So, SpaceX’s stock is down to $108. It started at $150. It spiked as high as $225. (Hope you didn’t buy it then.)
Ouch.
This was completely predictable, because SpaceX doesn’t have a product worth its MASSIVE valuation. Everything was done to spike SpaceX’s initial offering, including letting it into multiple indices, which means that pension funds and so on were forced, in effect, to buy it.
Meaning your pension fund just took a huge loss.
The key to SpaceX’s valuation, such as it is, is reusable rockets.
The news comes just days after Chinese state-run media showed a Long March 10B rocket booster being caught by an offshore recovery platform, indicating the country was making major strides in catching up with SpaceX’s reusable rocket tech. Over the weekend, an experimental Japanese reusable rocket safely took off and landed, suggesting the nation may be right behind China as well.
Beyond some steepening international space launch competition, experts believe SpaceX’s transformation into an “AI play” may be closely related to its Wall Street woes, as the BBC reports.
“Everyone saw SpaceX as an AI story,” CFRA investment research analyst Keith Snyder told the broadcaster.
“With Elon Musk, any company he touches gets people excited,” he added. “But this was also the first time people felt like they were able to invest in something that was being marketed as an AI play.”
I predicted years ago that Musk didn’t have a moat on reusable rockets. The problem is simple: once the Chinese get a tech, they an always scale much better than competitors, because they have a robust, low priced industrial sector due to actually having competitive markets and useful industrial policy.
As for X being an “AI stock”, well, generally Grok is and has remained by behind most other major AIs in performance benchmarks. There’s no particular reason to believe it’s going to win the AI race, and it’s expensive and closed source, so how it’ll make a profit is unclear to me.
Musk is the world’s greatest conman. Oh, he’s done some important stuff, but it’s been years now since he actually pulled off anything major and real: electrical cars, batteries, reusable rockets are all well in the past. Tesla is only kept alive by the refusal of the US and EU to let much cheaper Chinese EVs into their markets. Spaceship keeps failing. Musk is personally toxic with the sort of people who buy EVs in Europe and the US: liberals and left wingers who believe in climate change.
Anyway, I hope you didn’t buy SpaceX unless you were taking advantage of the rug pull to do a short term trade.
This is just another example of “make the rich, richer” and American delusional belief in their own superiority. Musk is the world’s first trillionaire, but he isn’t going to stay that way.
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