Deep Value Investing
Value Investor, Long-Term Compounding
SpaceX is not making money, yet it is borrowing to buy Nvidia chips while relying on government money. It is looking to raise $40B of debt for AI compute, per @StockSavvyShay, and its CEO stands to receive an enormous compensation package from shareholders for work funded by taxpayers. x.com
SpaceX is overvalued and, like Tesla, is selling hope rather than making money. That pushes back on Bill Ackman's view that its high valuation is itself a source of value, making acquisitions such as Cursor cheaper in dilution. Per Jim Cramer, premarket buyers took it through $210 with no sellers of size around. x.com x.com
SpaceX's heavy spending and risk of further borrowing make its sharp stock rally hard to square with weakening debt and a huge lock-up expiration ahead. Bloomberg reports its bonds weakened and credit spreads widened despite earnings above estimates. Talk of a potential Tesla acquisition is also in the air. x.com
SpaceX's revenue ambitions look implausible against current sales and the risk of overbuilding chips. Revenue is $14 billion this quarter, and even the Street's $120 billion forecast for next year looks aggressive. Its costs are within its control, leaving the risk heavily skewed against investors. x.com
SpaceX's compute outlook improves as Anthropic commits more spending and institutions fund its GPU expansion. Anthropic's S-1 lists up to $120.5B in SpaceXAI compute purchases through 2029; Pimco bought $4B of the roughly $40B Apollo-led GPU debt package. The GPU lease is expected to close before year-end and entails about $40B in principal payments, not new shares. Elon Musk says Starlink Mobile will take 2-3 years to build out, versus the 4-6 years estimated by Verizon's CEO. x.com x.com x.com … Show more
Nvidia's cash could have more value invested in AI companies with strong demand but too little capital to scale, especially neoclouds that can execute. Their valuations look very attractive now, making equity stakes preferable to more buybacks or dividends despite criticism of circular deals. SpaceX may need the money less because it is already very big. x.com x.com x.com
SpaceX needs new company equity because the math for its 20 GW plans does not work otherwise. A possible Tesla merger would take too long for its KPIs, even as SpaceX is beating CoreWeave and Cerebras. A huge primary offering by SpaceX, Meta or Alphabet ahead of Anthropic's IPO is considered nearly certain, though the issuer is uncertain. x.com x.com x.com
SpaceX's exclusive use of Nvidia GPUs and other supply constraints make Musk's 13-20 GW operational compute forecast for end-2027 too high. A substantial buildout is still incredibly enticing, but reaching that scale likely requires cheap capacity from struggling neoclouds, mostly through capacity deals and some acquisitions. Its attractive $40B off-balance-sheet GPU lease deal is only a drop in the bucket of the debt needed. Capacity can still grow quickly over time. x.com x.com x.com x.com … Show more
SpaceX's roughly $2T valuation is hard to justify while it burns $10B in cash annually and the market expects it to put hundreds of billions of dollars of chips into space next year. x.com
SpaceX faces near-term selling risk from an insider-share unlock despite a remarkably strong quarter. Tomorrow, 28% of its insider lockup pool, nearly 10% of all shares, becomes eligible for sale. Revenue reached $14.6 billion, up 161%, with $4.4 billion in net profit; $7.6 billion in AI revenue now exceeds Starlink and other connectivity revenue combined. x.com
SpaceX's AI business and profitable growth challenge calls for its stock to go much lower. Q3 revenue reached $14.6B, up 161%, with $4.4B profit and $7.6B from AI. A Tesla merger is being discussed. x.com
SpaceX is a unique company, but its valuation is crazy because its numbers do not match the price it was sold at. Leasing unused compute to Google and Anthropic could be a good business, but it does not justify these levels; below $100 would make sense. x.com x.com x.com
