everyone is talking about the SpaceX IPO number, almost nobody is doing the actual math
Bloomberg reported this week that SpaceX already walked back its valuation target - it was above $2 trillion in April, now settling at $1.8 trillion after talks with advisers and investors
that move alone should tell you something
$1.75 trillion sounds like a valuation. it is not. it is a scenario - one where Starship flies at commercial scale, Starlink hits 80-100 million subscribers, and at least 2-3 unproven revenue streams become real businesses, all on a compressed timeline
Professor Jay Ritter, who has studied IPO pricing data for over 40 years, found that companies going public with a price-to-sales ratio above 40 have historically delivered disappointing returns
SpaceX is going public at 94x
the disciplined DCF lands at $150-200 billion
the $1.75 trillion number only appears in the "everything goes right, in the right order, in the right timeframe" scenario - which requires about 15 years to play out
the article below runs the actual numbers, separates confirmed revenue from speculation, and shows you the specific conditions that have to be true before the valuation makes sense