SpaceX valued at just $780 billion by Morningstar, less than half its IPO target
Source: finance.yahoo.com
SpaceX (SPAX.PVT) just got slapped with a bearish valuation ahead of its monster IPO coming up later this month. The report signals that one of the most anticipated offerings in years may be significantly overpriced, just as CEO Elon Musk tries to justify the valuation.
Morningstar initiated coverage of SpaceX with a fair-value estimate of just $780 billion, less than half the roughly $1.8 trillion valuation the company is targeting in its initial public offering.
Analyst Nicolas Owens’s discounted cash flow model valued SpaceX’s core launch and Starlink satellite businesses at about $611 billion in enterprise value, plus an additional $170 billion in “probability-weighted scenarios” for the company’s AI operations.
Read more: https://finance.yahoo.com/markets/article/spacex-valued-at-just-780-billion-by-morningstar-less-than-half-its-ipo-target-174617034.html
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The incestuous circular deals are sure reminiscent of the dot com bubble.
This all-in bet on AI that is the American economy is incredibly fragile, however you look at it. Particularly when you add in the fact that our economy relies on spending by the wealthiest. The problem with decimating the middle class is that relying on the wealthiest spending lots is dicey. The minute things start going south, they can cut way back, sending the economy into a death spiral.
https://www.profgalloway.com/how-does-the-end-begin/
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If Mag 10 valuations are cut in half, the S&P and global markets would decline by 20% and 10%, respectively. In the U.S., the immediate impact would be felt by the wealthiest 10%, who own 87% of the stocks. Those households won’t struggle to pay their bills, but they may be the tail of the whip on the economy, as wealthy households have the luxury of decreasing their spending dramatically, vs. middle-class households, who spend the majority of their income on basics. If the top 10%, who account for half the consumer spending in the U.S., hit the brakes, the nation gets whiplash. I estimate that if the wealthy see their portfolios drop by 20%, we could see a 2-3% decline in GDP. For context: From peak to trough, the Great Recession registered a 4.3% drop in GDP.
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