Discussion
A $1.75 Trillion IPO Would Be Overpaying 30% for SpaceX
righthand: Wall Street, ICE jobs, bs AI valuations, etc is proof that there are just enough stupid people in this country to ruin it all for the rest of us.
malfist: An passive investors are going to get hosed by this thanks to NASDAQ cooking the rules to favor Elon and his band of misfits.No longer will there be a year of price discovery for index funds, 15 days. Meaning index funds have to buy it at the peak of the hype cycle. Will be a huge wealth transfer from mom and pop retirement accounts to the ultra wealthy.
yandie: Now I need a fund that will honor a year of price discovery rather than 15 days. Any recommendations?
paxys: Everyone is so confident in their reading of tea leaves
sharemywin: Not bad for about $12-$16B in total actual revenue.net income probably: $1.5B – $3BP/E:500-1000Of course people will trip overthemselves to buy it up.
arealaccount: According to commentators on other threads people with any index funds will be automatically buying, no need to trip over ourselves
heyitsmedotjayb: I remember when this happened with Nortel!
genidoi: > Starship at $170B is pure option value on technology still in advanced testing.The argument that Starship is somehow an experimental/unproven technology that might fail to materialise was absurd but plausible sounding before flight 1, there were many new technologies simultaneously being deployed to a single launch system in one go.But after 3 tower catches of the booster demonstrating centimetres of guided precision of the entire stack, this is becoming a tired argument.I know the author is not making that case at all here, but it seems like one the core reasons to undervalue SpaceX is that Starship might not work out, and this all sounds exactly like how reusability might not work out at all for the Falcon 9 from 10 years ago.
soperj: > and this all sounds exactly like how reusability might not work out at all for the Falcon 9 from 10 years agoI think a lot of it depends on whether they can make the reuse of the second stage work without having to redo stuff constantly like the shuttle. Reusing the booster will obviously save tons of money and make launches cheaper, but they're competing with themselves here. How big is the launch market with cheaper launches? We don't actually know.
saadn92: The xAI piece is the one that stands out to me. $258B for a lab that's burning $1.46B/quarter against $430M revenue, valued almost entirely on a merger anchor from four months ago.
malfist: Legally, any fund that tracks the NASDAQ 100 must follow the rules set by NASDAQ, so you'd want something that is neither a total market index, nor tracks the NASDAQ. Something like an S&P500 index would work
dmoy: What is an example nasdaq 100 fund that isn't float adjusted?
proteal: It’s also one of the thinnest floats IPO’ing. They’re only selling less than 5% of the company. That introduces a lot of sensitivity in the valuation, not to mention there exists a bit of game theory around fund managers needing to join in to maintain nominal returns with their peers.Check out Matt Levine commentary, which goes into more detail (SpaceX Indexing) https://www.bloomberg.com/opinion/newsletters/2026-03-31/are...
jgbuddy: Were people overpaying 30% for tesla in 2010?
boringg: Anyone in this thread know how much SpaceX investors got diluted when they bought xAI/GROK?
charcircuit: What law prevents someone from choosing to buy stocks from the NASDAQ 100 however they want for a fund?
davey48016: You can make a mutual fund or ETF with any stocks you want, you just can't call it a NASDAQ 100 fund if you're not tracking the NASDAQ 100 index.
ChrisArchitect: Related:The SpaceX IPO: retail investor noteshttps://news.ycombinator.com/item?id=47612775SpaceX files to go publichttps://news.ycombinator.com/item?id=47604155
ddp26: Yeah, it's wild. But it's not like the P/E should be 30, what do you think would be fair?That's the thing about SpaceX, some businesses are real businesses that can be modeled in normal ways, like the government launch contracts, and to some degree starlink.Others, like ~all of xAI, and the starship stuff, are being valued completely independent of revenue. I predict the IPO investors will generally follow the analysis consensus today with those eye-popping numbers.
Noaidi: I mean, shouldn’t the price to earnings ratio be 1? Anything higher or lower is just speculating or other words, gambling.
lotsofpulp: At the extremes, taking the next step is speculating because you might trip and fall and hit your head.
elevation: Any funds you'd recommend that would preserve the legacy 1 year watch period?
dmoy: The float adjustment probably handles this for you? The tiny amount of float of that $1.75T means that for any large total market or s&p or whatever fund (VTI, SPY, etc), SpaceX is going to be a minuscule fraction of the fund.Apple has a float of >99%. SpaceX is going to come out with 3-4% float. Since all big serious total market / whatever index funds are float adjusted, this means that SpaceX will be treated more like a company with $45B market cap, not $1.5T or whatever.If you're buying most index funds, you should literally not care about this.If you buy VTI, then SpaceX is going to be like what, <0.1% of the fund? That is noise.
danny_codes: Which is how Elon gets away with fleecing the retails. Someone with 100k in VTI is giving $100 to Elon at a p/e of 1000.You have to hand it to him, he’s the best grifter we’ve seen in years.
bluecalm: You need enough customers to make it profitable at reasonably low expense ratio.
jdross: It was 1T post merger with xAI being 250B of it, SpaceX being 750B
Izikiel43: They caught it 3 times already!?I missed 2 and 3 it seems.
spprashant: I am not smart with stock legal-ese but I pasting something I found in a different article here.> To balance index integrity and investability, Nasdaq proposes a new approach for including and weighting low-float securities (those below 20% free float). Each low-float security’s weight will be adjusted to five times its free float percentage, capped at 100%. Securities with more than 20% free float will continue to be weighted at full, eligible listed market capitalization, while those below 20% free float will be weighted proportionally to preserve investability.> The rule reportedly includes a 5x float multiplier for low-float stocks, which would require passive vehicles to treat SpaceX as if it had significantly more tradable shares than actually exist, essentially forcing funds to chase the price.It sounds to me like a way to increase demand for low float stocks by treating the float higher than it actually is. Glad to hear the explanations about this.
maxerickson: How are they doing with their mass to orbit projections?
JumpCrisscross: > They’re only selling less than 5% of the companyWait for the lock-up terms.
ddp26: As I wrote in the piece, I'm extremely skeptical that xAI should be valued as if it is a frontier lab.But as you say, going back to the xAI + SpaceX merger, analysts consistently seem to value it as if it is, so I predict the public will too, at IPO time.
kibwen: The question is not even whether or not Starship works. Starship is, in theory, designed with the idea of getting many, many payloads to Mars. However, getting payloads to Mars is not currently something that anyone is paying for; even NASA isn't going to focus on Mars for at least another decade (likely more). And in the meantime, it's not like we don't have rockets capable of getting payloads to Mars (the Saturn V was fully capable of doing so in the 60s). Likewise in the meantime, the Artemis plans that look to require a dozen+ launches for a single moonshot aren't painting Starship in a favorable light.So what is the near-to-medium-term economic prospect of Starship? That's the question. You can't just say "bigger rocket make more money", because there exists a useful upper to the size of payloads that companies actually want to ship to LEO in practice. To use an analogy, we have jumbo jets, but most flights are not on jumbo jets.
fastball: [delayed]
tliptay: Grok: lots of competitors & my 4th choice in LLM models.Starship: zero competitors & potentially makes humans inter-planetary.Seems crazy if investors put more value on Grok.
taurath: When index funds became such a default I knew they’d change the rules.They’re taking everything thats not nailed down. A wealth tax is the only way, it cannot continue like this.
gruez: Who's "they"? Billionaires? Wall st? SpaceX insiders and investors?
lxgr: But consider that they will eventually own the entire observable universe excluding Earth! /s
croes: Yes, and they still do
arein3: Is musk derangement syndrome a thing?
gigatexal: Yeah imma get out of index and hold my basket and just rebalance. This is dumb. Why bend the rules for a trillionaire?
JumpCrisscross: > Legally, any fund that tracks the NASDAQ 100 must follow the rules set by NASDAQNo? Contractually, maybe. But legally you can do whatever you want with index constructions.
malfist: You might be surprised to learn that the stock markets are heavily regulated.
lxgr: Are indexes not covered by copyright, even if you don't mention the underlying data source by name?If they are, you'd only get a license when accepting their terms.
AlexandrB: The tower catches are great, but the payload rating has been reduced several times now[1] and with it the economic argument for how Starship will make launching much cheaper than today as well as suitability for lunar/Mars launches. For Starship to be revolutionary enough for this kind of valuation it has to not just work, but outperform current solutions.SpaceX has basically admitted as much by promising Starship 2 & 3 with larger payloads (that Starship 1 was already supposed to deliver).[1] https://www.americaspace.com/2024/04/20/starship-faces-perfo...
fastball: That article is two years old. They've already progressed to Starship 2 and are going to launch Starship 3 imminently, which has Raptor v3 engines onboard.
JumpCrisscross: > An passive investors are going to get hosed by this thanks to NASDAQ cooking the rulesI’m genuinely confused how a passive investor winds up tracking the NASDAQ 100 versus a broader index.Also, if you’re picking and choosing your exposures, you aren’t passive.
lxgr: That sounds like a "no true scotsman" argument. Even passive investors need to pick some methodology of how to pick assets and how to relatively weigh them, and while you can make that as mathematically simple as possible, it's arguably an active decision.Or would you say that e.g. an ETF tracking MSCI ex-US is not a passive fund?
bitmasher9: I’d also argue that "passive investor" applies more to the buy and hold strategy when paired with low engagement in the account (few transactions, or scheduled transactions).I’d consider someone that puts $50 into Coca Cola stock every paycheck a passive investor
whattheheckheck: Open your eyes? Everyone on the top 1000 Forbes and at trumps inauguration?
mikkupikku: Weapons in space, yes. Government constellations are SpaceX's best opportunity. As for anything else, the market for anything bigger than Falcon 9 is very small. Elon Musk didn't even want to proceed with Falcon Heavy because there isn't much market for even that, but Shotwell managed to convince him that having Falcon Heavy would actually help sales of Falcon 9, by inducing the government to take SpaceX more seriously.
kibwen: Agreed. The real bull case for SpaceX is that the US government will use it to aggressively militarize LEO.
motbus3: By now, questioning "who are they" is naive or plain weak.
oa335: Not legally, only by contract/specification. Funds could get sued for deviating from the index, but funds generally have a decent amount of discretion in my experience in how they handle rebalancing.
bobtheborg: Having never really looked at valuations, my ignorant mind can get from Starlink's 10M subscribers to a $380B valuation. If you make $100/mo/user that's 12B/yr and that with a higher 50x P/E ratio is 60B. If you go to 100x, that's $120B.
Octoth0rpe: Starlink's maritime, roving, airplane, and military options are all much more than $100/mo/user. Not sure how much that closes the gap, but it's _something_.
daedrdev: Like imagine how much better the James web could have been with such a large and cheap launch vehicle.
kibwen: That's not how this works. The JWST was limited by the size of its faring, but increasing the size of the faring doesn't mean they'd ship a less complex telescope with the same functionality; they'd ship an equally-complex telescope with more functionality. Better for science, yes, but that doesn't translate to more expenditure that could be captured by the launch company. And that still relies on a government that gives a damn about funding science, which is not not the direction that the US is heading in.
fastball: [delayed]
malfist: A broader index that tracks the NASDAQ tracks the NASDAQ 100 and is impacted by this rule.You buy VTI, you're impacted.
germinalphrase: “potentially makes humans inter-planetary”What is the realistic, non-science fiction appeal of this?
stouset: I would wager minerals mining and tourism are probably the only meaningful revenue sources in our lifetimes.
mikkupikku: I assume "extremely skeptical" is you being generous, is there anybody other than Elon who says xAI/Grok are SOTA? The only thing anybody says about it is that it's only good for porn, but local models do porn too so xAI has no moat or edge at all as far as I can see.
ahahahahah: > I assume "extremely skeptical" is you being generousI'm not sure that's the case. Every value in this forecast is absurd, I actually think the author is sincere in there feeling that they are being extremely skeptical.
compiler-guy: These premises may or may not make sense, but the thing that matters is capturable revenue.Humans being interplanetary would be an amazing technical tour de force. But relatively speaking, there isn’t much revenue there.
malfist: These premises may or may not make sense, but the thing that matters is capturable revenue.European settlers being on the north american continent would be an amazing technical tour de force. But relatively speaking, there isn't much revenue there.
WalterBright: Jamestown was a failure.The Pilgrims starved their first year.
fastball: Of course not. If the P/E was 1, every single public company would be immediately gobbled up by Private Equity firms, who would make their money back after a few years of operation and the rest would be pure profit.
Noaidi: Of course they would! If the P/E of a company is 1.1 it is overvalued by definition so why would anyone buy an over valued company?So you have to be a complete idiot to but stock in a company with a P/E of 500!
darth_aardvark: > Of course they would! If the P/E of a company is 1.1 it is overvalued by definition so why would anyone buy an over valued company?This is obviously untrue. Would you sell a box that spits out $1 million dollars a year for 1 million dollars?
scythe: The unknown subject is a valid construction in language. It is not necessary to be able to answer "who's they?". It is semantically equivalent to saying "I knew the rules would be changed."There are also perfectly ordinary situations in which this pattern is used to imply the influence of an unknown party. "They built a bridge over the river." Clearly the speaker does not believe that bridges over rivers construct themselves. She doesn't need to know who built the bridge.
venusenvy47: The booster is definitely looking good, just like the Falcon 9 booster is very reliable. The big question for me is the upper stage, and whether they will be able to reuse anywhere near as often as they claim. It is so much more complex than the Falcon upper stages, which aren't reusable very quickly. It seems they have a lot to learn about upper stage reusability.
gruez: Someone who can't articulate who the villains are out of a pre-selected list and has to fall back to personal attacks is pretty "weak" as well.
Teever: If you were to apply the principle of charity[0] to the person you originally asked the question to, who do you think that they would mean by the word 'they' in this context?[0] https://en.wikipedia.org/wiki/Principle_of_charity
stouset: They’re also reducing the float requirements, which is absolutely insane. As a passive investor with significant assets outside of tax-protected retirement accounts, I am beyond livid. If I have to switch investments to move away from the rules being changed out from under me, it will result in enormous tax consequences.I don’t tend to let my emotions out this much here, but utterly fuck everything about this administration, and fuck anyone who voted in favor of it.
KK7NIL: Nothing like a forced tax event to get the people rioting in the streets!
lotsofpulp: Tesla's highest market cap in 2010 was $3.3B. Tesla has more net income, sometimes multiples more, per year, from 2021 to 2025.For comparison, it is routine to see sale prices of 3x to 5x revenue for many, many kinds of everyday businesses that have much less potential than Tesla.There are very, very few businesses whose shares one could have purchased in 2010 that performed better over the subsequent 15 years. That is about as objective as one can get about determining whether or not something was under or over valued (in 2010).
croes: because not only the shareholders overpaid but the car buyers too.
ddp26: Got a source on this? I didn't take into account in this forecast that public markets could be very inefficient in this way.
conorcleary: oh baby, that's the just 'new' way they screw ya
