Watching SpaceX stock trade as a newly public company has been akin to observing a successful rocket launch. The rise of its shares has been remarkable.
SpaceX’s achievements are notable. It had the largest initial public offering ever, positioning its founder, Elon Musk, as the first trillionaire. By Thursday, the company’s market value reached approximately $2.4 trillion. At its peak during the week, it ranked just behind Nvidia, Alphabet (Google), and Apple in market capitalization. Despite two challenging days, SpaceX remains among the top 10 stocks, a group reserved for elite companies.
Questions arise about whether SpaceX truly deserves this lofty status. Are its shares genuinely worth such a high value?
While Elon Musk is recognized as a visionary with significant accomplishments at Tesla and SpaceX, the current valuation of SpaceX might not be justifiable by standard financial metrics. The company is not currently profitable, which raises concerns.
Investing in SpaceX is fundamentally a bet on a science fiction-like ambition.
According to SpaceX’s prospectus, the company’s explicit goal is to establish a permanent human colony on Mars, aiming for a population of at least one million. This is not a fleeting fancy. Musk has repeatedly and elaborately declared his commitment to making humans an interplanetary species.
Such ambitions could drain any potential profits SpaceX might generate. Even if successful in other ventures, the Mars project carries the risk of financial ruin for the company.