What is SpaceX actually worth?

Dear Reader,

This is Dylan Jovine with Behind the Markets.

Happy Wednesday. Today is Wednesday, June 10th.

So what is SpaceX actually worth?

The Dean of Valuation Weighs In

Someone thought to ask Aswath Damodaran — the professor of corporate finance at NYU's Stern School of Business, widely known as the Dean of Valuation — what he thinks SpaceX is worth.

This is a man who has written dozens of textbooks on investment valuation theory and spent his life studying this exact question.

His estimate: roughly $1.3 trillion in equity value.

SpaceX is going public at $1.77 trillion.

His key concern is the xAI business.

In SpaceX's paperwork, Musk claims xAI has a $26 trillion total addressable market.

The professor finds that number hard to swallow, given that xAI is competing directly with Claude, ChatGPT, Google, and Meta for a slice of that pie.

Now, does that mean the stock will underperform?

Not necessarily.

The professor himself said it — the company may be overvalued and still soar.

Because there is something else happening here that has nothing to do with valuation.

The Timeshare in Cancun

Let me tell you a quick story.

When I was young on Wall Street and starting to make a little money, I thought I was a big shot.

So I took a girl I was dating to Cancun for the weekend.

And I see a sign: Free Lunch.

Come on in.

So I walked in — I don't know what I was thinking.

And I found myself in a room with about 30 couples, and salespeople working the floor.

Every time somebody agreed to buy a timeshare, they rang a bell, confetti flew, and everyone cheered and clapped.

And I watched it happen in real time.

One couple across the room would buy.

Everyone cheers.

The couple in front of me would suddenly say, "You know what? I'm gonna do it too."

That was the day I truly understood crowd psychology for the first time.

It was not easy to escape, by the way.

I never accepted an invitation to a free lunch again.

Why I'm Telling You This

Because I have watched that same dynamic play out on national scales and global scales ever since.

The real estate bubble.

Every participant was happy — the mortgage underwriters, the real estate agents, the homeowners, the Wall Street banks.

A positive reinforcing cycle radiating outward.

You buy more things. You take the wife on a trip. You buy the kids new shoes.

And then one day the music stops.

We saw it with cannabis stocks.

We saw it with Bitcoin — a mass delusion that lasted years, which is the thing about mass delusions.

They can last a very, very long time.

SpaceX Is a Masterclass in This

What you are watching with SpaceX right now is one of the most well-executed promotional campaigns I have ever seen.

The prime mover is Elon Musk.

Then the banks promoting the deal.

Then the early investors who stand to make enormous returns.

Then the employees who have been grinding for 20 years and are finally getting their payday.

Everyone in that circle is radiating outward, singing the same chorus: this is going to be great, this is going to be great, this is going to be great.

And they keep reminding you about the Tesla millionaires.

Which brings me to something worth understanding.

Tesla did make a lot of millionaires.

But Tesla did not come public fully valued or overvalued.

Tesla came out at a modest valuation because companies didn't stay private as long back then.

SpaceX stayed private for 24 years.

Most of that Tesla-style value was captured by private investors years ago.

The returns on pre-IPO deals can be mind-boggling.

Private investors recently had a chance to see gains as high as 150X on Cerebras… 396X on Perplexity… even 400X on Harvey AI.

That last deal alone could have turned $1,000 into $400,000.

The catch is that all those gains went to private investors who got in before the IPO.

That's why we went live to reveal what I believe is The #1 stock to own BEFORE the SpaceX IPO.

At $1.75 trillion, you're buying the most expensive IPO in history — at 266 times earnings — on Day 1. The institutions who got in at $800 billion need someone to sell to. That someone is you.

But there's another way.

One small company in Musk's supply chain is still trading at a fraction of its value. It builds the power infrastructure Colossus can't run without.

Am I saying SpaceX won't go up 10X over the next 20 years?

I can't say that.

But 10X in the next year?

That would be extraordinary.

What I Want You to Do

Step back.

Have an out-of-body experience.

Watch the whole game from the outside.

Identify the participants.

See the positive circle spinning.

Understand what is happening before you decide whether to get involved.

Tomorrow or the next day, I'm going to walk you through how IPOs actually perform in the period shortly after listing — and how some smart people trade them.

But first I wanted to make sure you understood the inside baseball.

Because it is genuinely fascinating, and you don't see something this well-orchestrated very often.

Anyway, that's all I have for you today.

Have a wonderful day.

I will see you tomorrow.

“The Buck Stops Here,”