work in the Satellite internet industry and LEO is not the answer, for lots of reasons, but lets focus on the main one. Attrition. 1-4 satellites fall back to earth and burn up in the atmosphere every day. Lets call it 14 a week. A typical Falcon 9 Launch carries 20-24 satellites, so they have to launch a Falcon 9 3 weeks per month, every month, just to maintain the constellation.

Lets use the low end of the reused falcon 9 cost spectrum at $28 million a piece, 39 times a year. That's just over a billion a year, at a minimum. If we use the average cost of a new or used Falcon and add, lets say 2 more launches per month for growth, we're looking at $3.2 billion, just for launch costs. Elon openly says they're spending another 3 Billion a year in Starship dev costs.

Then we add in the costs to run the business, build the satellites, actual growth, Elon's absurd bonuses, R&D etc. You can burn through 11 billion in Revenue(not profit) like its nothing. I've never heard of "operating volume" as a financial metric, but it isn't a synonym for profit. Weather they are one company, or two they aren't profitable and wont be if a LEO constellation is their plan for the future.

The "compute deals" appear to be more of the same in the AI "industry". Large corporations passing handfuls of shit in a circle and calling groundbreaking. X AI (super creative name) is "selling compute capacity" to two companies while at the same time "buying compute capacity" from at least 3 other companies. At best, they're just a bookie, profiting from the price moves in a commodity.

 

[Alistair]

You're missing a lot. I used to work in the Satellite internet industry and LEO is not the answer, for lots of reasons, but lets focus on the main one. Attrition. 1-4 satellites fall back to earth and burn up in the atmosphere every day. Lets call it 14 a week. A typical Falcon 9 Launch carries 20-24 satellites, so they have to launch a Falcon 9 3 weeks per month, every month, just to maintain the constellation.

Lets use the low end of the reused falcon 9 cost spectrum at $28 million a piece, 39 times a year. That's just over a billion a year, at a minimum. If we use the average cost of a new or used Falcon and add, lets say 2 more launches per month for growth, we're looking at $3.2 billion, just for launch costs. Elon openly says they're spending another 3 Billion a year in Starship dev costs.

Then we add in the costs to run the business, build the satellites, actual growth, Elon's absurd bonuses, R&D etc. You can burn through 11 billion in Revenue(not profit) like its nothing. I've never heard of "operating volume" as a financial metric, but it isn't a synonym for profit. Weather they are one company, or two they aren't profitable and wont be if a LEO constellation is their plan for the future.

The "compute deals" appear to be more of the same in the AI "industry". Large corporations passing handfuls of shit in a circle and calling groundbreaking. X AI (super creative name) is "selling compute capacity" to two companies while at the same time "buying compute capacity" from at least 3 other companies. At best, they're just a bookie, profiting from the price moves in a commodity.

Plus of course per SpaceX's own S1 filing, Starlink, the rockets, all the space stuff... is irrelevant to the supposed valuation.

93% of their claimed future revenue streams are just from their AI business unit. Per their own Total Addressable Market summary.

A TAM summary which, incidentally, is a laughable number that doesn't hold up to even the most cursory examination.

Anyhow... at the IPO $135 dollar price, you're paying roughly $1.63tn for Grok... which was sold to SpaceX for $250bn not even 3 months pre-IPO...

Grok isn't the market leader, isn't posting the growth of its competitors, isn't the leading model by any benchmark, and has a roughly 2.5% share of the AI market.

By comparison, OpenAI has a roughly 50% share of that market, is (arguably) the market leader, has a far superior product to Grok, has more revenue, and is planning to IPO for $1tn.

Even if the whole AI thing isn't a speculative bubble and it truly is the future, how does SpaceX's 2.5% market share justify 1.5x the valuation of OpenAI's 50% share of the same market?

The Cult of Elon. That's the value proposition here. Everything else is just fluff.

It was worth purchasing the IPO, and it was worth getting out on day 1.

Retail investors are dumb and I was very happy to take their money. But this is the world's biggest meme stock, and should be traded as such.

 

[RSL]

Then we add in the costs to run the business, build the satellites, actual growth, Elon's absurd bonuses, R&D etc. You can burn through 11 billion in Revenue(not profit) like its nothing. I've never heard of "operating volume" as a financial metric, but it isn't a synonym for profit.

Was supposed to be operating profit not volume.

 

[Rafiki]

I bought a couple hundred shares of SpaceX after the IPO when it started dropping from the high; immediately covered it for $41/share. The stock has a negative P/E and $0 in dividends so the only return on investment is increased value. The stock lives on hype, which to me is just fine. My strike price was close to "in the money" so I'm fine with it tanking because it will likely not be called away from me and I'll just place another call option. The risk of course is that it will sink too low but I'm going to bet that it will settle at a reasonable price; a risk I'm willing to take. I'm not talking about a huge amount here so [shrug].

Morgan Stanley has a price target of $300 over the next 12-18 months. Personally I think that is aggressive but I've been wrong before.

 

[Hogpatrol]

AI and Space X are just plain bubblicious! Sit on cash and wait for this euphoria to turn into despair. Oh and go ahead and cross the road. They'll stop for you.

 

[Killingtime]

Starlink alone is worth the price .....and space x cost to space is getting xheaper by the day ......Ibternet anywhere has nassive potential wirhout competition yet ..and for a few years ...Space X launched a booster for the 36th time.....But to be fair I dont own any shares ....nor will I. USA stocks are too much hassle for foreigners.

I like Elon and owned Tesla for years but will probably not be directly space x. I got excited at first but when they started talking over 1 trillion I was out. There is no profit except starlink and it made around 4-6 billion in profitability (which is great at this stage) but they take 100% of that and throw it into Xai that he sold to space x and then admits it needs to be totally rebuilt. I seem a lot of other companies that have a better fundamentals and growth potential then another ai black hole. People forget Amazon ipo’d at sub 1billion not 1.5 trillion. Hard to get a massive return on that if the market ever comes back to reality. No matter how cool the company may be.
I used to own vigin galactic then I saw they said the space travel economy was projected 5 years ago to be around 13 billion with people looking to travel In space I sold fortunately at a good profit thinking how can they have the companies valued more then the projected market total.

 

[Hornedfrogbbq]

You all crack me up.