Worlds Apart: SpaceX IPO
A cultural and economic story of the SpaceX IPO. Asimov on shrooms, employee millionaires, and galactic capitalism gone wild.
The SpaceX prospectus reads not like a normcore financial disclosure but more like speculative fiction entirely disconnected from material constraints, penned by Isaac Asimov on shrooms and a gulp of Nitro cold brew. It opens with a wide range of mind-bending schematics of satellites, futuristic orbital compute clusters and cool Kardashev scale visuals. "Our mission is to build the systems and technologies necessary to make life multiplanetary, to understand the true nature of the universe, and to extend the light of consciousness to the stars," states the filing. Wow!
In a populist age of rage and brainrot maxxing, many people will see the concentration of power in trillion-dollar companies — not to mention trillion-dollar men — as a failure of capitalism and an unfair manifestation of avarice and greed. Yet as a story of risk-taking, competition, the ability to mobilize scarce resources and thereby turn the theoretical into the actual, SpaceX is in fact capitalism at its most remarkable. It also demonstrates that Elon Musk, the modern version of Tesla (or Edison) and arch-capitalist empire builder, is just plain fu^king awesome. He is also full of benevolence, galactic goodness and otherworldly erudition.
SpaceX could, like any capitalist enterprise, crash and burn. Its valuation, as much as 100 times annual revenue, compares with 16 for Tesla and 21 for Nvidia. Elon has a solid track record of creating lots of shareholder value but little cash. SpaceX is on the hook for the lossmaking xAI, and his social network, X, which generates not a lot of dosh. But with Elon the whole is always greater than the sum of the parts. The vibes are literally astronomical and the underlying engineering pioneered by SpaceX is ingenious. The momentum is contagious.
And then there's this: An estimated 4,000 SpaceX employees hold equity as part of their compensation, from senior engineers to Starbase cafeteria staff and the non-technical staff at the Starbase facility in Brownsville, Texas, one of the poorest cities in the US. Countless investors, including the cafe workers, day laborers and junior engineers at the rocketry company, will be newly minted millionaires by Friday night (lockups apply). Student loans, gone. Mortgages, manageable. That's not a talking point. That's capitalism doing something rarely awesome: spreading the upside all the way down.
Strabase: Watching the future take off.
Buy, sell or hold? SPCX opens at $135 this morning. All things equal, the stock will pop up to $210 then retrace to a lower level, then drift upward, then form sinusoids, then meander stochastically. Expect insane volatility over the next month — up, down and all around. Buyers of the stock are investing in a cult leader with oodles of charisma and relentless progenitor of creative destruction. It's a solid risk-reward undertaking.
SpaceX's $75B IPO dwarfs every capital raise in history. Source: Anarchy Daily.
Scale: SpaceX raised $75 billion at $1.77 trillion valuation, more than triple Saudi Aramco's 2019 record, and more than three times Alibaba's $21.8 billion offering in 2014, which had long been the benchmark for tech IPOs. It dwarfs Meta, Visa, and every locomotive of capital that came before it.
Elon claims a potential total addressable market (TAM) of $28.5 trillion, a sum larger than the entire annual economic output of America. That’s next-level! To defend this lofty valuation, the company provides a long list of super-cool value propositions: long-haul point-to-point travel, which involves launching precious earthlings and cargo into deep space; reusable rockets, harvesting terabits of sustainable solar energy; Martian colonies and terraforming the dark side of the moon. And the first stirrings of an ambitious interplanetary species. Hot damn. Unlike typical IPOs funneling 90% to institutions, up to 30% goes direct to retail. Robinhood, SoFi, Fidelity lowered bars. Index fund holders might own a slice of Mars anyway.
Brainrot maxxing or not, this IPO is $€X¥. And so is Elon. Caveat emptor.
