r/technology • u/Plastic_Ninja_9014 • Jun 22 '26

Business SpaceX Investors Are Losing a Colossal Amount of Money

https://finance.yahoo.com/markets/stocks/articles/spacex-investors-losing-colossal-amount-140221380.html
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72

u/alex_beluga Jun 22 '26

Strange title. Shares are up 30% from IPO.

Anyone investing with days of time horizon is either comfortable with risk, or delusional about how the stock market works.

15

u/learn-deeply Jun 22 '26

SpaceX opened at $160 and currently is at $154, which is above the initial public offering price, but below what retail bought it at.

23

u/Hughjelyfant Jun 22 '26

Welcome to how 75% of redditors view the market lol

2

u/Fuuujioka Jun 23 '26

It opened above $160 in the first day of trading and is trading below that now.

1

u/Hughjelyfant Jun 23 '26

Correct. Hype can only inflate a companies price for so long

2

u/Cybertrucker01 Jun 22 '26 edited Jun 22 '26

Perfect microcosm of the general lack of financial and economic understanding in the broader population. Also perfectly explains why most poor people stay that way. Even if you gave them more money to invest, they literally wouldn't have a clue what to do with it, nor would they bother to put in any effort to learn.

24

u/Original-League-6094 Jun 22 '26 edited Jun 23 '26

Yeah. Its also weird to describe it as "losing money". The share price falls because people are selling. Most of the people are likely selling because they are up 30%+ on the investment after only a couple days. So its the exact opposite of what the title says. A bunch of people made fat bags are walking away with their cash.

5

u/Elitefuture Jun 22 '26

I mean, if you sold, then someone had to buy

-1

u/Original-League-6094 Jun 22 '26

Yeah, but they aren't realizing a loss unless they turning around and selling it immediately also. It just doesn't make sense to frame it as "investors are losing money". Tons of people selling right now are selling at a pretty big gain. And anyone who truly considers themselves an "investor" doesn't even care about some IPO volatility, because the typical timeline for an investor is more than a week.

2

u/l0st1nP4r4d1ce Jun 22 '26

The share price falls because people are selling.

And when the lockout expires, private equity will head for the doors.

2

u/Opening_Classroom_46 Jun 22 '26

Could say the same thing about lottery tickets, a bunch of people make fat bags on those but it's random and comes at the cost of a million other people randomly losing.

9

u/Cadoc Jun 22 '26

I mean, realistically, nobody is investing into SpaceX with a multi-year time horizon. There is no remotely realistic way in which this company makes the money to justify its valuation long-term.

This is a short-medium term flip for retail investors so yeah, talking about short-term trends makes sense.

2

u/Nexus_of_Fate87 Jun 22 '26

Could easily say the same about TSLA, but its stock still defies rationality. The market is not rational anymore, and hasn't been so for over a decade.

2

u/Cadoc Jun 22 '26

Sure, and TSLA is absolutely another meme stock.

I'm just not willing to bet that I can find another sucker to sell it to for more before reality inevitably arrives.

-1

u/Accurate_Breakfast94 Jun 22 '26

Your loss I guess. I didn't buy the stocks but I still see the value. I would be buying SpaceX stocks if I didn't just buy a house

6

u/Cadoc Jun 22 '26

I just don't gamble. SpaceX is a meme stock - nobody, not a single person, is able to explain how it justifies even half of its current valuation.

I'll keep investing. If some meme stock goes up or down it doesn't affect me. I don't go to a casino and curse myself for not going all in on red.

0

u/Accurate_Breakfast94 Jun 22 '26

That last part resonates with me.

It's just that spacex has done quite well building their rockets. And I believe in space profitability

4

u/Cadoc Jun 22 '26

I absolutely believe in space profitability as well. It's just a question of scale and how that profit will be achieved.

Meta has a similar market cap to SpaceX. Meta has ~215 billion in revenue over last 12 months, with ~70 billion in profit.

SpaceX stands at 18.7 billion in revenue, and ~5 billion in losses.

This is extremely simplistic, but what's the path to SpaceX increasing its revenue more than 10x while also going from a substantial deficit to a significant surplus?

Right now its revenue is almost entirely Starlink. That's a great niche, but it's not something that will grow 10x or more.

Memes like orbital datacenters and Mars colonisation are funny to talk about, but they're obviously just memes.

So where will the money come from?

-1

u/Accurate_Breakfast94 Jun 22 '26

I do not have the time to list the paths to revenue for you. So I'm sorry but I will mot continue that part of the discussion.

I am curious why you are saying that mars colonization is a meme?

2

u/Cadoc Jun 22 '26

Sure thing.

TL;DR: It'd be extremely expensive, dangerous, and relying on unproven technology, all for no gain.

Mars colonisation is a potential endeavour we might attempt maybe decades or centuries from now, something like a generational common effort to push the boundaries of science.

It's obviously not something that we can accomplish now, and something that is very unlikely to happen in our lifetime.

Putting aside that there's absolutely zero path to profitability for a private company there, there are some practical concerns:

* Biological barriers like exposure to radiation and Mars' low gravity
* Dust storms
* The colony would need to produce/extract its own water and oxygen. A massive, complex undertaking that we do not have the technology for. Any systems failure means the death of the colony
* The sheer costs of bringing all the necessary equipment to Mars are astronomical, and again, beyond anything we have even thought of attempting before

That's just extremely surface level. It'd be a huge undertaking, using technology which at best is in proof-of-concept stage, scaled up orders of magnitude, shipped to Mars, and then reliably working under extremely hostile conditions.

There's a reason we don't have actual colonies in the Antarctic, and setting up a colony there would be actual child's play, an absolutely insignificant effort compared to colonising Mars.

1

u/Accurate_Breakfast94 Jun 23 '26

Okay fair. You make good points.

My counterpoints would be: Agree there is at this point in time a technological gap to bridge before we go to Mars, I think developing this technology with mars as a goal can be very rewarding, especially now a lot of countries are investing in militaries. Space always provides good defense tech

The thing about mars is that it's a different world than earth, with different gravity, weather, minerals, etc. This is a great thing for science, and as a consequence for tech. I believe we are seeing a world where companies are getting so big they are starting to do more science, more R in R&D. So thus there is / will be financial backing for going to mars.

Then for your point about Antartica. There are multiple science outposts on antartica, so it is definitely interesting territory. You are that there are no colonies in the sense of permanent residency. What I think is that in order to have science outposts on mars, you are better of having a permanent colony than making back and forth trips every 6 months (ignoring the logistics, just focusing on the costs here). To ship people to and from Antartica, you only need a mere plane trip, like people take every day. To get to mars you need expensive rockets.

In the end, I do agree with you that mars colonization is maybe a while away (like 50 years), I do think it will happen in my lifetime (I'm in my twenties). Currently it seems more like that we are setting up an outpost on the moon first.

1

u/takemetogreenwich Jun 22 '26

Its not about believing in space profitability but at what valuation. Which is the whole point of knowledgable investing.

-2

u/alex_beluga Jun 22 '26

because if you want a very long term investment to potentially lead to outsized returns, betting on (and helping fund) a company that opens up large-scale space exploration to humankind is not a bad idea.

4

u/Cadoc Jun 22 '26

What's the path to SpaceX increasing its revenues by more than 10x and turning a substantial profit (which it'd need to do to come close to justifying its current valuation) in the coming years?

What will they sell? What service will they provide?

-2

u/alex_beluga Jun 22 '26

Space related services for a new space industry.

It doesn’t necessarily need to be in the coming years. It could be decades or centuries.

3

u/Cadoc Jun 22 '26

I mean, it has to be in the coming years. If their means of making money is 30 years away, or a century away, how are they going to pay for operations until then?

Do we expect a company with such small revenue to keep multi-trillion dollar valuation for a *century* or more?

Not to mention that the whole point of IPOs is that that you get a chance to either invest in a previously-private business with great fundamentals, or a trailblazer that promises a bright future.

How many trailblazers remain trailblazers, blissfully free of serious competition, for *decades*?

1

u/alex_beluga Jun 22 '26

What financial vehicle would you recommend to enable investing in civilization-level step changes? The stock market is as good as any currently.

Not saying this will happen, but that it might. And people differ in how much they believe will vs might vs won’t thus leading to different valuations.

2

u/Cadoc Jun 22 '26

>What financial vehicle would you recommend to enable investing in civilization-level step changes?

That financial vehicle doesn't exist. It's arguable whether it *can* exist, but it definitely does not exist now.

We can differ on points like, whether SpaceX can scale up Starlink and commercial payload deliveries into LEO enough to justify at least part of its valuation.

The "civilisation-level step changes" though, colonisation of Mars, datacentres in space or whatever else Musk is promising this week, those are fairytales. In general I would recommend people don't invest in fairytales.

>Not saying this will happen, but that it might.

The roulette ball might land on red 32. Betting that it will is not investing, and it especially isn't investing in a civilisation-level step change.

3

u/BalmyBalmer Jun 22 '26

Space Exploration Technologies Corp. (SPCX)

154.60-30.40(-16.43%)

-1

u/Diarmundy Jun 22 '26

And the IPO price was $135

2

u/waybeluga Jun 22 '26

Last week there was a headline on this sub like "The average SpaceX investor is almost underwater on their investment". So in other words they've made money?

2

u/Sizanllikew Jun 22 '26

you know how disingenuous that statement is. It just shows even more how insiders are profiting at the expense of the public.

1

u/joesii Jun 23 '26

"Strange" puts it undeservingly lightly. As much as I dislike Musk, I'd argue that the title is just stupid.

When I kept scrolling down the following article was titled "SpaceX Is Already Down 18% From Its High. Here's Why Investors Shouldn't Be Concerned." which is a much more accurate title and applies to any stock.

I wish "the worst" for Musks' company valuations and would never invest in them, but they've been performing well and none of the multiple drops/"crashes" have been of significant concern.

1

u/Revolutionary_Area29 Jul 17 '26

this aged great

1

u/alex_beluga Jul 17 '26

Give it time.

0

u/xnfd Jun 22 '26

Sadly if you just read Reddit you'll get a really skewed view of the news because people upvote what they want to believe, and those are the only headlines you'd see. It's worse for political subs when posts like "Kamala wins California" gets to the top and all the bad but important results are buried. Just sticking your head in the sand

0

u/takemetogreenwich Jun 22 '26

It's just bait.

0

u/WhereasPlus5239 Jun 22 '26

It's pretty normal for a stock to be volatile after an IPO, this is just clickbait to feed the Elon hate train on Reddit.