Should I Buy SpaceX? — Finance YouTuber Analysis

The YouTuber advises against buying SpaceX on day one of its IPO due to concerns about its valuation, which he believes is pricing in future projects that may not generate profit for decades. He also highlights the unusual staggered lock-up schedule for insiders, which could lead to significant selling pressure, and the company's current operating losses despite high revenue. He argues that the IPO is designed for insiders to cash out, making retail investors exit liquidity.

“I am absolutely not buying the stock on day one and I am not shedding a single tear over missing the initial hype cycle. Chasing a brand new listing at a historic valuation is the easiest way to light your capital on fire because you are trading entirely on dopamine instead of data.” — ▶ 10:00

The YouTuber believes SpaceX's projected $2 trillion IPO valuation is unjustifiable, trading at 105 times 2025 sales and over 300 times operating cash flow. While acknowledging its innovative nature and long-term potential, he argues the current valuation reflects market euphoria and is detached from its financial performance, which shows significant losses despite revenue growth, with only Starlink being profitable.

“If SpaceX actually IPOs around a $2 trillion valuation, then it would be trading for 105 times sales based on their 2025 numbers and over 300 times operating cash flows. And it would be one of the largest companies in the world. That valuation simply is just unjustifiable to me.” — ▶ 16:00

The upcoming SpaceX IPO is unusual due to its fixed price issuance of $135 per share, bypassing traditional price discovery. This means retail investors will largely determine the day-one valuation, which is already considered a stretch at $1.8 trillion. Additionally, lockup periods for insiders are shorter than usual, potentially leading to significant stock supply hitting the market after Q2 and Q3 earnings, which could create volatility and balance out index demand.

“This is a very odd deal and it's a fixed price issuance. It's $135 a share. It's not an typically speaking when you market an IPO, and I marketed a ton of IPOs in the '90s. You go around, you visit institutional investors, you gauge their interest, you build a book, the bankers look at the book and say, "Okay, we think the price should be X." The company says okay and off you go. Here the company has said it is $135 a share at 1.8 trillion 1.7.” — ▶ 00:18:00

The YouTuber argues SpaceX is a generational opportunity due to its massive total addressable market in space, connectivity (Starlink), and AI (space-based data centers). Structural factors like tax disincentives for early investors to sell, the ability to borrow against shares, and Nasdaq's rule changes forcing index funds to buy will create a 'structural squeeze' post-IPO, driving the stock significantly higher.

“If you get even a few hundred shares at IPO price, and the squeeze plays out the way I think it might, there is some upside here.” — ▶ Watch clip

The analyst advises avoiding SpaceX's IPO due to the typical dynamics of such offerings, where early investors cash out, creating 'exit liquidity' for retail investors. He highlights the risk of a significant price dip around the six-month lockup period expiration, citing historical examples like Uber and WeWork. While acknowledging SpaceX's strong fundamentals and long-term potential, he believes the initial IPO valuation will be too high for substantial short-term retail gains.

“The IPO is not designed to make you money. It is designed to make the early investors rich.” — ▶ 04:50

The analyst advises against investing in SpaceX due to its extremely high valuation (P/S ratio of ~100) at its IPO, significant operating losses, and questionable business integrations. He also highlights concerns about corporate governance under Elon Musk and the historical underperformance of IPOs in their first year.

“Halten werde ich von Space X. Absehbar keine Aktien und auch nicht indirekt durch eine Nasdack ETF.” — ▶ 20:00

The YouTuber advises avoiding 'hyped up names' like SpaceX, suggesting that while they might be great stories, paying the wrong price for them can lead to significant losses. This aligns with his principle that a great story becomes a bad investment if the price is too high.

“I'm focusing on companies with real earnings, strong balance sheets, and reasonable valuations, not the hyped up names like SpaceX or SanDisk or Intel.” — ▶ 20:30