Skeptics Step Back From SpaceX
The IPO is shaping up to be institutional skepticism versus retail euphoria.
Just weeks before what is expected to be the largest public offering in history, SpaceX, investors are seeing early signs that enthusiasm may not be quite as limitless as the headlines suggest.
And, before you give me shit, if you think I’m writing too much about the forthcoming SpaceX IPO, keep in mind that personally, I view this IPO as a meaningful signal on the remaining life of the current AI-fueled bull market. Ergo, I think it deserves to be watched closely.
If the IPO goes off great, it could signal there is still plenty of room for the market to run. If it keeps hitting roadblocks, it could signal that the market is near a top.
The first warning sign popped up during the valuation adjustment that I talked about days ago. SpaceX reportedly had already reduced its IPO target from earlier discussions above $2 trillion to approximately $1.8 trillion after consultations with advisers and investors.
Elon Musk called this report “false” while offering up little detail, as he has done for multiple less-than-favorable reports on Tesla and SpaceX over the last few years1.
Regardless, while $1.8 trillion still remains an extraordinary figure, the apparent direction the valuation — which is absurd by any metric if you ask me — moves matters. In strong bull markets, flagship IPOs typically see valuation expectations move higher as demand builds. Seeing expectations potentially move lower before the roadshow has even begun suggests investors may already be pushing back against the most aggressive assumptions.
And this past week, a second crack appears to have emerged.