SpaceX’s Market Debut Raises Eyebrows
SpaceX has rapidly joined the Nasdaq 100 index, which connects the stock performance of Elon Musk’s rocket venture to the retirement portfolios and mutual funds of numerous American investors.
However, Jeremy Grantham, co-founder of GMO and known for his bearish stance on markets, casts doubt on the company’s valuation and the overall investment premise. He remarked on Morningstar’s podcast, The Long View, saying, “People are lining up to buy the craziest IPO in human history. In fifty years, people will recount tales of SpaceX, referencing parts of the prospectus—they’ll be laughing at it.”
“At some point, the reality will unfold,” Grantham added, noting that it might become a significant historical event to reflect upon. “It’d be ideal if it didn’t crash, but it would demand incredible advancements in AI that could revolutionize our daily lives.”
SpaceX launched its IPO on June 12, starting at $150 per share, which exceeded its initial listing price of $135. As of Wednesday afternoon, the stock was around $149 per share, indicating a nearly 7% decline for the month.
According to reports from Fortune, major financial institutions like Goldman Sachs, JPMorgan, and Morgan Stanley are optimistic about SpaceX’s valuation, setting price targets between $205 and $300 per share.
Grantham also took aim at Wall Street, criticizing its role in promoting SpaceX to clients. He mentioned that even if the stock gains value in the future, it might reflect a “strange society” where individuals are easily influenced by automated trading systems.
The swift inclusion of SpaceX in the Nasdaq 100 has influenced its stock performance. Grantham explained, “When a stock enters such an index, it generates significant demand from buyers. There will be more interest than available shares.” He conveyed that considering supply and demand, it’s challenging to foresee prices not rising—possibly substantially.
SpaceX’s IPO raised a staggering $75 billion, making it the largest IPO in history, a record that eclipsed Saudi Aramco’s $29 billion IPO from 2019.
This IPO has established Musk as the world’s wealthiest individual, with his assets reaching $1 trillion—a milestone never before achieved.
Founded by Musk in 2002, SpaceX stands as the largest space company globally, a key player in commercial launch services. The firm’s innovative work with reusable rockets has notably cut launch costs, altering the financial landscape of the space industry. It also plays a crucial role as a contractor for NASA and the U.S. government, involved in both civil and national security missions.
