william keough

Born in Brooklyn, raised in Jersey. Living in Asia past 25 yrs.. Stoke City supporter.. New York sports fan. Food fanatic. Coffee addict

[Dan Niles @DanielTNiles]

$SPCX: Thoughts on SpaceX IPO (typos corrected from pre-mkt post)
The company says its total addressable market is the largest “in human history,” at $28.5 Trillion. But this requires SpaceX to be thought of as a vertically integrated AI and connectivity infrastructure platform versus the rocket and satellite company which it is today.

The $28.5 Trillion TAM Breakdown is as follows
AI $26.5T: Enterprise Applications ($22.7T), AI infrastructure ($2.4T), consumer subscriptions ($760B), ads ($600B)
Connectivity $1.6T: StarLink Broadband ($870B) and Starlink Mobile ($740B)
Space $370B: Traditional launch services and space-enabled solutions

Elon Musk is the Thomas Edison of our generation and SpaceX also has no other comparable in the technology industry at this scale. But unfortunately, the SpaceX IPO valuation at ~90x CY25 revenues at a IPO price of $135 is priced as such. $TSLA, another Elon Musk company, is valued at 16x CY25 revenues as a comparison.

For those that think valuation does not matter given this is a long-term play, I would point to the $ARKK innovation ETF as a warning. Since its peak on 2/12/21 during the Meme stock mania through 6/11/26 (yesterday), it is down 51% including dividends.
$TSLA is up 47% during that time but the S&P is up 103% including dividends.

Revenue growth at SpaceX also slowed from 35% y/y in C24 ($14.0B) to 33% in C25 ($18.7B) to 15% ($4.7B) in the most recent quarter while the Net Income losses increased from $4.9B in C25 to $4.3B in just Q1:26. Free Cash Flow losses also increased from $14.0B in CY25 to $9.1B in just Q1:26 driven by capex increasing from $20.7B in CY25 to $10.1B in just Q1:26.

SpaceX says that multi-hundred-billion-dollar capital expenditures over the next five years will be required to build the infrastructure—specifically data centers and AI training capacity— to chase this theoretical market.

The stock market is clearly not responding well to
$GOOGL (down 6% in June month-to-date through 6/11) or $AMZN (down 11% in June mtd through 6/11) raising capital to chase this market or to $ORCL
results where capex guidance was higher than expected (down 18% in June mtd through 6/11 and 9% yesterday). $META’s stock is down 15% since raising capex and operating expenses on their Q1 results on April 29th vs the S&P up 4% through June 11th. Meanwhile, SpaceX will be pivoting their business to compete with the established hyperscalers above as well as enterprise software companies while currently not having a leading AI model.

In addition, I worry that the large sums of money that have already been raised by others in the equity market such as Google is reducing the amount of capital available to everyone else. Money looks infinite right up until it doesn’t. Between SpaceX, then Anthropic this fall followed potentially by OpenAI, there is likely to be $200B in capital raises this year through just these three IPOs. This will put to the test the liquidity available when 30 year treasury yields have reached levels last seen two decades ago.

As for SpaceX’s stock, I expect the stock to trade well initially given it is likely to be added to different indices soon after going public such as the Russell in 5 trading days, MSCI in 10 and Nasdaq100 in 15. This will result in a lot of forced buying by index funds. In addition, some “closet indexers” in the mutual fund community will market weight the name to avoid the tracking error relative to the indices that they are benchmarked against. After the initial 15 trading days, however, I think it gets a lot more dicey. While Elon always seems to deliver on his forecasts, they are rarely in the time frame initially envisioned. When you are doing things hardly anyone thought possible, this is understandable.

Currently the stock is trading at ~$180 in the perpetual futures contracts on Hyperliquid vs the $135 IPO price which already implied ~90x CY26 revenues. I believe the risk vs. reward is very poor at these valuation levels with capex ramping up once you get beyond the initial 15 trading days when it can be added to indices.

[Jesse Pujji @jspujji]

This is a huge moment.

It changes the trajectory and might break the economics propping up the AI bubble:

1/ This slows everything down and hands China the gap.

Feels like the first in a new series of frictions on this graph of uninterrupted progress.

And the market is exposed: strip out AI and indices are down on the year, GDP growth is negative similar to Canada.

2/ Open source gets room to close the gap.

It reprices frontier lab revenues that justified billions raised and are quietly propping up the economy.

3/ It reminds everyone revenue can be throttled by directive. That ~$15B/yr compute commitment is the AI premium baked into SpaceX's $2T.

Not good.

[william keough @2015Stalog17]

@Ms_NYRangers They just need to play Knicks brand of basketball in game 4 and we will be right back on track. Would really help if the referees called a fair game too! 😜! Go Knicks!

[Mistress Dividend @mistressdivy]

South Korea’s stock market has been halted after falling -8.4% at the open.

[Markets & Mayhem @Mayhem4Markets]

Hedge funds are very long semis and hardware, accounting for 35% of net exposure to equities now. 🧐

[william keough @2015Stalog17]

@upsidetrader Par for the course! 😜

[william keough @2015Stalog17]

@Jambro74 @Masterflip_ Vientos cannot hit a breaking ball to save his life. 😜!

[william keough @2015Stalog17]

@NYbetas @James_Schiano Soto sadly can’t hit with runners in scoring position. The statistics bear this out. 😣!

[Anthony DiGiorgio, DO, MHA @DrDiGiorgio]

Saving independent, physician-led practice is essential to saving healthcare.

[william keough @2015Stalog17]

@AngryMike24 👍!

[william keough @2015Stalog17]

@AngryMike24 JB hasn’t played a good game in the finals yet and we are still up 2-0. Will be an insane atmosphere! Go Knicks!

[william keough @2015Stalog17]

@AngryMike24 2 more wins to immortality! Go Knicks!

[william keough @2015Stalog17]

@KeithRaad @SteveGelbs Christ!

[william keough @2015Stalog17]

@NBA_NewYork Ridiculous call in the first place! Please make sure the referee crew from Game 2 are prohibited from participating in the rest of the Finals. Thank you very much!

[william keough @2015Stalog17]

@TheMetsX Probably would flourish in any other market. 😜

[william keough @2015Stalog17]

@TheMetsX I like Brett but guy cannot consistently hit for average and production. Not sure why but just cannot.