nextbigtrade
Stage Analysis Trader, Creator of Next Big Trade Premium Newsletter
Jersey Mike's has much bigger potential than SpaceX had because it is IPOing into perhaps the start of a run in restaurant stocks. SpaceX listed at the end of the space theme and then collapsed, and Cerebras listed at the end of the semiconductor run. Few people care about the Jersey Mike's IPO, while everyone knew about SpaceX's, which supports the setup. x.com x.comÂ
Rocket Lab is a better play than the SpaceX IPO, partly because of its lower launch costs. The stock offers a good entry point off its rising 50-day moving average. x.comÂ
Restaurant stocks, including Chipotle and Wingstop, are uninvestable right now, with too many better places for money. Most have slowing growth, rising costs and poor margins. Wingstop's growth and margins look better than most, but it is still not a buy. x.com x.comÂ
Jersey Mike's looks expensive relative to its remaining growth runway, with far cheaper opportunities elsewhere in restaurants, food and consumer. It trades at 25x EBITDA with a maturing store fleet and leverage above 4x, and most of the IPO proceeds go to cashing out its private-equity owner. The chain is no Subway copy; it is a Subway killer, just priced too richly. x.com x.comÂ
Raymond James' $800 price target on SpaceX looks lofty, since it would imply a $10 trillion market cap. x.comÂ
SpaceX shares will probably drop into the $60s after the lockup expires, so now is not the right time to get involved. x.com x.comÂ
Jersey Mike's is a stock to avoid despite good sandwiches. The IPO is mainly insiders selling, the implied valuation is about $8 billion for a company that is not profitable, and most of the balance sheet value is intangibles. As @TMFJaguar notes, that is what has come to be expected from a private-equity IPO. x.com x.comÂ
SpaceX's stock is the most egregious case yet of retail investors being manipulated into serving as exit liquidity for Wall Street. Its fall was expected by everyone, even if the timing was not. x.comÂ
SpaceX shares did not implode when the first lockup period ended, which supports staying bullish and ignoring the media telling investors what to do, though the call could still prove wrong. x.com x.comÂ
SpaceX looks frothy at 229x next-twelve-month EPS, yet many retail investors see no difference between it, Marvell at 45x and Micron at 6x, treating all of them as momentum growth stocks. That is relevant to recent market action in both directions. The businesses deserve different multiples, and Marvell also looks expensive. x.com x.comÂ
Morgan Stanley could quietly build a structural edge in retail IPO distribution that the market has not priced. Per Bloomberg, its E-Trade may be Elon Musk's chosen platform for SpaceX's 30% retail allocation, possibly cutting out Robinhood and SoFi. The direct revenue is small, but the halo should bring sticky new accounts and deposits, and Anduril, Anthropic and OpenAI could follow, letting it underwrite and distribute. It trades at 15x earnings with a 2.5% dividend. x.comÂ
