By HIBIKI, CryptoCity
The highly anticipated SpaceX Initial Public Offering (IPO) is set to launch tonight, Taiwan time, igniting an unprecedented wave of investor enthusiasm. Driven by the formidable “Musk effect” and SpaceX’s strategic decision to allocate up to 30% of its shares to retail investors, the offering has captivated a broad audience.
However, beneath the surface of widespread market optimism, a chorus of experts and veteran investors are sounding alarms, expressing significant concerns about SpaceX’s ambitious valuation and inherent financial risks.
Renowned Short-Seller Jim Chanos Casts Doubt on SpaceX’s Valuation
According to Reuters, Jim Chanos, the astute founder of Kynikos Associates, a prominent short-selling firm, has sharply criticized the SpaceX IPO frenzy. Chanos asserts that the excitement is “entirely built on dreams and hopes” and fundamentally unsustainable for its colossal valuation, reportedly reaching up to $1.75 trillion. He firmly believes that “based on any reasonable assumptions for the next five years, the company is not worth this price.”
Chanos further highlighted a striking disparity: SpaceX’s current valuation stands at a staggering 90 times its revenue, a multiple significantly higher than Tesla’s 14 times revenue. This, he argues, points to a clear overvaluation.
He contends that “in a bull market, investors often grant a premium for corporate promises, while realistic financial fundamentals are severely overlooked.” Chanos, famously known for accurately predicting the downfall of Enron, has earned monikers such as “Wall Street’s Darth Vader,” a “catastrophe capitalist,” and “the LeBron James of short-selling.” Last year, he notably shorted MicroStrategy stock while simultaneously holding a long position in Bitcoin, demonstrating his nuanced approach to market plays.
“The Big Short” Investor Steve Eisman Joins the Skeptics
Jim Chanos is not alone in his skepticism. Steve Eisman, the celebrated investor who famously foresaw the 2008 financial crisis and was immortalized in Michael Lewis’s book “The Big Short,” also harbors significant doubts about the SpaceX IPO fervor.
Eisman bluntly described SpaceX’s current valuation as “quite foolish,” suggesting that investor expectations are merely a reflection of blind optimism towards the company.
A core underlying concern for SpaceX, Eisman points out, is its escalating capital intensity. While capital expenditure represented 42% of revenue in fiscal year 2023, this figure alarmingly surged to 215% of revenue in the most recent first quarter.
Consequently, Eisman warns that SpaceX’s future growth projections are disproportionately reliant on the burgeoning AI sector. The company is making colossal investments in computing power and data centers, a strategic shift that, in his view, “has crossed the scope of a mere aerospace and communications enterprise, transforming into a technology company facing a costly AI infrastructure race.”
- Related Report: SpaceX IPO worth buying? Independent agency gives target price of $63, far below the $135 issue price
Unprecedented Institutional and Retail Demand Surges
Despite the cautionary voices, demand for SpaceX shares has reached astonishing levels. According to The Wall Street Journal, informed sources reveal that asset management behemoth BlackRock has submitted an order to acquire at least $5 billion worth of SpaceX stock, with other major asset management firms placing equally eye-watering subscription orders.
While substantial institutional participation is typical for IPOs, orders of this magnitude are several times larger than those seen in conventional offerings.
SpaceX confirmed on Thursday afternoon that all its IPO shares were successfully sold at $135 per share, cementing its valuation at approximately $1.77 trillion.
Sources further indicated that retail investors alone demanded to purchase over $70 billion worth of shares. The offering also attracted significant interest from global sovereign wealth funds and family offices, including a single family office reportedly requesting to subscribe for over $1 billion.
Will the SpaceX IPO Disrupt the Bull Market?
This historic IPO, the largest ever, had initially raised concerns among analysts about potentially draining market liquidity, even impacting the cryptocurrency sector. However, Wall Street analysts largely believe the stock market possesses the capacity to absorb this massive offering without derailing the current bull market.
Gavekal Research noted that S&P index component companies issued approximately $1.7 trillion in stocks during the 12 months ending September 2025. In this context, the $75 billion SpaceX aims to raise is considered “relatively easy to digest within the overall scale of the US stock market.”
Yet, data from Truist Wealth offers a sobering perspective: among the 30 largest IPOs over the past 15 years, the median stock price of newly listed companies declined by 9% within one year of their debut. Furthermore, recent NASDAQ rule changes will accelerate the inclusion of new listings like SpaceX into indices, potentially amplifying volatility as passive funds aggressively chase these stocks.
Jay Woods, Chief Market Strategist at Freedom Capital Markets, voiced concerns that this scenario could expose many retail investors to significant loss risks. He strongly urges the public to perceive SpaceX as a long-term investment requiring patience for growth, cautioning against a speculative, “lottery ticket” mentality.
(The above content is an excerpt and reproduction authorized by partner “CryptoCity”, original link)
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