Investor Scott Galloway says SpaceX shares are worth $10 to $30, far below the $146 they traded at Monday. He cites a limited 4% to 5% float, Nasdaq-100 inclusion, and a $25 billion post-IPO bond sale as evidence of an overvalued AI-infrastructure bet.
SpaceX shares are worth $10 to $30, far below the $146 they traded at Monday, investor Scott Galloway said.
"It's still crazy overvalued," Galloway, a marketing professor at New York University, said on his podcast. "I think this is a $10 to $30 stock."
SpaceX priced its initial public offering at $135 a share in June, giving Elon Musk's rocket company a valuation of roughly $1.8 trillion. The stock climbed to $225 before dropping about 45 percent to $123, then rallied to trade above its IPO price for the past week. Only about 4 percent to 5 percent of shares were initially available for public trading, limiting supply, and its inclusion in the Nasdaq-100 created demand from index-tracking funds, Galloway said.
Less than two weeks after its debut, SpaceX priced a $25 billion bond offering even though it had disclosed $100.8 billion in cash and cash equivalents. Galloway said the sale showed investors were buying into an AI-infrastructure bet attached to the launch business, with future expansion increasingly reliant on borrowing.
Musk "will go down as the greatest engineer of our time, but as a financial engineer," Galloway said. He questioned whether investors should view SpaceX primarily as a rocket and satellite company, noting the stock trades at roughly 94 times trailing revenue, richer than any S&P 500 company.
Galloway isn't alone in expecting declines. George Noble, formerly manager of Fidelity Overseas Fund, told Business Insider that SpaceX and Tesla represented "two of the best shorts in the market." Noble, who predicted SpaceX could fall as much as 50 percent by year-end, valued both companies at roughly $30 a share, implying 79 percent downside for SpaceX. "Grandma's 401(k) now owns a $2 trillion company at roughly 90 times revenues. That's outrageous," he said.
Despite his bearish valuation, Galloway said he wouldn't short the stock, citing Musk's following and ability to excite investors with new ventures. "I wouldn't get near this thing," he said, adding that the stock could become a meme stock and surge again if Musk announced another ambitious project, such as "quantum computing on the moon."
The call puts Galloway at odds with Wall Street, where analysts hold a Moderate Buy consensus with an average price target of $232.35, implying 61.7 percent upside. The first employee lockup window opened Aug. 6, freeing roughly 911.5 million shares, with more tranches through December, testing whether the valuation holds as supply expands.
This article is for informational purposes only and does not constitute investment advice.
