SpaceX IPO Valuation: Narrative‑Driven Framework and Musk Factor

Name: To Trillion(s) and Beyond: The SpaceX IPO Odyssey
Uploaded: 2026-04-23T21:18:29+00:00
Duration: 31 min 52 s
Channel: Aswath Damodaran
Description: Summary and key takeaways on To Trillion(s) and Beyond: The SpaceX IPO Odyssey — Summary, covering The SpaceX IPO Context The market anticipates a SpaceX IPO

Aswath Damodaran

Apr 23, 2026

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31 min video

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2 min read

YouTube video ID: WhY5EF1_LjQ

Source: YouTube video by Aswath Damodaran — Watch original video

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The market anticipates a SpaceX IPO in the second half of the year, with a prospectus filing expected next month. Analysts expect the offering to become the highest‑priced IPO ever. SpaceX began with the goal of slashing space‑transport costs and eventually reaching Mars. The company survived its early years thanks to a $1.6 billion NASA contract awarded in 2008 after the Falcon 1 launch. Elon Musk retains 42 % equity while controlling roughly 80 % of voting rights, giving him decisive influence over strategic direction.

Business Segments

SpaceX operates three distinct businesses.

Space Launch commands about 80 % of the launch market. Reusable rockets give the segment a cost advantage that translates into higher margins than expendable competitors.
Starlink provides satellite‑based internet. Revenue estimates place Starlink at $11 billion in 2025, targeting underserved regions and niche sectors such as aviation. The service leverages SpaceX’s launch capability to deploy low‑orbit satellites more cheaply than rivals.
xAI develops large language models, most notably Grok. The subsidiary focuses on consumer subscriptions and specialized business applications, including coding tools acquired through the Cursor purchase.

Valuation Framework

The speaker adopts a narrative‑to‑numbers methodology to value a company with sparse historical data. He breaks SpaceX into its three business lines, assigns growth and margin assumptions to each, and aggregates the results.

Base‑case intrinsic valuation lands at $1.2 trillion.
2025 revenue totals roughly $15.5 billion ($11 billion from Starlink, $4 billion from launch, the remainder from xAI).
2025 EBITDA reaches about $8 billion.
Projected 2036 revenue climbs to $320 billion with a consolidated operating margin near 48 %.
A Monte Carlo simulation spreads the valuation range from $660 billion to $2.8 trillion, reflecting the high uncertainty inherent in the model.

Pricing vs. Valuation

Pricing the IPO proves messy because direct peers do not exist. Traditional defense or telecom firms offer poor comparables, forcing analysts to rely on forward‑looking metrics 5–10 years out. Analyst bias often inflates story‑driven valuations. The intrinsic valuation sits roughly 10 % below current private‑market pricing and well under the expected IPO price range of $1.7 trillion to $2 trillion. Investors receive the “Musk package”—the blend of visionary leadership, control, and narrative—whether they like every aspect of it or not.

Mechanisms Behind the Numbers

Reusability fuels SpaceX’s launch cost advantage, allowing the segment to achieve margins higher than those of expendable launch providers. Starlink’s economics benefit from targeting markets where fiber or cable service is unavailable, while internal launch capabilities keep satellite deployment costs low. The narrative‑to‑numbers approach converts these qualitative advantages into quantitative assumptions, enabling a cohesive valuation despite limited financial history.

Takeaways

The upcoming SpaceX IPO could become the highest‑priced offering ever, with a prospectus expected next month.
SpaceX’s three‑business model—launch, Starlink, and xAI—provides distinct growth drivers that feed into a unified valuation.
A narrative‑to‑numbers framework yields a base‑case intrinsic value of $1.2 trillion, while Monte Carlo simulations expand the range to $660 billion–$2.8 trillion.
Pricing challenges arise from the lack of true peers, pushing analysts to rely on long‑term forward metrics and the “Musk package” of leadership and narrative.
Reusability, low‑cost satellite deployment, and AI subscriptions together create margin advantages that underpin the high‑growth projections.

Frequently Asked Questions

How does the narrative‑to‑numbers approach handle limited historical data?

It splits SpaceX into launch, Starlink, and xAI, assigns growth and margin assumptions to each line, and aggregates the results into a single valuation. This method bypasses the need for extensive past financial statements while still reflecting each segment’s economics.

Why does the speaker describe uncertainty as a feature in SpaceX valuation?

Uncertainty reflects the wide range of possible outcomes for a high‑growth, shape‑shifting company. By modeling valuation with Monte Carlo simulations, the analysis captures this variability as an integral part of the investment case rather than a flaw.

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Full Transcript YouTube

Hi, welcome back. In this session, I'd
like to talk about SpaceX.
As you might have heard or read,
SpaceX's IPO is scheduled to go at some
time in the second half of the year. The
prospectors is expected to be filed next
month. And I want to do a valuation with
the limited information we have right
now. Now, I mean, wonder why all the
excitement about another company going
public. There are three reasons why I
think the SpaceX IPO is going to attract
attention. The first is in a world where
every company claims to be a futuristic
company, SpaceX is the real thing,
right? If you're designing a futuristic
company, you design it with spaceships
and satellites and AI all rolled into
one, and SpaceX offers that chance.
The second, of course, is its founder,
Elon Musk, and the history we've had
with Tesla and a a company that's kind
of reinvented itself, come up with a new
narrative, hit a trillion dollar
valuation, and kept going. It's, you
know, and whatever he touches, whether
you like him or not, is exciting. The
third, and I think this is worth
remembering, is if this company goes
public at the pricing that we're talking
about, it might actually be the most
valuable IPO of all time, the highest
priced IPO. You know, Ramco might be the
only competitor, but it's a that was a
very different offering. Now, I know I
might be getting ahead of the game, as I
said, because the prospectus hasn't been
fought. The information is minimalist,
but I've always viewed it as a challenge
to try to value companies with
minimalist information. If nothing else,
I want to create a construct for valuing
SpaceX that I can come back to when the
prospectors gets fired. So, let's set
the table. You think about the companies
Musk has founded and built up, and you
think of Tesla, of course, and people
forget that SpaceX is actually an older
company than Tesla. was founded a few
months before Tesla and at the time of
its founding Elon Musk specified that he
was founding SpaceX to make the cost for
space transportation lower and for
travel to Mars. No, file that away. Now,
it was viewed as having very little
chance. If you thought Tesla was given
little chance of succeeding the electric
car market, SpaceX was given an even
smaller chance. People's response was,
"How the heck are you going to compete
with the NASA and um and the and the
space agencies, mostly government owned
at the time that have all the knowledge
of it. So very few people gave it a
chance and in the next 6 years SpaceX
built Falcon 1, its first spaceship and
it succeeded by launching Falcon 1 in in
September 2008. Now, in the early years,
SpaceX flirted with disaster on the edge
of bankruptcy, but it got a NASA
contract for 1.6 billion in September
2008 based on the launch of Falcon 1
that rescued it and essentially allowed
it to build Falcon 9, a reusable and
heavier vehicle. And the key is
reusable. I mean, in a sense that they
were able to launch whatever you wanted
to launch into space and come back. Now,
in the years since, SpaceX has built on
that advantage of being able to get
loads into space at a much lower cost
than the competition. In 2013, SpaceX
launched its first private customer
mission. And since then, the private
customer business has become bigger.
Now, there are of course people who
claim that SpaceX was um was built up
because of government funds, but
remember the the government wasn't doing
SpaceX a favor by picking SpaceX cuz
SpaceX was much cheaper than the
competition.
Now, along the way, SpaceX has developed
offshoots as as with every other Elon
Musk run company. The first was the
Boring Company. The Boring Company, of
course, bought tunnels for
transportation. Luckily that was spun
off in 2017 to become a separate entity.
In 2019 SpaceX realized an advantage in
being able to launch things into space.
You use that use that as a basis for
launching hundreds of satellites and
that's those satellites become the basis
for Starlink an internet service which
was satellite based reaching areas or
bit or or demand that could not be met
with conventional internet service.
conventional service coming from fiber
optic and cable. Now that endeavor has
picked up. There are now thousands of
satellites that SpaceX is out there.
More than 10 million active customers
the end of 2025 and an active business
that's building up for you know
airplanes and trains that need need AI
need internet service. In February 2026,
uh SpaceX also acquired XAI, which is
Musk's other creation for for um large
language models. And essentially XAI is
the parent for Grock. It's a competitor
in a space where you now have anthropic
and you've got Open AI, you got you got
Google. It's a it's a player in that
space. So basically SpaceX has three
businesses in it. the space launch
business, the in the satellite based
internet service business and the LLM
business. So, as SpaceX has kind of
branched out into different businesses
with looking back at its financial
history as well. Early on, as I said,
SpaceX was had a, you know, was came
very close to the edge. It took a long
time for revenues to show because the
Falcon 1 was still being developed. And
even as late as 2021 based just on the
space launch business it revenues were
just two billion. Starlink has been the
business that has kind of put it on
hypers speed in terms of revenues. And
in 2025 I think roughly 65% of SpaceX's
revenues came from from Starlink the
internet service business about 30% from
the space launch business. The rest from
X which is still getting off the ground.
As I said, we don't have full financial
statements even for a single year. And
the numbers I'm going to be using are
the rumored numbers that I think are
going to be pretty close to what you're
going to see in the prospectors. Rumored
numbers were that in 2025 SpaceX
generated about 15.5 billion in revenues
about um 11 11 billion of that from
Starling, 4 billion from Space Launch,
the rest from XAI. And according to
these these leaked reports and their
leaks, they had generated EIDA. I I've
read some some news reports that said
they made profits. That's not quite
true. They made Ebida of 8 billion. And
given the capital investments that
SpaceX has made, we don't exactly know
how much they had as operating profits
and net profits. That will come clearer
as this as a prospect is is made public.
Now, and along the way, SpaceX has
needed money. I mean the initial seed
round came from Musk's cashing out of
his PayPal stake. Now that PayPal stake
in was was the seed money for both
SpaceX and Tesla. Invested about 180 100
million out of the 180 million in
SpaceX. But in the years since it's gone
back to venture capital, it's it's
raised about 30 additional rounds of
venture capital in some about 12 billion
to build up its space launch
architecture. It has some bigname
venture capitalist in its in its
investing roster. The founders fund
Andre Horwitz and Seoia. It's also
especially in more recent years received
investments from public equity investors
like Fidarity and public tech companies
like Google. Now these venture capital
investments have diluted Musk's
ownership but he continues to own 42% of
the equity in SpaceX and because of the
unbalanced voting rights he will control
up to 80% of the total voting rights
that makes it different from Tesla where
there are no difference in voting rights
Musk will have absolute control of
SpaceX. Not that he doesn't have
absolute control of Tesla but he does
that with less than 50% voting rights.
So let's think about valuing SpaceX
before we get started. I know the
conventional wisdom in intrinsic
valuation, at least the way it's
practiced, you need lots of years of
history of financial data and a pure
group that you can mine to get data on
margins and investment etc. You don't
have either with SpaceX and many people
say well we can't value the company. I
fought back against that notion. I don't
believe it's true that you need a lot of
years of financial statements to value a
company. In fact, if that was a
requirement, you couldn't value
startups. You couldn't value young
companies. And it's nice to have a peer
group, but you don't need that either.
So this is going to be a test of whether
you can of you know this being the
SpaceX valuation of whether you can
value a company with limited historical
data no or very little minimal data and
not much in terms of peer group
comparisons. So let's give it a shot.
And I think that you know I've always
believed that to value companies you
need a story line a narrative that you
convert into inputs. That's what allows
me to get around the absence of
historical data. And with SpaceX, that
story line is going to be critical
because it's going to fill in the gap
created by the absence of historical
data.
Now, of course, with three different
businesses, there are three different
story lines. So, I'm going to break
SpaceX down into three businesses and
give you my story line. It's key is my
story line. You're welcome to disagree
with me. Let's start with the launch
business. I mean, it's where SpaceX was
born. It It's most identified business
even though it's only 30% of revenues. I
live in San Diego and I've seen the
launches um the the the the the
rocket launches from SpaceX and what
SpaceX brings to the game in the launch
business is because it kind of broke the
mold. It brought the you know he Musk
brought the what he'd learned in the
software business and the technology
business into the space launch business.
SpaceX has established a extraordinary
cost advantage over its competitors know
in excess of you know it it in by some
estimate costs about half as much as the
next best competitor to launch a
satellite using SpaceX. Key to that
space that cost advantage is the fact
that they reuse rocket technology. In
fact their margins the amount of profits
they make on reusable rocket launches is
much greater than when they have to
launch a new rocket. and their market
share was in excess of 80% of the
market. It's not a huge market but they
had an 80% market share. The competition
will come from some you know in in the
future from both some private business
that trying to to replicate what SpaceX
does. But in the government portion of
the space launch business, there will be
some government funded players who will
be chosen by those governments not so
much because they'll have they'll be
competitive in terms of cost but because
of nationalistic reasons. they will want
to preserve the right to be able to
launch their own sat satellites. So my
story line for the launch business it's
going to you know the total launch
business was estimated about about 30
billion in 2026
and I expected to grow to about 100
billion in 2036 as both governments and
private businesses you know the demand
increases from both I do believe that
it'll continue to dominate this business
and but with a less dominant market
share slightly less 70% rather than 80%
with the rest going to the government
launch businesses. I think I'm being a
little conservative in my estimates for
the launch business because I'm not
taking into account the other stuff that
SpaceX could potentially do, especially
space travel. Now, I've heard Jeff Bezos
talk about put data centers in space. I
don't know how far they are in the
future, but if that does happen, SpaceX
will start with an advantage because of
what it's already built up. So, that's
my launch business story. Let's move on
to the internet service business story.
The internet service business is huge.
But most of that internet service comes
from fiber optic and cable lines. Now
the satellitebased internet service does
operate at a disadvantage right now to
fiber optic and cable and places where
you have access to all three because
it's tough to get the quality of service
you get with fiber optic that you can
get from. So it's a niche of the
internet service business. Here's the
good news. The internet service business
is huge. It's 1, you know, between 1 and
$1.6 trillion. Cuz think of how much
money you spend on your internet service
and multiplied by the number of people
getting internet service. Now, I think
SpaceX in the satellites bait internet
service has a tremendous advantage cuz
not only does it have 10,000 satellites
in space, but if you look at a
competitor like Global Star, which
Amazon recently acquired, not only do
they have far fewer satellites and these
satellites are low orbit satellites, so
you can get better internet service, you
know, if Global Star wants to expand the
number of satellites in space, guess who
it has to go to to launch those
satellites in space? has to go to
SpaceX. You know, I do think that over
time the technology for satellites based
internet service will improve. Will it
become competitive with fiber optic and
cable and other more convers
total market? It's probably going to
over and and that you know it's right
now it's a small market. It's about 12
billion. Much of that going to to
Starling. So here's my story line for
the internet service business.
I think the overall internet service
business is a pretty mature business
because you know it's you can raise your
price at the inflation rate but much of
the world is is is is within reach. I do
think the satellite internet service
will continue to increase its market
share of the total internet service as
you know partly because of technology
improvements and partly because of
demand from airlines and other niche
markets which cannot get conventional
internet service or tough to reach
geographical areas. It will see more
competitors but I I find it difficult to
visualize a world where those
competitors will be able to catch up at
Starling. So I think Starlink will
continue to have a dominant market share
of the satellite internet service
business and over time I think that as
the service becomes easier to access and
more visible you know cost of customer
acquisition will decrease. You're not
going after, you know, customers with
fiber optics in cities. You're going
after parts of the market where people
are getting spotty service right now
from their fiber optic provider or the
cable provider and they're saying I can
do better. So in both the launch
business, the internet service business,
my story is the total market will
continue to grow and SpaceX will have a
dominant market share. Which brings me
to the LLM business and it's perhaps the
toughest of the three businesses to put
numbers on not just for XAI but for
anthropic and because we don't know how
this business will evolve. It's a lot of
potential, a lot of promise. People seem
to think it's going to be worth a lot.
But right now if you look at the
different LLMs it's clear that Grock is
running behind uh you know Claude and
Chat JPT and even Gemini in terms of
building up business subscriptions.
Grock's primary revenues now come from
subscriptions that it offers X users
where you can bundle it and it's as I
said 80 million 100 million in in
revenues in 2025. It is as I said the
the market's going to grow. We don't
know how big it'll be, what form it'll
take and it's entirely possible that
Grock may concede a big chunk of the of
the business space to claude and chat
GPT because that space is going to
require insane amounts of investing up
front. It's going to be incredibly
competitive and that Grock may focus
less more on consumer subscriptions and
perhaps niche business markets. recent
acquisition of cursor, an AI company
focused on coding, suggests that rock
hasn't completely given up. It might try
to get into this business perhaps in a
different way. And you can't
underestimate Musk's capacity to find
ways to do things that kind of undercut
competition even if the competition is
spending a lot more money. What's my LLM
story? that the LLM market will continue
to grow. But more of the growth, the
bigger market will be the business
application market rather than the
consumer application market. But my
story line XAI will target primarily
consumer revenues and niche business
application perhaps the coding business
based on the cursor acquisition and
leave the rest of the market to which is
going to be messy and expensive to the
competitors. So that'll give it a
smaller market than Anthropics market
and ch and open AI's market 80 billion
in 2036 but one with where it's
operating in space with less competition
and higher margins. This is as I said
the part of the story where things will
change as we learn more about what XAI's
plans are.
Now there's a fourth
component I want to examine. It's not
quite a business, but the fact that the
three businesses that SpaceX is in, in
every one of these business, there's a
potential for a much larger business.
The space launch business, I said, it
could be a springboard for space travel,
for leisure, for research, for business.
it for the satellite broadband
offerings. If there's truly a technology
breakthrough, you could you could go
after the much bigger internet service
market where it could compete with fiber
optic and cable even in the cities and
urban areas. And with XAI, as I said,
there are so many ways in which the
market can be get bigger, especially if
Grock finds a way to outflank its
competition and enter the business
market in a big way with so here's what
I'm going to do. I'm going to take these
four components and put my best
estimates for what the what the SpaceX
is going to look like in 2036
both in terms of revenues and margins.
So the launch business based on my
estimates I see a market of about 70
billion for the in in revenues and an
operating mar these are all going to be
high margin businesses because unit
economics are so good operating margin
of 40%. you know, at least in the launch
and the Starlink business, less
reinvestment in the near term because
they can live off what they've already
done. But over time, the reinvestment is
going to pick up with XAI. As I said,
I've targeted a smaller market, you
know, but with with good operating
margins and much more reinvestment needs
to stay in space. Those reinvestments
will take the form of acquisitions
perhaps like cursor. And with the
expansion option market, as I said, it's
just an add-on. An extra 50 billion in
revenues potentially coming from these
three the three basic businesses finding
new markets to expand into and a margin
of 30%. Now, we might I might have been
better off just treating this as an
option, but I'm going to incorporate
into my intrinsic valuation.
If you take those stories and numbers, I
am now in a position to put a number on
SpaceX. So this is the consolidated
effect of my assumptions and based on my
assumptions I see revenues growing
pretty dramatically from about 16
billion in the most recent year to
almost 333 billion 10 years from 3 320
billion 10 years from now
and over time I think the the margins
the I mean it's already I think a
money-m business it'll get more
profitable because scaling up will
improve the economics the business the
consolidated margin is going to be close
to 48%. This is a big story with a big
payoff. Along the way they will have to
reinvest fairly substantial amounts to
get their growth and that part might
shift depending upon how ambitious they
get on the Xai business. Their free cash
flows are actually fairly remark
remarkably good for a company growing
this fast. negative free cash flow in
the next year, but positive free cash
flow is kicking in and then going into
the stratosphere. Based on these
estimates, the value that I got for
SpaceX is 1.2 trillion. Notice that I'm
not adding cash subtracting our debt
because I don't have a balance sheet.
I'm assuming that net debt is close to
zero, but my guess is it's not going to
make enough of a difference to worry
about over the in the overall valuation.
And there are some share counts from the
private business. Take them with a grain
of salt. We'll have to wait for the
prospectors to get a better number. But
1.2 trillion enterprise value is a
remarkable number if you think about the
fact that they're 15.6 billion in
revenues right now. Even if their EBIT
does 8 billion now, but that's the
intrinsic valuation. Are there holes in
the story line? Absolutely. You know,
the value that I derive you know is of
1.2 into trillions was about 10% below
the private market pricing. It is still
a third below what people are expecting
the pricing to be you know which is 1.7
trillion 1.8 8 trillion maybe even two
two trillion now it has lots of moving
parts it's lots of uncertainty and
without full financials I don't even
have a good starting point now as we go
into the next month and the months
following the information will improve
but the uncertainty will remain now and
as you think about that uncertainty
remember it's a feature not a bug it's
it's part of the SpaceX valuation you
can't run away from it and I'm uncertain
about every single number in this
valuation. Every single one now, but I'm
less uncertain about some numbers than
others. For instance, I feel less
uncertain about my launch and internet
service business numbers than I am about
the LLM and the expansion businesses.
And if you're wondering why this
uncertainty and the cost of capital I
used to value the company is only about
8% roughly that of an average US
company, it's partly because the risk is
company specific and it'll be kind of
it'll it'll be buffered in a portfolio
and it cuts in both directions. There's
both upside and downside. In fact, you
could argue that if there's uncertainty,
there's more upside uncertainty than
downside uncertainty in every single one
of these businesses. rather than hide
from my uncertainty. I've always felt
that it's it's healthier to kind of deal
with it by bringing in the uncertainty,
telling the world how uncertain you are
and looking at what it does to value.
That's what I've done here in a Monte
Carlo simulation where I've taken each
of the businesses,
taken the revenues and margins and made
them into distributions because those
are the numbers that I'm most uncertain
about and I get a distribution of value
of enterprise value for SpaceX based on
how the uncertainty plays out. The
median number 1.28 is actually very
close to my base case valuation of 1.22.
But that shouldn't surprise you because
my expect my input numbers were based
upon around the expected value were set
at close the expected values the
distribution but look at the
distribution of value the value of
SpaceX could be you know anywhere from
660 billion to 2.8 8 trillion. But I
think that's just, you know, if I just
left it at that range that would be
coping out, you know, but you can see
the the the percentiles estimated here.
If as as is estimated, you know, the IPO
is going to go at 1.7 1.8 trillion,
you're you're at the upper end of the
spectrum. I mean, is it plausible that
SpaceX is worth 1? Perhaps, but then
your upside is going to be limited. So
the bottom line here is this is an
extraordinary story, an extraordinarily
valuable company, but the pricing
has to be right for you to invest in it.
Now, of course, all of this is for an
initial public offering. And it's
absolutely true that an initial public
offering, companies are priced, not
valued. And your push back might be, why
are you wasting your time valuing the
company when the bankers, the investors,
the observers are all going to price the
company? No. So I and I I'm okay with
that critique that pricing would be more
appropriate because that's what
everybody else would be doing. What I'm
not okay with is people who claim that
pricing the company don't want to do
valuation because you have too many
assumptions to make about revenues and
margins. You don't think you don't you
have to make those assumptions and you
price the company you still have to make
those assumptions. The difference is the
assumptions are implicit rather than
explicit. And I'd rather make my
assumptions explicit. And if you think
pricing is going to be easy with SpaceX,
think again to understand why pricing is
going to be so messy with SpaceX. Think
of the three steps involved in pricing.
You got to pick a metric, know price
earnings, EV debit, EV to sales, you
know, you have to pick a peer group and
you have to spin or tell a story. That's
what every pricing looks like. Let's
start with picking a multiple right now.
In fact, because I don't have full
financial statements, assuming even that
the that you know that the EBIT is the
EIT and that this the pricing that
you're getting in the private market is
pretty close to the enterprise value, I
can get a rough enterprise value to
sales or an enterprise value
EV to sales multiple for SpaceX. Now
using 2025 revenues I can use forward
revenues and you will notice that as I
go and I've used my estimates of
revenues in the future which are very
upbeat numbers and you can see the
further out I go the more reasonable the
EV to sales number is looking but
remember the EV is the EV today and the
revenues I'm using are the revenues 10
years out. So with the $1.25 25 trillion
pricing. If I look at 10year forward
revenues, EV to sales looks okay, but
that's kind of a illusion because I'm
taking today's EV and revenues 10 years
from now. Now, in terms of finding a
peer group, good luck with that. In
every one of the businesses, I can't
think of a single other company out
there that's, you know, clear competitor
except perhaps in the LLM business. On
the space launch business, you can look
at Boeing and Northrup Gman, but that's
a non-starter. These are very different
companies. Mature to declining
companies, lower margin, lower growth. I
mean, you can reach and say, let's look
at Palanteer. It's another defense
company, but it's a very different
business, right? It's a data software
company rather than the kind of company
SpaceX is. On the internet service
business, you can focus in on more
traditional telecom companies. Again,
very different economics will lead you
to know now I'll tell you up front that
if you compare the EV to sales with
SpaceX against more conventional
companies, it's a non-starter. And with
the LLMs, you can compare it to
anthropic and open AI.
And the problem is they're still private
companies. You can use VC pricing, but
that's going to be messy. So, in other
words, putting together a peer group of
companies for SpaceX is going to be
really difficult to do. In fact to show
you that even if you construct a peer
group the challenge you're going to face
is you pick the ninth decile of these
pure groups SpaceX is going to look
extremely richly priced unless you go to
forward pricing you know as you look at
the analyst reports that come out you're
going to see a lot of storytelling when
it comes to SpaceX about its great
growth its great margins all true right
and I'll make a prediction bullish
analysts are going to use a lot forward
pricing with really forward revenues 5
years out, 10 years out. They'll pick a
peer group then of technology or high
growth companies to argue that SpaceX is
priced right. Put simply, they'll have
already decided they're going to buy
SpaceX and they're going to find a
pricing argument to back it up. I know
bias is always part of the process. I
think the problem with pricing SpaceX is
the bias is going to lead you to
whatever pricing choices you make in
terms of metrics and pure growth. The
problem is these stories stories have a
kernel of truth. But unless you can
convert them from pure stories to
numbers tell me how much the higher
growth is going to translate into higher
multiples, it's just a story.
Now I as I look at SpaceX, you know, I I
know there are a lot of critiques you
can make of Elon Musk, but I think
SpaceX is his most impressive
contribution. It's an engineering marvel
that people said, you know, when when it
was started, they said it can't be done.
But as with all of SPA Musk's creation,
SpaceX will be a sha a shape-shifting
entity. It'll remember, you know, look
at Tesla just to see what a mus creation
can do. car company, an energy company,
an automated driving company. It's, you
know, it's it's going to shift. The
narrative will shift and Musk's power is
to carry along enough investors who buy
into that narrative. When I bought Tesla
in 2019,
it was my first time owning Tesla. I
described it as my corporate teenager in
the sense that, you know, if you're a
teenager, every day you wake up, you
look in the mirror, and you ask, you
know, I have lots of potential. What can
I do today to screw it all up? Now Tesla
as I said was a great storyline but the
story line would keep shifting and
SpaceX is going to be similar in many
ways. Right now it's in three business.
Who knows what SpaceX will look like 5
years from now. Makes it a difficult
company to buy but an even more
dangerous company to sell short as
anybody who is experienced selling short
on Tesla will tell you now. But it is
truly in a in a world where every
company gains unique and futuristic
SpaceX is the real thing. You know, at
at 1.75
trillion, I would be reluctant to buy
SpaceX because I think that's too much
of a reach. But at trillion, I', you
know, I'd be a buyer. I think this is a
company that is going to carve a niche
for itself. But if you do buy SpaceX for
whatever reason, remember, you get the
package. You get the Musk package, the
good stuff, the bad stuff, and it's not
fair complaining about the things about
Musk you don't like because they come
bundled in. The man is, you know, has
some things that make him a genius, but
he's incredibly gifted on some
dimensions, incredibly flawed and
others. You got to take the package.
So, but this is going to be fun to watch
and I will revisit this valuation in the
months to come as we get more
information and more filling in on what
the offering is going to look like. I
hope you found this session useful and I
thank you very much for listening.