Investor Gary Black said on Thursday that he is not eager to buy into SpaceX's expected initial public offering, arguing that the Elon Musk-led rocket and satellite company appears too expensive at a valuation that may approach $1.75 trillion.
Black Questions SpaceX's IPO Valuation
"Not that interested in $SPCX," Black, managing partner at The Future Fund LLC, wrote on X. "I don't know of any $2T market cap companies that trade at 300x EBiTDA. Given all the hype, likely to be way overpriced. Will be more interested after it falls by 50%."
Black criticized the premium embedded in the expected IPO valuation, saying investors who buy a company at about 300 times EBITDA leave little room for fundamental upside at the listing price.
Retail Investors Get Caution On IPO
A prominent voice among Tesla Inc. (NASDAQ:TSLA) investors, Black had earlier warned retail investors not to sell Tesla shares to chase SpaceX's IPO. He argued the deal would likely be massively oversubscribed, meaning small investors asking for 100 shares could receive only a few, leaving them with a worse portfolio trade.
He also cautioned investors to treat bullish sell-side research carefully. A former sell-side analyst, Black in March, said analysts often earn compensation through transaction commissions and underwriting ties rather than the eventual stock performance. He described the SpaceX listing as potentially the "biggest payday for TSLA analysts in years."
Bulls And Skeptics Split On SpaceX
Other valuation experts have raised similar concerns. Aswath Damodaran of New York University valued SpaceX at about $1.22 trillion, roughly one-third below the expected IPO pricing, while still calling the company extraordinary.
SpaceX's filing showed both scale and strain. The company generated $18.67 billion in revenue in 2025 and $6.58 billion in adjusted EBITDA. Reuters reported that the space venture lost $4.28 billion in the first quarter of 2026, with its AI division accounting for $2.47 billion of the losses.
Patrick Boyle, a former hedge fund manager, called SpaceX a "money furnace" after the filing on Wednesday. Still, growth bulls remain. Cathie Wood’s ARK Invest has estimated that SpaceX could reach about $2.5 trillion in enterprise value by 2030, citing Starlink's satellite internet business and Starship's heavy-lift launch potential.
Photo Courtesy: Walter Cicchetti on Shutterstock.com
Login to comment