SpaceX - Momentum Trap or the first $100 trillion company?
Many years ago we opened a 332-page bank prospectus that nobody wanted to read. The TSB float of June 2014 was unloved, unfashionable and - once you did the sums - really rather cheap. The shares popped up 11% on day one and the company was bought out at a 27% premium within nine months. I’d been an IPO skeptic for some time, but in this case, the crowd's lack of enthusiasm was quite a reliable contrarian guide to profits.
This week we've been reading a more popular dossier. SpaceX filed its S1 for its IPO on 20th May, and today it lists on Nasdaq under the ticker SPCX at a fixed $135 a share. That’s roughly a $1.75 trillion valuation, the largest IPO in history.
Where TSB was the IPO nobody wanted, SpaceX is the one everybody wants. The deal is apparently over two times subscribed, with demand double its $75 billion fresh capital raise.
Up to 30% of the offer is going to retail investors - which is multiples of the normal allocation and just shows the demand that the fame of Elon Musk brings. My own son came back from a post-university trip reporting that all his friends have an investment thesis to pile into the “SpaceX, Anthropic and OpenAI” IPOs "because they will all rocket." That, for what it's worth, is about as pure a sentiment signal as we’ll ever get.
So let me do with SpaceX what we did with TSB - open the prospectus, run the numbers, and let our ranking framework do the talking.
We might as well start with the punch. I'm afraid, it's predictable news. By our StockRanks methodology, SpaceX looks like a textbook Momentum Trap.
SpaceX is a genuinely great company
I want to be fair here. SpaceX is, plausibly, the finest engineering company of its generation. The published numbers on the operating business are really rather impressive.
Starlink - its Connectivity segment - booked over $11 billion in revenue in 2025, up 50% year on year, with operating income of nearly $4.5bn growing 120%. That's a seriously profitable, fast-growing business with more than 10 million subscribers and a 63% EBITDA margin.
Its Space (rockets/launch) business is a near-monopoly: more than 80% of all global mass to orbit since 2023, a more than 99% Falcon mission success rate, and roughly 9,600 satellites making up three quarters of manoeuvrable satellites in orbit. No other company is close.
We can’t deny the growth here. The problem is the price.
The numbers that don't fit the fairytale
Here are the revenue and profit headlines.
- Consolidated 2025 revenue was almost $19bn, but loss from operations was $2.6bn with an overall group net loss.
- In Q1 2026 alone the company lost about $4.3bn, and the accumulated losses sit at $41bn.
- Its third business segment (AI) - which includes xAI/Grok and X (Twitter) - folded in via a February 2026 merger, did $3.2bn of revenue in 2025 while suffering $6.3bn in operating losses.
Then there's the capital side.
- In 2025 SpaceX spent roughly $20.7bn of capex - $3.8bn on Space, $4.1bn on Connectivity, and $12.78bn on AI - against just $18.7bn of revenue. Free cashflow was deeply, structurally negative. This is a company that consumes more cash than it earns, by design, to fund an AI build-out.
And the valuation rests almost entirely on that AI build-out.
- The S1 claims a $28.5 trillion total addressable market - of which $26.5 trillion is AI. That's a number roughly the size of US GDP, attached to the segment losing the most money.
- Aswath Damodaran, world’s valuation guru, said the prospectus TAM pushes "into fantasy land for AI ($26 trillion) and the limits of plausible for space and connectivity". He values the equity at a punchy $1.3 trillion.
The Goldman model: 100x or bust
The single most revealing number I’ve read about this IPO is the underwriter’s own valuation model. The Financial Times reported that Goldman Sachs - a lead underwriter - shared potential forecasts with investors that have SpaceX's AI revenue growing roughly 100x, from about $3.2bn in 2025 to about $322bn by 2030. Total revenue is modelled to reach $474bn by 2030 (Starlink $144bn, Launch $8.3bn), with EBITDA of $352bn and free cash flow turning positive at $72bn in 2031.
So there it is - the $1.75 trillion valuation rests on an assumption that a unit which lost $6.4bn last year, and rents capacity to rival Anthropic because its own Grok hasn't gained traction, will out-grow the entire history of corporate America - while commercialising space-based data centres.
Of course SpaceX can and will grow - and of course let’s hope the Dyson swarm sci-fi fantasies come true. But the argument is that the price already assumes it grows faster than any company ever has, in the one segment where it’s struggling. And of course, Goldman earns fees proportional to whatever raises in the IPO. As Fred Schwed once said… “where are the customer’s yachts?"
5x share price growth in eighteen months
How did the valuation get here? Well it’s the inner workings of private markets… which work in giant unchecked leaps.
That's roughly a 4–5x in eighteen months, set entirely by twice-yearly tender offers with no open-market price discovery. The IPO doesn't test that valuation - it ratifies it and hands it to willing retail investors who are buying the dream. Don’t get me wrong, even I love the story. I listen to the Moonshots podcast every single week. I want data-centres in space. I’m a believer. But I’m also a skeptical value investor.
What the StockRanks say
This is where the StockRanks framework earns its keep. The StockRanks score every company 0–100 across three evidence-based characteristics - Quality, Value and Momentum - and we classify the ranking fingerprint with a StockRank Style.
We can’t compute the actuals until after the IPO, but here’s my estimate for SPCX from its prospectus.
| Rank | Estimate | Reason |
|---|---|---|
| Quality | ~30 | Strong growth, but losses, dilution, cashflow negatives |
| Value | ~2 | Super expensive on all measures |
| Momentum | ~96 | Extremely high based on private market valuations |
| StockRank (QVM) | ~35 | Well below average |
Quality Rank ≈ 30.
- The quality of franchise factors are weak: negative long-term average ROCE due to losses, deeply negative long-term free-cash-flow-to-assets ($20.7bn capex against $18.7bn revenue), and unstable, negative operating margins. The one bright spot is sales-growth consistency, which is near the 95th percentile.
- The fundamental trend (using the Piotroski F-Score) lands around 3/9 - i.e. weakening fundamentals year on year. It passes on positive operating cash flow, operating cashflow exceeding net income, and improving gross margin, but fails on negative net income, declining return on assets, rising leverage, heavy dilution and falling asset turnover.
- In terms of risk measures - The M-Score earnings-manipulation-risk threshold is probably flagged due to a huge Sales Growth Index and big accruals, which might trigger a safety decrement in our algorithm. The Z-Score likely doesn’t trip the financial distress decrement, ironically because a core factor is the market value of equity over book liabilities - which is astronomical at a $1.75tn cap. It can raise equity very cheaply after all.
Value Rank ≈ 2.
- Price-to-sales is roughly 94x (about 87x on forecast 2026 revenue). Nvidia is on (only) 19x!
- P/E and P/FCF are meaningless, as both earnings and cashflow are negative. No dividend and a negative earnings yield, while price-to-book is somewhere around 25–35x.
- Six classic value ratios and six red lights. Ouch.
Momentum Rank ≈ 96.
- For price momentum - we have to use the private tender valuation points as a price proxy. The "shares" are up around 220% over twelve months and around 60% over six, sitting at an all-time high essentially by construction. These are strongly positive trend signals.
- The earnings-momentum factors - estimate upgrades, surprises, broker-recommendation changes - are mostly null, since there's no analyst history yet, so we’d fall back to the price momentum for the full ranking.
Composite QVM ≈ 35 - below the median of the market, for the most hyped IPO in history.
And in terms of Style Classification: Low Quality + low Value + high Momentum is, precisely, the Momentum Trap - this is the classic profile of "popular story stocks" whose strong price action isn't matched by improving fundamentals. In Stockopedia's research this is what we call a “losing” style. High risk, and while historically Momentum Traps have been the better performing of all the “trap” classifications they are not a safe bet. One footnote worth making: in practice we wouldn't even publish a rank for SPCX at first - recent IPOs are excluded from the screenable universe until there's adequate data. That exclusion is the system working as intended.
Hyped tech IPOs usually give you a better entry
History is not kind to the buyer of hyped tech IPOs like SpaceX.
Jay Ritter's University of Florida IPO data contains a near-perfect parallel for SpaceX: of the 14 IPOs with sales above $100m that came to market at a price-to-sales ratio above 40, 12 of the 14 subsequently underperformed the market over their first three years if bought at the first close.
SpaceX is arriving at roughly 94x sales. And recent IPOs only reinforce the negatives. From the offer price, there have been twelve-month declines of roughly 65% (Lyft), 55% (Coinbase) and 67% (Rivian) - and Robinhood a 78% wipeout. According to Ritter, 1042 VC backed IPOs since 1999 have incinerated wealth - with a -27% average 3 year return.
The cautionary tale that rhymes the best may be Facebook. In May 2012 it IPOd at $38, fell more than 50% to a low near $17 by September 2012, and didn't get back to the float price till August 2013. But it then went on to be a generational compounder.
That's the whole lesson: even when the business succeeds wildly, the entry price and timing matter enormously.
| Company | IPO | First-year drawdown vs offer |
|---|---|---|
| Meta Platforms (NSQ:META) - was Facebook (2012) | $38 | −54% (to $17) |
| LYFT (NSQ:LYFT) (2019) | $72 | −65% in 12 months |
| Uber Technologies (NYQ:UBER) (2019) | $45 | −68% from offer |
| Rivian Automotive (NSQ:RIVN) (2021) | $78 | −67% in 12 months |
| Coinbase Global (NSQ:COIN) (2021) | $250 | −55% in 12 months |
| Robinhood Markets (NSQ:HOOD) (2021) | $38 | −78% in ~12 months |
But there may be a melt-up…
Nonetheless Momentum Traps can be very profitable for a while, and betting against one is how careers end. As we’ve seen from the intro, the structural demand here is unusual and global - there may be tens of millions of keen investors given Musk's fame and reach.
With 30% retail investor allocation, around two-times oversubscribed, and fast-track index inclusion from Nasdaq, FTSE Russell and MSCI, there is a wall of largely price-insensitive buying coming. And last time I looked 95 cents on every $1 saved in America goes into index funds.
Bloomberg reports that "about 30% of SpaceX's free float is now set to be owned by passive investors after just 15 days of trading". BNP Paribas estimates Nasdaq 100 inclusion alone could drive around $8bn of passive buying in the first month. S&P did, to its credit, refuse to bend its profitability rules for fast-track S&P 500 entry. But there's a broader picture that increasingly looks like 1999 on steroids, with a pipeline of giant $1tn+ IPOs and retail investors game. This stock could very well melt-up, especially if the free float is tight, before there’s a reckoning.
The bulls are out there too. Ronald Baron, who has turned roughly $2bn invested across 27 rounds into a stake valued near $15bn, says SpaceX will be worth "$10 trillion, $20 trillion, $30 trillion" and "the largest, most profitable company on the planet," and has placed a $1bn order at IPO. Musk said "Ron is smart."
Priced for the Dyson swarm
So there’s a symmetry here. Twelve years ago the framework told me a hated bank float was cheap, and it was right. Today the same framework tells me the most loved IPO ever is expensive - a genuinely great engineering company priced for a future that requires roughly 100x growth in its most speculative, loss-making (thrilling sci-fi) segment.
SpaceX may be a great company - and I’m a bull on the impact of AI on society and data centres in space. But the StockRanks aren't a measure of how good a company is - they're a measure of the odds you're being offered right now. And at $1.75 trillion, with a Quality of ~30, a Value of ~2 and a Momentum of ~96, the odds say avoid for now. History says hyped tech IPOs usually hand you a better long-term entry within 12-18 months. Especially as insiders will start selling as soon as the lockup expires - which is on Q2 earnings.
Nonetheless - there’s no doubt breakout momentum traders are going to have fun with SpaceX. Strap in, set your stops tight. Good luck with the ride.
Disclaimer
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80 comments
The US is a capital flow singularity and the SpaceX phenomenal IPO is the current apex of that effect. It may become a great business rather than an exciting venture. But there's a decent chance the peak is in on the price and that we don't see a new peak in our lifetime (most of us anyway).
Its debated in physics whether actual cosmic singularities can end (out of my league obvs to debate this). But the earthly capital market one in US markets will unwind...'Hawking Radiation' or the leaking of mass. This had already happened imo. Disruption of Iran war has muddied that and created volatility and uncertainty.
In markets capital cycles are inevitable. The US is exceptional but that is always a marginal and fragile property rather than an absolute and permanent one. Success becomes momentum becomes exuberance and then it eats itself.
SpaceX share price is not pricing its future today. Its price driven by vibe and manipulation. If you believe otherwise then you believe a fairytale can be reality
Space X is outdated tech. See Spielberg's Disclosure Day for guidance. Plus I.7Bn hits on the release of classified UFO/UAP files by the White House gives some of the reality hidden from public view.
SpaceX valuation: There are many ways of looking at it, in the interests of balance one would be:
> US Tech stocks showed many years of building a customer base before swapping to concentrate on making decent profits. Amazon which it just overtook in m/v is a good example.
> Space as an investment field is in its infancy. So is AI
> Re moonshots there have been articles about mining rare earths/metals/ Helium-3 ($20M per KG) etc on the moon way back before SpaceX was a publicly mentioned name
> SpaceX already has a Satellite to Broadband Worldwide business. Similar but for Worldwide mobile phones looks technically doable in next few years
> At its original 2T odd valuation it was "only a bit" more than double the Anthropic proposed valuation - OK at 2.6T its a fair bit more than double but hey you got a Space and communication business for your extra bucks. (but a AI business that is arguably much inferior - my unscientific source of reference is https://www.youtube.com/watch?... - I can take a serious point from this: if AI is currently behaving like 7 year olds then its future potential as it matures is guaranteed to be impressive )
> https://grokipedia.com/ Might be worth something
There might even be less bad (is that a phrase?) SciFi in the above than the https://www.citriniresearch.co... article that crashed software stocks !
While it is impossible to know how Space will turn out, it seems Mr Musk is 100% serious on the AI side of the business and that is arguably an easier path to 100T !
So on traditional measures yes impossible to value. What the future holds is of course uncertain.
What does look certain is a bumpy ride much like a trip on one of his rockets.
We are in a world where the richest youtuber is supposedly worth $500 million, maybe $1T is not what it used to be.
For those who are interested here's my QM Core Blueprint - USA portfolio publicly available on Snowball Analytics ... Up 12.7 % YTD
All driven by a screen and a process ... it's currently automated (which I really hope to share with you soon) ... and best of all, it's totally FREE but don't ask my anything about the companies because I know zip about them and as much as others might insist you should know about them, their products, the competition, the board members, etc. ... you don't. It's all just noise!
Best of luck
Phil
'don't ask my anything about the companies because I know zip about them and as much as others might insist you should know about them, their products, the competition, the board members, etc. ... you don't'
This is where I part company with you, Phil. The forecast is for $7 trillion to be spent on data centres in the next 5 years. Of course this might all end in tears, but the Mag 7 companies have real money based on real profits to spend. I have been loading up with more shares on my most successful companies for this reason because they will be the beneficaries of this massive spending.
To take Micron Technology (NSQ:MU) , I have bought in four tranches which are up by 541%, 181%, 5% and 1.7%. The year to date has been the most volatile I can remember, with markets reacting wildly to Trump's tweets, but American companies continue to produce huge profits. Maybe I will be proved wrong tomorrow, but I think the shares have quite a lot further to go and I have no intention of selling for the time being even though they have more than once declined by 10% in a day.
But John, I dont need to know anything about data centres, the big 7, the future of AI, etc. to be drawn into these companies.
My screen pulls me towards these sectors/industries and typically gets me out as things start to slow down. Comments from viewers express surprise about my entry points and it seems they typically sell out of trends before me. I don't have to have an opinion on what the future will look like. I just sell them when they stop performing according to my rules.
In the past it has been salmon farmers, gold miners, AI data infrastructure providers, renewable energy construction companies and at the moment it's Semiconductors. Eventually it might be space exploration.
Who knows what it'll be next week, I don't need to try to predict it or have an opinion or listen to someone else guessing. That is what I am trying to promote to:
1) people who are new to investing (who get drawn into the Follower path - See Ed's excellent article Gambler, Follower, Researcher, Craftsmen)
2) individuals who might be classed as Followers (I certainly went through that stage) but are disillusioned.
This site is fundamentally geared towards Factor Based investing but for some bizarre reason the boards are heavily skewed towards opinon. To implement an opinion based approach, even if you might argue that one leans into a more Researcher position, it must take an age to collate all the perspectives on the industry, products, business model, competitors, key staff, etc. I just think people must convince themselves that they are doing that ... across all the various sectors, industries, technologies. Really? For me I came to the realisation that I wasn't, couldn't and frankly didn't want to and it was a huge relief to find a lightweight way to invest that required very little knowledge. Lots of people here wont like that as it could be that their value, their investing ego is wedded to the idea of "being knowledable", of having insight. It sells tickets to events, it creates subscription service value, it sells newspapers and investing magazines, etc. Personally I don't think you need it.
In fact it requires so little knowledge that I have automated the screening, buying and selling process and as a result I'm currently managing about 24 portfolios using that automated approach spread across three strategies covering UK, Europe, USA, Canada, Asia, Australasia & India with over 300 stocks. Zero opinion.
I'm particularly fond of the Asian candidates as they have numbers for tickers which makes it even easier to stay detached.
You can follow the portfolios as I maintain them over on Snowball Analytics. The QM Core portfolios started at the end of April and my Bad Regime approach kept me out of many of the markets until their underlying indexes escaped a downtrend. They are starting to fill up now as more candidates are selected. The VM Core ones (not published yet) have been slower to populate but I'll publish them when I launch that strategy.
Best of luck
Phil
All of this is undoubtedly true Phil and I hugely admire your approach... I slightly worry that in flat or bear markets you will be sitting in cash, whereas an elite stock picker ( not me :) ), can still generate profit thanks to their analysis?
But Cancun, I'm not interested in elite stock pickers, I'm interested in making myself (and anyone else who is interested) an autonomous investor.
Here's a thought, if you can identify elite stock pickers here run a public facing elite stock pickers portfolio and let's see how it goes.
Buying on the date they recommend/tip and then selling when they say they're out but I bet you'll rarely see the latter.
I take your point Phil and I guess that everyone can choose whether research / analysis is for them or not ... I'm mirroring 1 such person atm and the portfolio is up 76% since inception 19 mths ago... but if you're trend following memory stocks that performance would be poor... the key for me is what return is generated in flat / bear markets as that's where things get tricky...
' if you're trend following memory stocks that performance would be poor'
I don't have my entire portfolio in memory stocks, I try to maintain a reasonable amount of diversification. In fact, the majority of stocks thrown up by Phil's screen for the last 6 months or so have been US tech stocks so he and I are very much on the same page. We just differ in the fact that I have been paying atttention to the broader financial situation and have been doubling down on my biggest winners. Of course I am monitoring my portfolio pretty closely and will sell when I think that the current bull market has run its course. To be honest a little less volatility would be welcome - two weeks ago I was down 7% in a single day as Trump decided there wasn't a peace treaty after all.
I agree
I think I'm typical stocko subscriber and could never justify an investment in Spacex. I have however taken a stake on the thinking that, whilst not a gambler or backer of horses, I have had the occasional flutter on the Grand National. Spacex is my stock market equivalent of the National. It's seen as bet, not an investment, but puts an edge on my interest and means there's no fomo. I don't expect this to influence my normal investing approach in any way.
If it succeeds, great. It's already "written off" out of my investment planning though.
Hey ho, horses for courses. (sorry).
I understand John. A small amount of speculation may yield a quick gain, but it definitely needs to be seen as a trade and not a long-term investment. Not to confuse the two, or I guess you can let it sit because it's only a small amount.
An investment in SpaceX is clearly speculative, and if people want to play the market like that there will always be that element. Afterall, we all have different reasons for getting into the market. However, presumably the reason we took out a Stockopedia subscription was to avoid companies like this, i.e. we are traditional investors looking for growth over many years in companies that generate PROFITS.
Elon Musk talks of his vision to send people to Mars and put a colony there. That's funny. His vision is pure fantasy. I'd like anyone to explain the logistics around this. I have never seen any attempt to explain how this is even remotely possible. Apparently with current technology it would take 6 - 9 months to get there. I guess this is a "minor" consideration for Elon and I'm just being negative.
However, let's play along with his fantasy. How much money do we think would be gobbled up in his pursuit? What return is there for investors in SpaceX? Does his company become one of those that continues sucking up investor funds to fulfil his own dream? We've all seen these types of companies and they're out there today. As value conscious investors we don't want to know about them and get caught up in that hype.
But during bull markets , momentum outperforms value sadly ( as I personally find it harder to pick those winners )... unfortunately I don't own Spacex , but with it 54 % up from its IPO price, I would humbly suggest that all information is useful, even if some of us consider it a reverse indicator...
The stock market value of SpaceX has just overtaken that of Amazon.
David
100% agree David ... I'm a big believer in the transformational power of AI, but sadly I couldn't bring myself to stretch to SpaceX's valuations... live and learn :(
It must be great to live in the US and not get distracted by teapots ( to borrow one esteemed subscriber's phrase )... even with the huge jump in 2026 eps , there will be many who feel that current US prices are too high ... if / when we get a pullback, it would be great for this platform to be slightly more US focused ... if its currently 95% / 5 %, then even 80% / 20 % would be beneficial IMHO...
Yes, Amazon's share price is based on its $77.7billion profits for last year. SpaceX share price is based on what SpaceX might achieve in the future.
Perhaps Stockopedia haven’t realised it (yet) that they have to do more coverage on the US stock market.
This article is a breath of fresh air and I hope that we will see more US content.
Should be 50%-50%
At the end of the day we make money investing in the US market and we bring most of it here in the UK and spend it!
As to the overvalued Space Exploration Technologies (NSQ:SPCX) commentary; it’s a repeat of the Meta Platforms (NSQ:META) and of courseTesla (NSQ:TSLA) IPOs.
No one here knows the forward earnings of Space Exploration Technologies (NSQ:SPCX). So how can they value it and say it is overvalued? Looking at past earnings to make an investment case is simply bonkers!
US bankers and Elon do know the future earnings and plans of Space Exploration Technologies (NSQ:SPCX).
All the best
I couldn't agree more, especially when the FTSE keeps bumbling along with no real signs of real traction even at these values! Take advantage now, before the Gov place restrictions and/or additional taxes on trading outside of the UK. It still amazes me how I can buy US stock within my ISA and it gets treated exactly the same as UK stock.
Well technically the US stocks is treated better Viz :), as you don't have to pay the 0.5% stamp duty ... Grrrr
I have made pretty good profits on a number of American shares using Phil Hoffer's Stockopedia screen. I currently hold Comfort Systems Usa (NYQ:FIX) , Credo Technology Holding (NSQ:CRDO) and Western Digital (NSQ:WDC) , I have also made good profits on several shares that I no longer hold. The screen has also thrown up Micron Technology (NSQ:MU) and Marvell Technology (NSQ:MRVL) , although I had already bought both of those. Stockopedia is far from useless for American shares.
I have asked specifically for more articles as I have found this one very well written with so much detailed but correct information.
We can get screens anywhere these days and far more advanced and much cheaper.
But articles (with no bias) from people that have actually been in the game are rare!
All the best
And all based on a screen with no analysis either. Glad to hear it's working out for you John.
I'm currently say on +89% for Comfort Systems Usa (NYQ:FIX), +297% for TTM Technologies (NSQ:TTMI), +194% for Micron Technology (NSQ:MU)
So agreed, who needs commentary or opinion (which is never unbiased)?
It is wild how much time and creativity some people will spend just to be disruptive or get a reaction.
I'm just replying to a comment about my screen and my approach Yiannos1
I would have thought that you would be supportive of an approach that encourages subscribers to consider the US and other markets.
I do apologise.
There are multiple and very similar types of screens but the best I have seen it’s the quant one in Seeking Alpha.
What Ed has done in this article is to provide an informative non bias analysis, including past IPO’s like Meta Platforms (NSQ:META).
Meta Platforms (NSQ:META) IPO was something similar to today’s Space Exploration Technologies (NSQ:SPCX) narrative. 100x sales etc, and we know what happened with it. Back then we did not know as well the future earnings of Meta Platforms (NSQ:META).
Every morning I have to read Graham’s views about the US market and those are biased. How can someone be insisting all the time and betting against the best market in the world? Indices graphs for the last 25 years are available to everyone! Also there are several posts there about the Ishares Msci South Korea Etf (PCQ:EWY) but only when it falls. I find it also bias not mentioning that three South Korean companies are projected to report profits in the next 3 years close to the size of the UK’s GDP. We all know why South Korea is mentioned all the time; semiconductors!
So after reading this article and how informative it was with no bias, I am under the impression that we will all benefit from more similar approaches.
Again I do apologise as I didn’t understand your original comment.
All the best
Same here, I am also doing well using Phil’s screen and nearly all US stocks. I reckon my portfolio is at about 80% US with very few (if any) UK stocks passing the screening. Just feels like it is a far more interesting market than ours and has been for a long time…
Fantastic feedback Matt, glad to hear it
Seeking Alpha is very good imo. Will keep Stocko for the UK (which with energy and minerals will always be in the doldrums - but better than Europe when we get a proper government).
Ok haters - where's the Titanium coming from. The rare earths. The copper. The oil (Russia already scoping out the cables/pipes from Norway) and when Chelmsford's lights go out with Tritax Big Box REIT (LON:BBOX) Data Centre power demands.
Can argue no political comments here, unfortunately that is naive.
Perhaps Stockopedia haven’t realised it (yet) that they have to do more coverage on the US stock market. = yes definitely
While for many of us the Uk is our home market, filled with companies we may know historically and a smaller number if firms that are easier to keep track of - so from that point of view I understand the UK focus, however....
On the other hand we are seeing conclusive proof that the US is where the money is and the UK seems to be relegated to a small backwater along with Japan and the EU followed by Emerging Markets! Its not even SpaceX ..... witness the DRAM ETF launch that (according to Yahoo finance): launched on April 2, 2026, with an initial asset base (AUM) of just $250,000. Despite its small starting size, it quickly became the fastest-growing ETF in history, surging to over $1 billion in assets within its first 10 days of trading.
Either its the next continuing leg of a longer term market or its a "blow-off phase". I cannot help but think of Soros's reflexivity theory - which was not just that markets move in boom and bust but the large boom's affect a lot of fundamentals all over the place and over extended durations of time. Therefore to have one eye on the US seems rather important ?
Apparently half the SP500 is involved in some way in the AI / Data Centre boom even if only making parts, supplying energy or fitting out.
+ Soros did not avoid boom cycles, he recognised them, rode the wave and was ready to bail out and short when it turned ! These things can often go on longer than we imagine.
All great valid points.
UK financial reporting is easier to read and analyse as well so it’s not all bad regarding the UK market. Liquidity and decent growth companies is the big issue.
I have actually mentioned DRAM in the morning on my X account referencing its unusual options activity-:)
All the best
Soon to overtake Microsoft...
I'm on the IPO 'rule' takes two years to settle down (may shorter now so 18 months) before the volatility clears (locked in holders etc, traders etc) and there are some actual figures to put there and becomes a longan. I was burnt post covid when everyone and their dog floating their story - the IPO industry killed the IPO industry and many now very nervous going back in, inc. me - greedy persons. But now is different yes?
It will drop imo and then a buy op, but not at some high a couple of days after the float. But also the repost is if wait for Stocko to give the 'green' light we may be well late to the party.
End of the day - have fun and don't invest more than 5%/10%/1% and can afford for it to go to zero - I'm a HODL so zero is not on my radar.
Mars is a minor distraction. Maybe to force some tech in that direction and make the moon look like small beer - marketing. Low Orbit satellites, mobile connectivity across the planet where no towers/cables, defence, robots (real), cars (real), AI (real) - there is a lot going on in Mr Musk's mind and his companies. Now he has the dosh to buy out the best bets.
Our task is to find them before he buys them out. As he did today, some AI co which does what I have no clue.
Filtronic (LON:FTC) (I don't know the 'moat'). Ast Spacemobile (NSQ:ASTS) - first mover in 'his' space and has revenue (next flight shortly of interest). Planet Labs PBC (NYQ:PL) (can't remember what they do) and Rocket Lab (NSQ:RKLB, but maybe need to look below to those unfortunately for us are not listed so not available. The specialist ETF's have that intel.
The web gives enough info - just read Reuters RNS daily and understand the underlying story - but in our crazy world we scim through all the info and then move onto the next.
Post note: in my defence still trying to keep down the day job and devote to the missus.
Agree with this. Apart from Planet Labs PBC (NYQ:PL) I hold all. And essentially all you had to do was read the script for when Space Exploration Technologies (NSQ:SPCX) floated tells you the TAM. Even if you’re no2 to Elon then you’re still getting a decent share of the market. I do think that Ast Spacemobile (NSQ:ASTS) is really interesting. They offer satellite to mobile plug and play options to mobile providers (Elon wants to eat into this and draw customers away), whereas they just say use our satellite alongside your network and we can fill all dead spots.
They also have with this a dual spectrum advantage where they do not have to pay for additional spectrum constraints. All of this wrapped together gives operators something that works immediately without any additional hardware and hugely better download speeds than Starlink with minimal dead zone. Full 5g capacity. Minimal cost.
Problems? They need to get their huge satellites into space. They lost one a few weeks ago on a Bezos flight (although fully insured it wasn’t a great look). Then they blew up their pad and flights are suspended.
They did launch 3 successfully today, who delivered them? You guessed it Elon.
This is the fly in the ointment- getting the satellites up there and using your direct competitor to do so. On the other hand surely Musk now needs to demonstrate to the market that his Rocket part of the company can actually make money.
Interesting times but certainly if they can execute they will be global leaders at least for a few years to see how Elon manages to a similar operation underway (sat-mob with no additional hardware).
Up another 20% yesterday...
The force is strong in this one.
To infinity & beyond.
"My own son came back from a post-university trip reporting that all his
friends have an investment thesis to pile into the “SpaceX, Anthropic
and OpenAI” IPOs "because they will all rocket." That, for what it's
worth, is about as pure a sentiment signal as we’ll ever get."
Seems like the old man could teach these young pups a thing or two. ;)
I joined Logica, an IT consultancy around 1998/9. It had a PE in the 60s. I didn't buy any shares. Gary, a manager, who had been there some time, cashed in his employee share options and bought himself a TVR (sports car). Helen - "the sensible one" - kept her options because that's what sensible long-term investors do.
The young lads in the office were all excited about tech at the time, and no doubt some of them bought shares in various TMT companies. Being the wise old owl I was at 32 years of age, and having read Intelligent Investor, I demured.
Roll on a couple of years and all that lovely Y2K consultancy money dried up. Logica was eventually merged with some other company. The CEO, Martin Reid, was the highest paid director in the Footsie at the time. In retrospect, it was a case of being in the right place at the right time rather than any strategic brilliance.
The moral is that even if you have a front-row seat of the workings of the industry like my work colleagues did, it doesn't mean you have superior investment insight.
I did have an interview with Tadpole Technologies once. Remember them? They recognised that the management "needed broader management insight than the prior directors." Quite. I was interviewing for a grunt position, though. What stuck in my mind is that I went from Aberdeen to Edinburgh by train to meet them. Oh boy, was that a treat! A factory caught fire near the railway track, so I had to be bussed to my destination. I arrived at the interview many many hours late. I swear to God, every train journey I take is a disaster.
Several years later, I was working in the oil and gas industry. BP had its Deepwater disaster. I was on the sidelines, and I heard one of the consultants in the office say that she had recently sold her shares. Being the awkward contrarian curmudgeon I was, I decided that the time to buy was now or never. So I did. It turned out OK, but not spectacularly.
And there we have it.
Brilliant Ed. As a Stocko disciple I will be an interested bye-stander on this one.
You are buying hype, no profitable company, no dividends, expensive valuation, not for me.
Of course Ed is right on the visible numbers. But the point Lex makes is that foreseeing the future is hard. Twenty years ago Musk getting to this point would have been dismissed out of hand….
Musk is a genius marketer and builder. Tough to bet against him.
Genius moves to merge in xAI and start the Terafab complex - positioning the SpaceX story to be coupled with the Dyson Swarm dream. Ultimately the sky high valuation creates cheap financing for SpaceX -> everyone investing is retail or forced buying right now (i.e. direct retail and index fund retail) - it's like Brewdog crowd-fundings but on interstellar steroids.
He will pivot Tesla to being a robot company (ridiculously massive TAM) and then merge it with SpaceX too.
So you'll have - Robots on earth and Data centres in Space.
If he's right, and SpaceX is the monopoly tollgate to cheap and environmentally friendlier compute - the valuation will continue north.
This IPO will have an impact on the ETF market....
https://tinyurl.com/st9tzr5d
For investors already holding the relevant index funds, no action will be required to hold SpaceX. Still, many may want to up their allocation to the company by getting into space thematics. ProcureAM’s pure play space fund, UFO, is a passive product that tracks the VettaFi Space Index, which is expected to include SpaceX as soon as next week, Chanin said. “For us, UFO is a passive ETF, meaning it tracks a passive index, so we follow hard-and-fast set rules and try to replicate the underlying index,” he said. “[VettaFi is] looking at different metrics, such as the market cap, the price, the IPO price.”
Funds that track the S&P 500 and Nasdaq-100 indexes will need to absorb between $22 billion and $27 billion in SpaceX stock, according to ETF.com. Some of the biggest funds on the market that would hold SpaceX include:
To ensure I don't have too much invested in Money Market Funds, I place a regular monthly buy in one of the following ETFs. But only 1 of them will see a change in the top 10 holdings when they are next re-computed.
iShares Core MSCI World UCITS ETF USD (Acc) (LON:SWDA)
Invesco MSCI World Equal Weight UCITS Acc ETF (LON:MWEP)
SpaceX will not be included in the S&P 500 until it is a profitable company: https://www.cnbc.com/2026/06/0...
Thanks for reverting and apologies it has taken me so long to recognise your post.
Re: difference between Nasdaq 100 Index (NAS:NDX) and S&P 500 Index (SP:SPX), the following article makes the same point.
https://tinyurl.com/2t2ywh3u
It’s not uncommon for index providers to make changes to their rules as markets evolve. And these changes are to make indices better reflect what’s trading in the market.
For example, Nasdaq has removed its minimum free float requirement, allowing companies like SpaceX with limited available public shares to still be included, although with some limits on their size.
Unlike other index providers, S&P has not changed its rules. It requires companies to have traded for 12 months before being considered for inclusion in its indices. Because of this, the earliest SpaceX could be added to the S&P 500 is June 2027.
Companies must also be profitable. Which currently, SpaceX is not, so it’s likely to be longer still.
On average, companies take nearly four years to enter the S&P 500. Tesla, for example, listed in 2010 but wasn’t added until 2020, despite being included in other major indices from 2013.
Looks like Space Exploration Technologies (NSQ:SPCX) will join Nasdaq 100 Index (NAS:NDX) this week (Tuesday ?) so worth keeping an eye on ETFs with Nasdaq 100 Index (NAS:NDX) as the underlying.
https://tinyurl.com/2sez4frb
2 different views on Space Exploration Technologies (NSQ:SPCX): Polar Capital Technology Trust (LON:PCT) buying in as it doesn't hold private companies.
https://tinyurl.com/34hw5xjc
And Scottish Mortgage Investment Trust (LON:SMT) already having made significant gains because it does hold private companies.
https://tinyurl.com/2nb5k78k
Thank you Ed for the very lucid write up on SpaceX.
I have probably drunk too much of the Musk Kool-Aid but I have watched a few recent videos of his vision (and followed him for a number of years) and it is difficult not to get caught up in it (his Terrafab project in Texas is mind boggling). I think it is one possible future of Musk Inc.
Would I put a substantial part of my net worth into Tesla (NSQ:TSLA) or SpaceX. No I reserve that for Berkshire Hathaway (NYQ:BRK.B) , Invesco NASDAQ 100 ETF (NMQ:QQQM) and S&P 500 Index (SP:SPX).
But does every investment have to be made with the expectation, through analysis, of out performing say the S&P over a long period of time?
I think one should have bit of fun in investing and I for one will take a small piece of SpaceX just to be along for the ride, with the small chance he will prove the naysayers wrong and that the market was right to give SpaceX a 92 x revenue rating in 2026!
Hear hear! Musk is like a John Galt or Howard Roark... I'm gunning for him. I listen to Moonshots podcast weekly - and am an AI/data-centre bull all round.
The demand for intelligence is infinite. It's the new light or electricity. As the price collapses, the demand will scale rapidly. SpaceX is pitched as the infrastructure for that vision.
I'm still mostly a value-investor though - more predictable returns... but if SpaceX does hit my momentum screens I'll be there.
Very nicely put article. I’m watching this one from the sidelines.
Very well balanced and informative article, by that I mean excellent!
All the best
Adding to Ed's short list of First Year Drawdowns vs Offer, I thought some readers might be interested in some more well known IPOs and their maximum First Year Drawdowns:
David.
Recommend Ed reads FT Lex today….and repents…..
I just have the normal FT sub - Lex is normally poor... summary?
Sorry. "Today" was Friday. Here's the part of Lex I suppose you meant.
I remember a few years ago the CEO of Games Workshop quipping that their main competition came from girlfriends!
My source is Copilot, so this info might be wrong; the index trackers can't front run exposure. They can buy the stock on day 15 of trading when SpaceX joins the NASDAQ index. Sounds ridiculous to me but that's a USD1.5T pool of cash who's managers are forced buyers on day 15. If I get an allocation I plan to sell on day 15 "to meet instructional demand".
I've got to correct my post (above). It turns out that the allocation to the NASDAQ100 won't be the 4-5% implied by the value of Space Exploration Technologies (NSQ:SPCX) as NASDAQ have taken the precaution of adding an adjustment to their accelerated listing process when SpaceX gets included in the index next week. The easement means that SpaceX shares will become less than 1.0% of the index - so the surge inbuying I was expecting probably won't materialise. I had no desire to be a long-term holder, so will sell may shares today.
Found this video on the problems of AI centres in space -
Conclusion - v expensive now but mid 2030s onwards might be the way to go, assuming chips are still power hungry.
Next stop, sucker stock, or worse Mag 7?. What's concerning is that if this is fast-tracked into the S&P500 then low cost momentum funds (previously known as index trackers - see Fundsmith AGM 2026) could be forced to buy this mid 2027. Nasdaq 100 and Russel 1000 funds will doubtless already have it in their sights. No space in my portfolio.
Interesting. So if SpaceX crashes the indexes will follow.
Edd,
Genuine question, given this.....
Value Rank ≈ 2.
what does a company need to do to score zero? Or, how did SPCX even manage to score 2?
The ValueRank could be a 0! The ranks I've calculated are at best just estimates.
The Momentum Rank too frankly is based on non-public information...
When it does get a rank, you'll probably find that it's nowhere near 96. It really depends how it performs after IPO. I'd also presume that the first price history point that we will get will be the close after the first day, so the IPO price will not be the first price point in the time series.
It will end up being the close price on the first day. Given other IPOs, I wouldn't be surprised if it ends up trending anywhere. It could be up or down, but I would be very surprised if it ended up, after six months, in the top decile of highest performers in the US stock market.
So it would be no surprise to see the momentum rank at about a 50 or even lower, which then would then push the overall StockRank even lower. And we all know what StockRanks style is lower than a momentum trap.
I was surprised, given the status of it's value score components, that it scored as much as 2!
Great analysis thanks Ed, confirming what we learn daily from subscribing and reading these daily postings, rather than relying on social media, coupled with a FOMO for our investment advice and actions.
Today's the day that teddy bears have their picnic.
I also remember ceo of Sun Microsystems saying in 2002:
“At 10 times revenues, to give you a 10-year
payback, I have to pay you 100% of revenues
for 10 straight years in dividends. Do you
realize how ridiculous those basic
assumptions are?
What were you thinking?”
Great analysis, Ed. Thanks for the clarity
Great write up Ed, one thing that doesn’t get mentioned is the possibility, no likelihood, of rockets blowing up on launch. Always happens in space exploration and when it does it may have a dramatic effect on the share price even if temporary.
Usually when such an event occurs, all further launches are put on hold until the failure mode has been identified and potential remedies put in place. In the case of SpaceX with their numerous launches per month, it would prove to be quite expensive! More likely to happen with Starship than Falcon 9 you would think, assuming they ever get Starship working (another potential risk).
Usually when such an event occurs, all further launches are put on hold until the failure mode has been identified and potential remedies put in place.
there was me thinking space X has had many such incidents - and that they just carried on anyway treating it as lessons learned. i am pretty sure they even expect failure with some stuff - what better way to see if something works than give ita try - am i losing the plot or is your assertion not wide of the mark. I would make an exception for manned space vehicles - a different level of safety is clealry needed there and you cant do stuff on ten fly as you can do with rockets that are basically "consumables". Ok it might happen at soem stage that they do find something that does delay for months - but Falcon 9 has over 650 launches - is that nor enough to suggest that anything that could go wrong could be fixed by simply defaulting back to whaat has worked up till now.
There were 24 flights of the Space Shuttle prior to the Challenger disaster. They had become run of the mill and there was no longer the big fanfare associated with the early launches. The conclusion of the disaster was that the commercial pressures to launch the flight overruled the concerns due to the very cold pre-launch conditions. The rubber O-rings that sealed joints in the booster were frozen solid and became inflexible leading to a fuel leak.
space X aint nasa - and i made clear in my post manned spaceflight is different kettle of fish to unmanned rockets - you can accept more frequent failures with unmanned stuff
i see zero read across from nasas extended delay to space X.
at as you say the specific issues were flagged up before the the rocket tookoff - just crazy management that ignored the risks perhaps soem em work at boeing now ?
i remember at school we had to make up our own neswpaper front page story - mine was about the shutttle exploding with the booster fuel tanks being the issue - i did that story about 3 weeks before the Challenger disaster - i think it kinda spooked out my teacher somewhat that i predicted that one before it happened. perhaps the only decent stuff i ever did in english classes.
one thing with being strapped to a rocket and blasted into space - you gotta face the reality that the chances of you dying are higher than most other forms of transport if not all.
Well there is a limited launch window to Mars, which if missed will delay the launch for 2 years, so there will be immense time pressures, no doubt with Elon insisting his engineers sleep under their desks. The only advantage they have is that they should have produced multiple ships and multiple boosters so in theory they could hot swap a configuration.
I'm sure he has every confidence and he'll be on the first manned flight. Let's see what the underwriters of his key man policy think of that.
I would perhaps go as far as saying manned missions to Mars are a pipe dream until it happens - so much stuff to overcome to get to that point - thats not to say Musk wont be trying to deliver on his promise.
You are right rmillaree that 'giving things a try' is very much a Musk mantra, and it's something spacex does with Starship, as it's still in development.
I doubt they change much with the Falcon 9 these days. Any potential failures at thus point would likely be manufacturing/refurb faults rather than design faults.
But at some point they will have to decide to either give up with Starship (unlikely) or put it into production. I expect all the early Starship flights will just be to launch Starlink only, rather than risk 3rd party commercial payloads, but it's those early launches of Starship I would worry about.
My hesitation isn't really about whether SpaceX is a great company, I think it is. The more interesting question is whether today's valuation is supported by the moat the company has already built, or by expectations for businesses that are still years away from proving themselves. The valuation debate gets most of the attention, but execution risk, capital intensity and key person dependence on Musk may prove just as important. Great companies can still be poor investments if expectations become impossible to satisfy. I'm happy to watch from the sidelines for now. If the business keeps compounding, there may be a better entry point in the years ahead. If there isn't, it will be because the company genuinely earned its valuation.
You've got three >$1 trillion IPOs happening about the same time. That's >$3 trillion with no profits! I'm dumbfounded. This goes against everything we learn about sensible/value investing.
Charles Archer on substack has an entertaining take on this...
https://open.substack.com/pub/...
What I found useful in his post is the reminder that there's a whole bunch of other unlisted companies like Stripe and DataBricks that might also want to IPO sometime too. More places to invest our money (some of which might even be profitable!)