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420

SpaceX Is Junk. That’s What the Bond Market Says (archive.ph)

submitted 3 weeks ago* (last edited 3 weeks ago) by technocrit@lemmy.dbzer0.com to c/technology@lemmy.world

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The bond market’s assessment also jibes with SpaceX’s stock. It’s a profitless, non-dividend-paying, one-person-controlled, empire-building project trading at more than 100 times sales, about 30 times the valuation of the S&P 500 Index. That’s the very definition of a junk stock.

Original link: https://www.bloomberg.com/opinion/articles/2026-07-02/spacex-is-junk-that-s-what-the-bond-market-says

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[–] uriel238@lemmy.blahaj.zone 57 points 3 weeks ago (7 children)

Once again, the IPO ($135/share or $2.1 Trillion) was based on the success of some long term goals like space-based data centers and a Mars colony of one million permanent residents.

This is from the same guy who promised a fleet of Tesla robotaxis by 2025.

Space experts have since pointed out that the vacuum of space does not sink heat.

Some of the assets thrown into the SpaceX valuation include xAI (which is falling behind OpenAI and Anthropic) and Starlink (which is suffering from congestion problems already and cannot be scaled up).

So this is not unexpected.

[–] Sylvartas@lemmy.dbzer0.com 24 points 3 weeks ago

Space experts have since pointed out that the vacuum of space does not sink heat.

I'm merely a casual Elite: Dangerous player and I could have told him that.

He's a genius btw

[–] Zos_Kia@jlai.lu 5 points 3 weeks ago

To clarify, the problem with starlink is that the investment is mostly done (they have the projected number of sats in orbit, give or take a couple thousands) so there is no rational reason for them to raise billions in cash.

In a rational world it would now have to prove itself on its own dime.

[–] anomnom@sh.itjust.works 4 points 3 weeks ago (1 children)

I still want to know how having anyone on mars was supposed to be profitable.

Unless a government is paying you to run a private prison there.

[–] uriel238@lemmy.blahaj.zone 7 points 3 weeks ago (2 children)

The point of manned missions and colonies now is proof of concept for the expansion of human civilization to other worlds, but yes, that's not a private for profit endeavor but a public interest one.

That said, the research and development done for the Apollo moon shots returned to the economy $14 for every one dollar spent, so it was absolutely a sound investment. Also, those patents were sold to the US government for a dollar each (at most), and so the technology gained like microcircuitry and memory foam, are public domain.

( RANT: The public domain, the creation of a robust one is -- according to the Constitution of the United States -- the very purpose of the whole temporary monopoly system that is the foundation of intellectual property law.)

[–] anomnom@sh.itjust.works 3 points 3 weeks ago (1 children)

I completely agree, and don’t think sending trillions of investment dollars to a private company is going to get us anything like the Apollo program did. Maybe we’ll be wrong and some great inventions will arise from the challenge.

Mining asteroids or the moon seem like the next thing, but the cynic in me thinks it will likely just increase wealth inequality.

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[–] Zwuzelmaus@feddit.org 46 points 3 weeks ago (8 children)

I feel like I'm way ahead of the market.

(If only I knew how to turn that wisdom into money)

[–] cideyav138@lemmy.ml 30 points 3 weeks ago (5 children)

I'm convinced that to win in today's market, you really can't think deeply about anything.

[–] horn_e4_beaver@discuss.tchncs.de 8 points 3 weeks ago

Hyperreality

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[–] Akasazh@lemmy.world 18 points 3 weeks ago (3 children)

Put options are a thing.

But best to stay out of stocks gambling unless you have money to lose.

[–] GalacticSushi@piefed.blahaj.zone 18 points 3 weeks ago

"The markets can remain irrational longer than you can remain solvent"

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[–] BreakerSwitch@lemmy.world 8 points 3 weeks ago

Alas, the market can remain irrational longer than you can remain solvent.

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[–] weew@lemmy.ca 28 points 3 weeks ago* (last edited 3 weeks ago) (1 children)

Prior to the IPO, I was absolutely interested in SpaceX stock. Regardless of Musk's antics, they are far and away the most advanced and most successful space launch company in the world.

Where traditional space launch companies like Boeing and ULA are floundering and failing, SpaceX was getting it done, to the point where NASA and the US Military had to move flights originally booked with ULA and hand them to SpaceX because they were the only ones able to get things done on schedule AND is more profitable than any other rocket company thanks to landing and reuse technology.

Then, of course Musk merged Twitter into xAI, merged xAI into SpaceX, then basically called SpaceX an AI company to attract more AI investment hype, and 99% of the stock value is AI hype.

And I have zero interest in SpaceX stock any more.

[–] NotMyOldRedditName@lemmy.world 12 points 3 weeks ago* (last edited 3 weeks ago) (2 children)

I'm in the same boat. For years I'd been excited to potentially own some SpaceX shares if they went public. No interest at all now due to xAI merger. I did gamble a bit of money on day 1 just because the odds of a pop were real, but i just got in and out and I was done.

[–] SaveTheTuaHawk@lemmy.ca 2 points 3 weeks ago (1 children)

, they are far and away the most advanced and most successful space launch company in the world.

For orbital launches, maybe, but they have all kinds of competition now. Would they even be in business if not for huge government contracts without milestones?

[–] NotMyOldRedditName@lemmy.world 4 points 3 weeks ago* (last edited 3 weeks ago)

They dont have any competition at the scale of what falcon 9 can do yet. Blue Origin is getting close, but they're not quite there yet.

People are transferring contracts to falcon 9 because it works and is available.

If Starship succeeds, they'll be leap frogging everything being built now thats meant to compete with Falcon 9.

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[–] NM_Gringo@lemmy.world 23 points 3 weeks ago (3 children)

It really wasn't that hard to see the SpaceX ipo was mostly a scam. And yet there are post after post of people losing their entire fortune, house, future after investing in this sow. Just blinding stupidity to invest in any company run by a ketamine addict who should be in prison over that DOGE bullshit.

[–] echodot@feddit.uk 11 points 3 weeks ago* (last edited 3 weeks ago)

Specifically Elon Musk is an irresponsible ketamine addict. Most CEOs just stick to a cocaine addiction which leaves them moderately competent.

[–] kinther@lemmy.world 10 points 3 weeks ago

I know a guy who bought in to it. I asked him recently how thats going for him. He is underwater and bag holding... the hype for many retail investors was real. Glad I didnt jump in.

[–] iconic_admin@lemmy.world 9 points 3 weeks ago (1 children)

It’s at $162 right now. Above where it IPO’d at. How are people losing their fortunes? I’m not defending spaceX or Elon (fuck that guy). But how are people losing a fortune exactly?

I know it’s a scam but honestly most of the market feels that way right now anyway.

[–] otp@sh.itjust.works 7 points 3 weeks ago (2 children)

Day 1: "Let's see how this goes."

Day 2: "It's up 20%? I can't miss out on this gravy train!"

After drop: "It'll go back up for sure."

I don't know how fast it was before it peaked, but not everybody bought right away. Or people added more money after they saw it going up.

[–] NotMyOldRedditName@lemmy.world 5 points 3 weeks ago* (last edited 3 weeks ago)

The IPO was 135, opened at 150 and closed on day 1 at 160.95 (but went up to about 175 briefly), closed day 2 at 192, then 201, and then it started coming back down.

So if you bought in on day 1 or on day 6 onwards, you're probably doing fine, but anyone on day 2-5 and they're hurting.

Everyone will probably be under by the time the insiders can start selling shares though.

Edit: Nasdaq 100 adds it tomorrow, so there might still be another pump until the insiders sell.

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[–] disorderly@lemmy.world 22 points 3 weeks ago (1 children)

Less paywall.

Another article discussing this without mincing words:

"Equity investors are one thing, but bond guys are the grown-ups in the room," Beauchamp told CNBC via email. "SpaceX might find it has its work cut out for it, but I suspect the market can absorb the issuance overall."

I'm taking that to mean that SpaceX might have a bit of a valuation change as investors decide what they'll pay to be a part of this grand adventure in creative accounting.

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[–] ShredderFeeder@shredderfood.net 21 points 3 weeks ago (1 children)

It's all pump and dump bullshit... You can't have a 2T value when the most the company has made in a year is 19B.

[–] SaveTheTuaHawk@lemmy.ca 4 points 3 weeks ago (1 children)

And over half of that was government contracts with no milestones.

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[–] HubertManne@piefed.social 19 points 3 weeks ago

Yeah its insane anyone would touch it with a ten foot pole given the rigged share system.

[–] MasterBlaster@lemmy.world 15 points 3 weeks ago (1 children)

The worst part is they managed to convince a few indexes to add it within weeks rather than the way things work for everyone else. That means all us IRA/401k holders will be forced to own this stock indirectly if we have funds/ETFs that track them, and suffer the losses directly.

S&P didn't take the bait and won't put it in until next year, but I think it's going on NASDAQ in a few weeks, as well as a few others.

[–] NotMyOldRedditName@lemmy.world 5 points 3 weeks ago* (last edited 3 weeks ago)

I think it's in the NASDAQ 100 now, but not every retirement fund will have that. Thank god the S&P500 held out. Also, the S&P didn't change their rules and being big isn't enough to get in, they also gotta be profitable for a period of time, so 1 year isn't a guarantee.

Edit: My bad, Nasdaq is July 6th, so tomorrow. So it'll probably pump a little temporarily until insiders can sell.

[–] SabinStargem@lemmy.today 14 points 3 weeks ago* (last edited 3 weeks ago) (1 children)

GrokAI is a poison pill that has been fed into a healthy rocket-satellite company. Sucks for the folks who value practical infrastructure that contributes to society.

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[–] wonderingwanderer@sopuli.xyz 13 points 3 weeks ago (4 children)

And yet they were given the IPO, so now it's the public's problem...

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[–] Valmond@lemmy.dbzer0.com 10 points 3 weeks ago (6 children)

I read somewhere that, if reusable rockets were all ok today, spacex needs some 450 launched just to get back to zero compared to Ariane 6 because of the massive costs.

So yeah "reusable" (I would like to know how reusable they actually are/how much they cost to reuse) is great and all but not yet economically viable it seems.

[–] waitmarks@lemmy.world 17 points 3 weeks ago (1 children)

It’s honestly not the rocket business that is the problem. Yeah, it’s risky, but it’s actually ambitious and starlink makes money. So, they have a money making product that could actually fund development of a real reusable rocket.

The actual problem is the AI money pit they slapped on to the side. The amount of money XAI spends is so insane it’s like 80% of the whole capex. Which most people dont realize because it’s still called spacex, but in reality the whole space business has become the side project for an AI company burning money at an unprecedented rate.

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[–] IamNefarious@lemmy.zip 6 points 3 weeks ago (1 children)

Falcon 9/Heavy has already shown that reusability is feasable. Their rocket business is not making money because of the development costs if Starship. But Starship is also incredibly ambitious compared to other rocketry programs

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[–] MajorasMaskForever@lemmy.world 4 points 3 weeks ago (3 children)

I work in the aerospace industry, mainly to satellites these days but I've worked in launch in the past and have plenty of friends who have as well.

That 450 figure is probably all of Falcon 9s development which has gone through several design iteration cycles. Industry rumors point to a new Falcon 9 booster being around $50 to build and a million or two to refurbish on average. The re-use is saving them a significant amount, but the upfront design cost was just so stupid high.

It's also worth noting that Starlink supposedly launches at near cost meaning little profit for each of those, but then SpaceX turns around and prices Falcon 9 close to Atlas V for government contracts (90-150m total price so probably 60m profit) and gouges people on Transporter (they're almost certainly pulling in 150-200m on each of those)

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[–] ChickenLadyLovesLife@lemmy.world 2 points 3 weeks ago* (last edited 3 weeks ago) (1 children)

But but ... you can hear people cheering maniacally every time one of their rockets comes back to land! It must be a legit company.

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[–] melsaskca@lemmy.ca 8 points 3 weeks ago

The stock market. Running the world's economy on hunches and gut feelings and insider manipulations. It's time for that shit to go. Does anyone even need ticker-tape anymore?

[–] HugeNerd@lemmy.ca 5 points 3 weeks ago

Nonsense, it's the stepping stone to our Space Elevator, Mars colonizing, asteroid mining, multi-planet galactic human empire! 4 reelz yo, we have AI supercomputers on a chip now, so obviously now that processing information is cracked, physics melts away!!!!

[–] Redvenom@retrolemmy.com 4 points 3 weeks ago (1 children)

Now that Elon became a cartoon villain He lost the good will of the people supporting His "Meh" ideas

[–] Lucius_Sweet@lemmy.world 3 points 3 weeks ago

None were even his ideas in the first place, he just bought the companies using daddies apartheid diamonds from his diamond mine and pretends that he is Tony Stark.

The only addition he has made to any of the companies he has bought has been to try and call them all some variation of 'X'.

[–] hark@lemmy.world 2 points 3 weeks ago

Nobody cares about the bond market, bonds are boring! We're all about the exciting stock market where fundamentals don't matter. Make sure to always buy the dip.

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