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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different clue
It s a Nelson Muntz moment, with hopefully more to come. I hope Melon Husk is busted all the way down to mere mini-millionaire status.
Jan Wiklund
That the climate is really changing is something I can see personally, each summer since at least 2017 experiencing heat periods longer than the last. Only conservatives, people who don’t want to change their lifestyle the least, believe the opposite.
Of course this is nothing one can change by buying electrical cars, even electricity must be produced somehow, not talking about the cars. Time to get away from the private car society! Distances cost, for us all.
Jan Wiklund
More about this at https://peterturchin.substack.com/p/ac-for-me-not-for-thee
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Anyway, I hope you didn’t buy SpaceX unless you were taking advantage of the rug pull to do a short term trade.
If they did, they deserve their just deserts and in fact, I’ll go a step further and say they are complicit entirely with that which they decry so self-righteously at this space and other venues. If the likes of Macron deserve to tried and executed when the revolution never comes, so too there must be severe consequences for the enablers and yes, if you have skin in the Wall Street game, you are DIRECT enabler. My choice of justice for these direct enablers? Work camps. They can pay their penance for willing complicity by rebuilding America’s crumbling infrastructure.
LY
Better lucky than to be good.
I’d also add in Starlink as a success, but it’s not “enough” because the market will saturate and margins shrink as competition emerges.
The shine is really off. My highlights are: Tesla’s self-driving vaporware, acquisition of Twitter by waiving due diligence, Musk’s gutting of Tesla’s supercharger management, the stalling of SpaceX’s rocket development, and the sheer stupidity of Hyperloop and the Vegas Loop.
bruce wilder
“ Musk
iswas the world’s first trillionaire”He’s not today on present valuations, right?
Greatest conman is right. The forcible violation of rules on index formation to drain funds from unmanaged investment vehicles is financial genius in a way but also an evil way.
Decadence.
mago
Jan Wiklund makes a good point about electricity—all energy has to be produced somehow. Batteries are toxic beyond belief; although the technology has seemingly improved, there’s still the chain of production, mining etc. and then the disposal.
That aside I’ve always found the Musk world to be some kind of surreal fantasy land. Yeah, production happens, things are bought and sold, but it’s all worthless and destructive from my perspective. That an arrested adolescent like Musk can amass obscene amounts of wealth speaks to a distorted reality, but then there are almost infinite examples these days.
Purple Library Guy
The Boring Company was a great name, but it was another example of this tendency of techbros to look superficially at a problem space and think “We could do this radically differently and it would be so much better because I am a genius and none of the idiots who have worked on this before could see what I see” because they don’t actually understand the problem or the reasons why it is currently done the way it is done. Don’t get me wrong, sometimes a fresh viewpoint will in fact see that some of the ways things are being done are no longer relevant or were just never that good in the first place. Sometimes even an arrogant techbro will see a real insight.
But a lot of the time, they’re just fooling themselves because they have no respect for anyone else’s knowledge, intelligence, or expertise.
edwin
I have just bought an ev (not a Tesla) after our car’s engine died a horrible death. Musk’s charging network is probably critical for modern car ev travel at least in the Toronto area. A number of ev car makers now support his charge layout as standard. He probably wanted to be remembered for space x, starlink, tesla cars, or even the vegas loop (https://www.youtube.com/watch?v=e7vFCP3PtuA). In fact he might be remembered for his charging network (and that nassi salute).
It is interesting how things which are considered secondary sometimes become more important than what we at the time considered primary.
Purple Library Guy
The nefarious part of this IPO was Musk twisting arms until he got his giant pump-and-dump put on things like the NASDAQ, which means that as Mr. Welsh says, masses of “index funds” including a lot of pension funds were basically forced to buy it. Which in turn means that a lot of people are exposed who weren’t buying SpaceX or even playing the stock market at all.
But I’d like to strike a note of hope. Musk, and Trump, and Thiel, a lot of these guys remind me of the villains in the work of Jack Vance, a science fiction writer who wrote from the 60s through to I guess the early 2000s. Anyway, a lot of his villains are these selfish, confident people who are often very feared by anyone who might consider opposing them. But they are ultimately not as hard to defeat as one might think, because they are like aggressive but bad chess players: They are so dedicated to their own schemes and machinations that they never bother thinking about what the other player might be doing. They are, as another SF writer Gordon R. Dickson put it, predictable because they are “too immersed in their own point of view”. This major strategic weakness goes with the huge egos and contempt for everyone else, I guess.
Mark Pontin
Purple Library Guy:’Jack Vance, a science fiction writer who wrote from the 60s through to I guess the early 2000s.’
Vance’s first published story was in 1945, his last novel was in 2004, and there was an autobiography (dictated, he was blind) in 2009. He died in 2013 at the age of 97.
So actually a writing career that lasted sixty years.
different clue
Looks like Elon Musk attended the Donald J. Trump school of business at some point.
Contractor who built Colossus and Colossus II says Elon Musk owes him colossal amount of money
https://www.reddit.com/r/videos/comments/1velrft/contractor_who_built_colossus_and_colossus_ii/