Remember the excitement over SpaceX going public? Well, since then, as of yesterday …
The price per share high was $225 or so, so it’s lost not 25%, as this six month chart shows, but 50% or so.
Not pleasant.
To me, a market cap is the result of investors future expectations of the stock, that being dividends and the likelihood that other investors, for good reason or bad, will bid the price up. Sure, there’s going short, calls, puts, and more outré forms of investing, but that’s the essence. Fundamentals, which are the analysis of the various numbers associated with running a business, technicals, which is the application of mass psychology to the investor class and often seems delusional, stand along side the story aspect of investing: associated with the estimate of the market size, it’s the rationalization of why this company will grow, and in turn grow the return on investment.
Will SpaceX ever grow into its market cap? At its high of $205/sh and an outstanding share count of 10,607,000,000, we’re talking a market cap of $2.17T at one point, which seems huge to me, especially for a company not yet showing a product. But what about its market and story? I’ll leave the market to others, especially since that’ll depend on Mr Musk’s objectives over the next few years, but note that SpaceX’s ownership structure is atypical and concentrates control in the hands of Mr. Elon Musk. Mr. Musk has been erratic over the last few years, demonstrating an inclination to bulldoze his way through obstacles, rather than finding proper and clever paths. While he deserves, and gets, credit for his products congruent with green thinking, his intellectual vulnerabilities apparent in his conspiracy theory mindset and the DOGE debacle make him a sketchy leader.
The SpaceX future becomes a problem in dueling stories: the supposedly immense riches of outer space vs Musk’s erratic behavior in combination with the immense technical challenges of his enterprise. I’ve owned shares of that solar power company that was bought by Tesla, and so I’ve owned Tesla shares as well. Yes, the romanticism attaching to SpaceX is alluring, but I shall have none of it. Elon Musk has been erratic and, in the end, will have disgraced himself with his DOGE antics. Too easily his companies might just collapse.
