SpaceX are widely reported to be planning to raise $75Billion in new capital. It may seem small a % for the valuation target. However that is about 3 times previous highest raise of $29B when Saudi Aramco went public few years back. The market simply may not be that deep[1]
There is a good chance this one becomes the Wework of this decade. The valuation, amount being raised, cooling interests in AI, and middle eastern capital changing priorities, interest rate outlook for the rest of the decade. These are all strong head winds to overcome even when not raising the largest ever amount in an IPO.
That is not say that it is destined to fail, Elon is excellent salesman of vision when fundamentals are weak, There is no better proof than Tesla P/E .
It is by no means clear this would be successful or not. The valuation, funds being raised, future growth potential are all not based on just SpaceX core businesses which would have been an easy sell.
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[1] i.e. it could be still under-subscribed even if everyone buys into the vision, growth projections, is comfortable with valuation gets fully onboard including retail.
Even in this best case scenario SpaceX would have to sell at the lower end of the target range or go even lower and still end up being short matter what, because there could simply be not enough money in the market.
I think you have to temper the skepticism a bit though.
SpaceX has dramatically lowered the cost of launching things into space. They are still the leader here. They can put a kg into orbit cheaper than anyone, even heavily subsidized state operations (EU and China).
Their order book continues to be full. Every single launch vehicle they roll off the line was pre-sold years ago, including its re-use flights.
I agree that Elon is their biggest potential problem and a big risk but their launch business is sound and wildly successful. If you believe access to space will be a growing segment of the economy in the future it isn't exactly a bad investment.
I remember all the people putting Tesla down when they IPO'd. I bought $4k of stock (all I could afford at that time). Sold $100k of it a few years ago, still have the other half worth near $220k. Their numbers at IPO time were garbage and it wasn't clear they would even survive. Then they started shipping hundreds of thousands then a million cars.
YMMV, consider all sides and make your own judgement. Just be careful about trusting the anti-SpaceX case. Even if everyone is technically correct about them it can still be a huge miss not to invest! The future is not static and if they can put the raised capital to productive use the IPO could end up being a fantastic deal. And FWIW I also agree the largest immediate risk is they are over-valued. Only time will tell on that front.
Tesla IPO'd at 1.7B and is worth 1.4T today. Giving you the benefit of doubt since it would be closer to a 1000x gain rather than the 100x gain that you didn't buy right at IPO, I will point out that there's a world's difference buying in at 1.7B, because there's still room for the stock to 1000x, but there's not much gain to be had buying in at 1.7T valuation.
Even the most highly company in the world Nvidia is less than 3x that valuation, so it's not a good comparison with Tesla's IPO.
In 2024 66% of their launches were for Starlink. So it’s not quite correct to suggest there’s a vibrant external market for their product, a lot of it is sort of self dealing.
> it’s not quite correct to suggest there’s a vibrant external market for their product
There is a very large demand for launch services. SpaceX balances launching customers and launching Starlink. It's not like they give every launch slot to customers and then launches Starlink whenever there's an opening they couldn't fill.
This is missing the point of their valuation. SpaceX will internally use their launch capabilities to build industries that no one else can. Starlink is already their main revenue stream. Starship will open up new realms of possibilities.
At current launch numbers it may not be worth 1.5+ trillion but valuations aren't about current, they're about discounted future cash flows.
It seems logical that there could/will be far more demand for launch if the price were lower. Prices are quite extreme currently, a standard 3U cubesat (loaf of bread size) is $300k and that's just for orbit.
There could be lots of startups that want to try robotic space mining but launch costs just make that mostly impossible currently so there are only a select few. It's like valuing the Dutch East India company based on the trade volumes in 1603. Of course people are not going to be buying much pepper or nutmeg if it costs them weeks of labor, but build lots of reusable ships, and with each voyage, more people can afford your pepper and nutmeg until it's a common household item.
discounted future cash flows is discounted by risk. There is a lot of risk on growing future revenue is the point.
>seems logical that there could/will be far more demand for launch if the price were lower.
This thesis hasn't played out much in the 10 years since Falcon landed in first 2015.
The non Starlink component of revenue has not massively grown beyond what size the market in 2015 to today. SpaceX isn't lowering launch price to induce demand beyond out being the cheapest just by enough, they would be going lower if cost was the only barrier for more revenue.
It not that businesses aren't possible there at lower launch prices. Starlink is testament that it is.
The problem is that rest of the world is not able to innovate fast enough to take advantage of it even after 10 years. The industry struggles with things like manufacturing satellites at scale or raising money for it, or executing on innovation etc.
What that means for SpaceX is that even if launch costs are cheaper than now, the launch market simply may not grow quick enough for the valuation number to make sense. They would need to enter a lot of new markets directly and be their own launch customer beyond Starlink. This comes with its own set of execution, regulatory and other risks. The data-center[1] in space play is an attempt to do this.
Either DC play or something else, they will need to find and sustain a large business to grow, maybe they will, maybe not.
It is not very clear now and that is a lot of risk so any future cash flow projection has to be discounted heavily.
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[1] I am not qualified to comment on the technical feasibility, however to analyze the company finances that is not needed, it is just one more risk factor, depending on how you feel you can assign 0 or 1 or anything in between.
> This thesis hasn't played out much in the 10 years since Falcon landed in first 2015.
It did play out: there are many more launches today, it's 5x in 20 years. The 75% of SpaceX starlink launches (which account for nearly 50% of all launches) were quietly financed by their other launch customers, exactly because the real cost to launch dropped so much.
That doesn't mean you're wrong, but you do seem to forget that SpaceX, as its own customer, knows the number of launches is going to rise exponentially. They obviously choose to manufacture for where the market _will be_, while you don't see the market before its there. Which is good for them.
I think you have to temper the glazing a bit though.
These people and their endeavors are thoroughly, irredeemably corrupt. It’s nice you got a taste, but their impact on society has been calamitous, and will take decades to recover (if at all).
>There is a good chance this one becomes the Wework of this decade.
It's very different from WeWork which was basically just subletting office space with beer taps. At least SpaceX had done significant stuff with the rockets and Starlink.
The comparison was not about the strength of the business, it was about how the attempt to IPO and the original S-1 was the trigger for more realistic price discovery for Wework
My comment was that it is possible that by trying/becoming public SpaceX also will go through that same
process once their numbers become available.
They aren't reporting anything yet. What we hearing is just from news media who get their leaks/info from investors who get some form of IR reports/ presentation.
Both will do public reporting only when they IPO[4] and have regulatory requirement to do so every quarter.
For private companies[1] reporting to investors there are no fixed rules really[3]
Even for public companies, there is fair amount of leeway on how GAAP[2]expects recognize revenue. The two ways you highlight is how you account for GMV- Gross Merchandise Value.
The operating margin becomes very less so multiples on absolute revenue gets impacted when you consider GMV as revenue.
For example if you consider GMV in revenue then AMZN only trades at ~3x ($2.25T/$~800B )to say MSFT($2.75T/$300B) and GOOG ($3.4T/$400B) who both trade at 9x their revenue.
While roughly similar in maturity, size, growth potential and even large overlap of directly competing businesses, there is huge (3x / 9x) difference because AMZN's number includes with GMV in retail that GOOG and MSFT do not have in same size in theirs.
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[1] There are still a lot of rules reporting to IRS and other government entities, but that information we (and news media) get is from investors not leaks from government reporting - which would be typically be private and illegal to disclose to public.
[2] And the Big 4 who sign off on the audit for companies prefer to account for it.
[3] As long as it is not explicit fraud or cooking the books, i.e. they are transparent about their methods.
[4] Strictly this would be covered in the prospectus(S-1) few weeks before going public and that is first real look we get into the details.
Does the GAAP accounting matter if everyone passively buys shares due to the new fast entry rules, which corruptly will force us all to buy into these companies? The fundamentals and true value seem less relevant than ever:
For other readers, I want to add some context here. NASDAQ is pondering whether or not to change their NASDAQ 100 index membership rules for IPOs. Currently, there is a three month waiting rule for IPOs. They are proposing (not sure if passed/agree/completed yet) to remove this waiting rule for IPOs.
Real question: What is the real impact of this rule change? To me, it seems so minor. Three months is just a blip in time for any long term investor.
> which corruptly will force us all to buy into these companies
Why is this "corrupt"? That term makes no sense here.
Also, if you don't like the NASDAQ 100 rules, then you don't have to invest in securities that track it. You can trade the basket yourself minus the names that you don't like.
Finally, I would say that S&P 500 index is far more important than NASDAQ 100. To join the S&P 500 index, the name must be profitable for the most recent year. (four quarters). Recall that Uber IPO'd in 2019, but was not profitable until 2023. OpenAI probably will not be profitable when it goes public; thus, it will not join the S&P 500 immediately.
I think the bigger story is SpaceX. It will likely IPO very close to a 1T USD market cap (with a small float: ~10%). And, thanks to StarLink, I assume that SpaceX is now wildly profitable.
The "corruption" allegation is that for, yes, SpaceX, index funds will effectively be "forced" to buy in right away at their IPO price, rather than seeing where they settle before getting the money in. Given that most people have most of their money in index funds, it's sort-of an automatic buy and raises some hackles about a fixed game.
Saying "you can trade the basket yourself minus the names you don't like" is not a real counterargument. Most of us are not going to do that, I'm not going to do that and I'm writing this post right now. John Doe is certainly not doing that.
> Also, if you don't like the NASDAQ 100 rules, then you don't have to invest in securities that track it.
Isn't the idea with the indexes that they allow you to intentionally not take an activist position in the market? The exposure is not tied to any underlying market hypothesis. In other words, if we make people form a market hypothesis in order to decide whether or not to hold this index, it has failed in its purpose.
Diluting the index entry rules, only devalues the index utility. When it becomes a bigger problem, other indices with higher quality controls will out compete the current ones and be used by asset managers seeking safety.
More likely than not, most of us are already holding stock in these companies one way or another. All the Mag 7 hold a major chunk of OAI and Anthropic stock anyway, slower entry does not make it less risky for us.
Even if the big tech companies did not hold any stock, they are still the biggest vendors and their own order books is hugely impacted by the AI demand from these two ( and others in this space), either way we are all in this together.
> When it becomes a bigger problem, other indices with higher quality controls will out compete the current ones and be used by asset managers seeking safety
I personally find this is the correct solution, since indexes are over-inflated either way, this brings much needed sanity to the index. Your index is now worth much more or much less based on how you view the AI bubble and you are forced to understand and correct your forward looking investments accordingly.
Passive investments are good, but if taken too far as they clearly have been in the last decade they become a scam. Everyone is SIPing into it, and there is infinite liquidity. Until one big whale finally decides they are booking it, then all hell will break loose on the same damn day.
You can just choose not to play the accounting game, and only choose the ones that actually gaap viable as investment opportunities. For example mag7 - tesla are all relatively cheap when they dip.
Some times the best play is just not to play. If you think they are too risky, walk away. There are enough good oppotunities
> mag7 (minus) tesla are all relatively cheap when they dip
I asked ChatGPT for a list of Magnificent 7 stocks and their most recent price to earnings (PE) ratios.
Company Ticker P/E Ratio
Apple Inc. AAPL ~33
Microsoft Corporation MSFT ~25
Alphabet Inc. GOOGL ~29
Amazon.com Inc. AMZN ~30
NVIDIA Corporation NVDA ~38
Meta Platforms Inc. META ~28
Tesla Inc. TSLA ~378
In the last 50 years, I think the median PE ratio for S&P 500 index is about 15. Seven and below is considered rock bottom, and 30 and above is very high. These PE ratios look pretty damn high to me.
How much do these names need to "dip" for you to consider them cheap?
There are a few things to consider if you are in the investment space:
- Growth rate: you can't compare them to the average single digit growth companies or dividend focused companies. Most of these tech companies revenue are still growing at double digit with good moat. Pe is a good measure but it's not absolute. If you believe they sustain their growth then it's a good bet. And you can choose not to buy in their growth stories too. At the end of the day investment is about judgement call
- History benchmark: some of their pe is at historical low. So they are actually cheaper than before.
- Pe ttm and forward pe: how much pe ttm are they at? how much forward pe are they projecting? If forward pe is significantly lower, that means the current analysts consensus is that they will grow in future
- Pe is the a number but it's not everything. You need to consider multiple things to decide if that's undervalued for you. It's highly subjective as different interpretations are common.
- This post is about if you want to play the gaap game with private tech companies. My point is that there are still many public companies that are cheap at certain point. You just need to be patient and be willing to research and wait. For example, meta at around 500 was a buy for me, but since then it has rebounded it's still good but not as undervalued as a few days ago
They aren't reporting anything yet. What we hearing is just from news media who get their leaks/info from investors who get some form of IR reports/ presentation.
The $24b figure is literally in OpenAI's announcement.
The $19b ARR and $6b added in Feb came directly from Anthropic CEO recently.
> The $24b figure is literally in OpenAI's announcement.
And? That's not a legislated report; they can use whatever mechanism they want to, without disclosure, to produce numbers.
Lets wait until they are regulated as a public company, then their mechanism has to be both aligned with what legislation requires as well as clearly documented in their report.
> they can use whatever mechanism they want to, without disclosure, to produce numbers.
That would be fraud against whoever participated in this round, so no. Just because they aren't regulated doesn't mean they are literally free to do whatever they want to close the round.
The fact that in all the rounds I have been involved in all public announcements related to the round go through the legal team to check for possible material misstatements that could cause exactly this kind of problem.
I am reminded of the "I declare bankruptcy" meme from the 2000's TV series Office.
When we say reporting it means there are statutory submissions with an auditor signing off, with legal liability. As the other reply referenced consequences for doing this incorrectly can be severe - Arthur Anderson is no more after all because of Enron.
A Press Release (of a private entity) does not have to satisfy this high bar.
Press release does mean no constraints, for public companies, disclosure of important information by officers and other insiders have strong controls. Even if its the just a rocket/poop emoji on a casual social media platform. Lawyers have to refile with the SEC in the expected format. Even private companies have restrictions on not claiming things fraudulently to investors, but these are accredited investors with lesser controls than retail.
Not employees are hired though, a fair amount are added through acquisitions. Reducing staff could be just streamlining redundancies .
Not the case here [1], but it not always bad planning.
Even without acquisitions, business conditions can change rapidly things like tariffs, interest rates , war or competition due to newer tools etc , as an investor you can would want leadership to move fast and course correct, rather than be held by the sunk cost fallacy.
All else being equal, the way investors would see a change like this - is now the company is no longer wasting 7.5B/yr in the future and their current cost was already priced in.
However all else is rarely the same, there could be other factors, like slowing sales growth projections which can bring down the multiples .
Oracle is still trading at 28x P/E historically they typically traded at 15x, given the growth and risk profile a more realistic number .
Since 2022 (ignoring 2020 spikes) the number has been going up are basis the expectation that their cloud business will really benefit from AI significantly.
If the market no longer has the confidence —- it has already cooled a bit since October then stock will keep dropping, layoffs will only slow it down a bit .
The timing is critical, because leverage/sale of Oracle stock is how the Warner Bros Discover acquisition is being funded .
The increasing doubts about that financial viability is why that stock risk premium is increasing on Warner .- Currently trading at 27 although acquisition price is 31 and it was trading at 29 a month back . Also senior executives like Zaslav are selling now at 27 which they less likely to if they believed deal will close at 31 soon.
TLDR; this 30k layoff is an attempt to strengthen/save the other acquisition Oracle is indirectly financing.
[1] although the Cerner acquisition added 30k employees to Oracle 3 years back. This doesn’t seem related to that. Oracle did not have a strong overlapping BU, there were/are some redundancies as in any acquisition but certainly not 30k
In the context of knowledge workers, It is really about Claude Cowork against Microsoft Copilot suite for all their applications, which is what the OP is referencing ?
Github Copilot can use Claude APIs and has its own problems and challenges.
Microsoft AI performance is primarily not being affected by Github - while significant is much much smaller part of the enterprise revenue stream and their DAU compared to their Office suite apps.
Same for their PR exposure. It is lot more likely to here about Copilot in the office context than Github outside of small niche's like this forum.
First I thought they were AWS lambda functions, perhaps possible if they are over-provisioned for very concurrency or something similar $25k/month is in realm of possibility.
But no, the the post is talking about just RPC calls on k8s pods running docker images, for saving $300k/year, their compute bill should be well above $100M/year.
Perhaps if it was Google scale of events for billions of users daily, paired with the poorest/inefficient processing engine, using zero caching layer and very badly written rules, maybe it is possible.
Feels like it is just an SEO article designed to catch reader's attention.
Perhaps not, However Gamification of fitness is huge motivation for many people to keep exercising and maintaining the rhythm which in fitness is quite important.
Such social sharing + gamification systems are no different than Github contribution streak or StackOverflow awards for streaks etc. Those streak award only benefited the platform, while awarding us fake points and badges, the fitness streak rewards and social sharing benefits the users health so arguably has a stronger case for being gamified.
We can argue all day that people should want to do fitness to be healthy, not on how they look or other people see them or their fitness, but reality is that the social component of fitness is a big part for many people be it at the gym or in an app.
Logging is one thing, syncing it to the cloud is unnecessary and shouldn’t even be the default; making any of the location data available publicly is just terrible. If you want to share an individual workout map so you can say you circumnavigated Manhattan or whatever, fine! Share that one workout with your friends! (And ideally as a freaking screenshot rather than some database) Anything else is far too risky.
It doesn't need to be anything nearly that dramatic as assassins, because economies of scale both lower the bar and make most attacks impersonal. Consider how odd it would be for someone in 2025 to say: "Computer security?I haven't done anything to personally offend a genius hacker."
Imagine this data going to a burglar, who has a digital dashboard of nearby one-person properties and when the owner is likely to be out, able to act with confidence they can leave before the victim could return.
Sure, sophisticated international hitmen won't have any interest in catching you in ambush... but that doesn't make you safe from a local rapist of opportunity.
They are. A related example is criminal gangs tageting gun owners in France after the dataleak at the sport shooting federation. This one has been well covered. There have been a few hundred targeted robberies (on old people mostly) and one or two deaths (predictably).
In Western Europe there are also foreign burglar gangs that go on sprees for a few weeks. They're well organised but don't have time to do the stalking. They use publicly available data as much as they can.
do you have any evidence to back your claim? gangs employing teams of underage burglars assisted by risk averse adults with skills for entry and targeting are a thing. everyone has a mobile phone.
> Most of us aren't being pursued by stalkers or assassins.
Most of us, but for those that are...
However, in the world we live in today, the various LEOs are using this type of data to find people they do not like. It's getting to the point that I pine for the days of good ol' 1985 where you could just be another anonymous person in public with no tracking of your every move.
To be fair it is not the city/elected officials who wants to retain the parking lots. The downtown redevelopment would probably make the city a lot of money.
It is the businesses around downtown who are pushing the save downtown campaign. I imagine the businesses contribute a fair chunk of revenue to the city now and have some influence .
Relative to say parts of Redwood City, or Palo Alto. Menlo park has a fair amount of student-ish 4 Unit lots, so it not all zoned SFU.
TBF a lot of the complaints are coming from businesses that are _probably_ renting. There is absolutely the chance that their business will go under due to construction disruptions before they can benefit from the increased foot traffic once the development is complete.
And, of course, once the development is complete, and the value of their land goes up, so too does their rent....
Menlo Park today has free and ample parking downtown. RWC is paid parking anywhere within few blocks of downtown, all the garages are paid, the garage on Jefferson Av charges more on Sundays. Same thing in San Mateo downtown.
Size of one heart has restrictions that are determined by diminishing return of physics. That doesn't mean engineering a larger system is impossible or even that very difficult. Same as any other pump system. i.e. there is no reason not to have 2 or 10 hearts.
We do this to move any fluid like water or concrete up to steep terrain or maintain pressure in everything from sewage to oil or gas pipes over long enough distribution systems.
Romanticizing in popular culture not withstanding, heart is just a pump[2] and today can be replaced by (albeit for short duration) entirely by a machine or replaced in a transplant.
We are not talking about say the brain or the central nervous systems[1]. That would be like going to multi-master from single node - lot more fundamental complex rebuild and rethink of the core architecture.
[1]We are not even remotely close to fully understanding let alone attempting to replace.
[2 Amazingly well designed, very efficient, something today we probably could not (yet) build synthetically with similar reliability and durability but it is still a pump nonetheless.
> We are not talking about say the brain or the central nervous systems. That would be like going to multi-master from single node - lot more fundamental complex rebuild and rethink of the core architecture.
The central nervous system already is “multi-core”, with tiny logic handling such things as the patellar reflex. https://en.wikipedia.org/wiki/Patellar_reflex#Mechanism: “This produces a signal which travels back to the spinal cord and synapses (without interneurons) at the level of L3 or L4 in the spinal cord, completely independent of higher centres”
SpaceX are widely reported to be planning to raise $75Billion in new capital. It may seem small a % for the valuation target. However that is about 3 times previous highest raise of $29B when Saudi Aramco went public few years back. The market simply may not be that deep[1]
There is a good chance this one becomes the Wework of this decade. The valuation, amount being raised, cooling interests in AI, and middle eastern capital changing priorities, interest rate outlook for the rest of the decade. These are all strong head winds to overcome even when not raising the largest ever amount in an IPO.
That is not say that it is destined to fail, Elon is excellent salesman of vision when fundamentals are weak, There is no better proof than Tesla P/E .
It is by no means clear this would be successful or not. The valuation, funds being raised, future growth potential are all not based on just SpaceX core businesses which would have been an easy sell.
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[1] i.e. it could be still under-subscribed even if everyone buys into the vision, growth projections, is comfortable with valuation gets fully onboard including retail.
Even in this best case scenario SpaceX would have to sell at the lower end of the target range or go even lower and still end up being short matter what, because there could simply be not enough money in the market.
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