Dear WIMM reader,
I am looking forward to the SpaceX IPO as much as anyone.
In the meantime, you will see plenty of conflicting opinions, from newspapers, analysts, commentators, and everyone else with a view on Elon Musk. That is normal. But that is also exactly why I decided to write this piece differently. Not just about the company, but about how Elon thinks.
Because if you understand how he allocates attention, risk, ambition, and time, you may be in a better position to make future investment decisions when it comes to his companies.
Onto the update:
Both excerpts were published on the 4th and 5th of June 2025.
From Yahoo Finance:
Across more than 9,000 operating-company initial public offerings from 1975 to 2021, 60% of returns finished flat or lower three years after the first close, while only 16% more than doubled. The average return was positive — but only because a small group of moonshots pulled it higher.
From Financial Times:
Goldman expects revenues from SpaceX’s AI division to rise to $322bn by 2030 from $3.2bn in 2025, according to forecasts discussed by the Wall Street bank with a potential investor in the deal. SpaceX’s total revenue is expected to reach $474bn in 2030 from $18.7bn last year.
..and again Yahoo Finance:
Morningstar initiated coverage of SpaceX with a fair-value estimate of just $780 billion, less than half the roughly $1.8 trillion valuation the company is targeting in its initial public offering.
Analyst Nicolas Owens’s discounted cash flow model valued SpaceX’s core launch and Starlink satellite businesses at about $611 billion in enterprise value, plus an additional $170 billion in “probability-weighted scenarios” for the company’s AI operations.
Wall Street still doesn't get it
On June 12, SpaceX will debut on the Nasdaq at $135 per share, ie. a $1.77 trillion valuation, raising $75 billion in what will be the largest IPO in history. Morningstar has already published their verdict: the company is worth $780 billion (see above), roughly half the asking price. Smart investors, they say, should wait for the hype to cool and buy later.
This analysis is coherent, internally consistent, and almost certainly wrong in the way that matters.
We have seen this movie before.
The Steve Jobs comparison, and why it falls short
Every generation or so, someone comes along who reshapes the gravitational field around an entire industry. Steve Jobs is the canonical example, a person whose taste, conviction, and reality-distortion field were so singular that normal analytical tools simply failed to capture what he was doing. You could not model Jobs in a spreadsheet. You could not DCF his product intuition.
Elon Musk is that, but the comparison undersells him in one critical way.
Jobs operated within a single domain. He took a broken computer company and turned it into the most valuable consumer electronics business ever built. That was extraordinary. But Musk has done something structurally different: he has done it simultaneously across rockets, electric vehicles, satellite internet, AI, and, arguably, geopolitics itself.
That distinction matters enormously when you try to assess SpaceX as an investment.
The IPO model is inverted, and that is the point
Here is what the Morningstar analysts are optimizing against: the traditional IPO playbook. A company builds infrastructure, proves unit economics, establishes revenue, grows into profitability, and then, when the business is de-risked, goes public to harvest capital and provide liquidity to early investors. The IPO is a terminus, more like a graduation ceremony. Musk runs this in reverse.
He accumulates capital, not financial capital first, but social capital (= narrative capital, movement capital, etc). He creates a gravitational pull through sheer force of ambition stated publicly, repeatedly, at civilizational scale. "We are going to Mars", "We are going to make humanity multiplanetary". The mission is the moat.
By the time SpaceX prices this IPO at $1.77 trillion (on less than $20 billion in trailing revenue, while still unprofitable) Musk has already spent 15 years building something that cannot be replicated by any competitor with a normal business plan, which is, a coalition of true believers who will buy the stock not because of discounted cash flows, but because they want to own a piece of the mission.
The IPO is the capital raise to build the infrastructure. The social proof came first. The funding follows.
No one does this at scale. No one.
Why Tesla should have been the warning
I have deliberately avoided commenting on Tesla's stock price over the years, and for good reason. The framework required to evaluate it correctly was one that most of Wall Street refused to adopt.
The bearish Tesla thesis was always analytically rigorous. Competition from legacy automakers, margin pressure, valuation multiples that implied decades of flawless execution. The bears were not stupid. They were applying the right tools to the wrong problem.
Tesla was never purely a car company in the way that a DCF model assumes. It was a movement, a brand religion, and a platform, and those things compound in ways that gross margin analysis cannot capture. Every analyst who called the stock overvalued at $50 adjusted their target price upward when it hit $200, then again at $400, then at $800. The error was not in the arithmetic. The error was in the model of what the company actually was.
SpaceX is a harder version of the same problem.
At least Tesla had cars you could touch, a factory you could tour, delivery numbers you could count. SpaceX's core asset is a monopoly on the credibility of human space colonization, and there is no comparable asset anywhere in finance to anchor a valuation against. The Morningstar analysts are doing their jobs. They are just not doing the job that the SpaceX IPO requires.
So, should you buy it?
Let me be clear about what I am not saying. I am not saying the stock cannot go down. I am not saying $1.77 trillion is the right number. Musk is a genuinely polarizing figure whose political entanglements create real headline risk, and a company trading at 90x revenue with no profits is not for the faint of heart.
What I am saying is this. The relevant question is whether you believe that Elon Musk will, in fact, put humans on Mars, and whether the infrastructure required to do that is worth owning.
If the answer is yes, then every traditional valuation metric is the wrong unit of measurement. You are not buying a rocket company. You are buying the only credible attempt at a multi-planetary civilization, run by the only person alive who has consistently turned that stated ambition into hardware that actually launches.
That is not an investment thesis you will find in a Morningstar model.
There will be smart people on television on June 12 explaining why this IPO is irrational. Some of them said the same thing about Tesla at a tenth of its current market cap.
The lesson from the last decade is not that Musk is infallible. The lesson is that the analytical frameworks we inherited from 20th-century finance were built for a world where infrastructure comes before narrative. Musk has simply reversed the sequence, and the people still running the old playbook keep being surprised when the stock does not behave the way their models predict.
Maybe this time they are right, but I would not bet on it.
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Finally, “Where is my moat?” is designed for individual readers, though the occasional forward is absolutely fine.
Thanks for your support & have a wonderful day!
