A forecast of the fair market value of SpaceX's businesses

Original Article ↗ Hacker News Discussion ↗

Valuation, P/E, and “Fair Price”

  • Many commenters see the implied ~$1.75T valuation on ~$12–16B revenue and ~$1.5–3B net income (P/E ~500–1000) as extreme and potentially exploitative of retail investors.
  • Others argue high P/Es can be rational for high-growth or high-optionality businesses; discussion of P/E as “years of earnings” vs. discounted value of all future cashflows.
  • One subthread debates whether a “fair” P/E is 1, with others explaining why that would imply absurdly high returns and instant private-equity buyouts.
  • Comparisons are made to Tesla’s 2010 valuation (seen in hindsight as cheap given subsequent results) versus today’s much smaller current space market.

Index Rules, Float Multipliers, and Passive Investors

  • Major concern: Nasdaq’s proposed rules for mega-IPOs (e.g., SpaceX, OpenAI):
    • Fast entry into Nasdaq-100 within 15 trading days.
    • 5x weighting multiplier for low-free-float stocks (capped at 100%).
  • Critics say this forces index funds to buy into hype at inflated prices and overweight a stock with very little float, calling it a wealth transfer from 401k/retirement savers to insiders.
  • Others counter that for broad, float-adjusted indexes (e.g., total-market funds) SpaceX will still be a tiny weight; individual impact is small even if aggregate dollars are large.
  • Discussion of whether index fund managers have a fiduciary duty to oppose such rules, and how licensing, tracking error, and branding constrain their ability to deviate.
  • Some note S&P and FTSE might follow Nasdaq; others look for alternative indexes that delay or dampen inclusion.

Business Fundamentals: Starship, Space, and TAM

  • Debate over whether space is currently large or profitable enough to justify valuations based on Starship and long-term Mars/space visions.
  • Some argue Starship’s technical progress and potential ultra-low $/kg will unlock new markets (labs, hotels, weapons, large telescopes, private science).
  • Skeptics question near- to medium-term paying demand, note shrinking incremental need beyond Falcon 9, and highlight unresolved issues around upper-stage reuse and payload shortfalls.

Starlink and xAI Valuations

  • Starlink: skepticism that an ISP with ~10M users and ~$10B revenue merits ~$300–600B; comparisons to much cheaper legacy telecoms; counterpoints citing high-value enterprise/military/remote markets and global, war-zone coverage.
  • xAI: widely viewed as massively overvalued (~$258B) given modest revenue and heavy losses; seen as riding internal transfer pricing and “frontier lab” comparables despite weak perceived product competitiveness.