How About $10 For SpaceX Stock?

Warren Buffett once said the stock market is a no-called-strike game. You don’t have to swing at every pitch. SpaceX (SPCX) is the most hyped pitch in a generation. We are letting it go by.

A price that would make us genuinely greedy about SPCX is around $10. Maybe $20.

Yes, that is way, way below the $135 the SpaceX IPO is expected to price at on June 12. But hear us out.

The Price You Are Actually Paying

At $10 a share, SpaceX would still be worth roughly $130 billion. At $20, the valuation climbs to around $260 billion. Against roughly $20 billion in revenue last year, that works out to about 13x sales at a $20 price.

For context, fast-growing companies with over $1 billion in revenue and 30%-plus growth tend to trade at 10x to 20x sales, and those are mostly software businesses with minimal capital needs. SpaceX At 100x Revenue: A Warning From 2000

SpaceX builds rockets, satellites, and data centers. The capital demands are in a different league. More to the point, the telecom and industrial sectors that the company actually operates in are accustomed to 1x to 3x revenue multiples. Investors pricing it like a software company are making a deliberate bet that SpaceX transcends both categories entirely.

Add to that the losses. SpaceX spends roughly $35 billion in cash annually against $20 billion in revenue, losing around $15 billion a year. There is no clear timeline to profitability, and the three divisions inside the company each carry their own version of this problem.

Starlink is genuinely profitable at the operating line, but satellite replacement costs are structural – low Earth orbit satellites burn up every three to five years – and average revenue per user has been falling as growth shifts to lower-income international markets. The problem with Starlink’s next 10 million users

The launch business is a similar story: Falcon 9 is a profitable workhorse, but those earnings are being consumed by Starship development, which has yet to prove reliable for commercial operations.

The AI division has burned nearly $9 billion in losses over fifteen months. The long-term bet rides on orbital data centers –  a genuinely interesting thesis but largely unproven. See The Radical Bet At The Heart Of SpaceX’s $1.75 Trillion IPO While SpaceX has signed massive deals to sell compute capacity to others – including recent mega-leases with Anthropic and Google – it remains to be seen whether these bridge contracts can permanently offset the division’s astronomical, multi-billion-dollar infrastructure costs.

So What Are You Actually Betting On?

We think SpaceX will almost certainly succeed as a company. The question is what you pay for that success.

So what are buyers at $135 per share counting on? That others will bid the price up further. That multiples expand. That growth accelerates well past 30%. All possible. None guaranteed.

SpaceX could grow faster than anyone expects and ultimately justify today’s valuation. But investing is not about finding great companies. It is about finding great companies at prices that leave room for error.

At the IPO price, there is very little room for error. Investors are being asked to underwrite an extraordinary future today and pay for much of that success upfront.

We are content to watch this pitch go by.

If SPCX drops 50% from the IPO price to around $60, would you buy more? If the honest answer is no, that tells you something important about the risk you are taking on today. How you measure that risk – and how much of it belongs in your portfolio – is a deeply personal question and one worth understanding better from experts.