Investor Gary Black of The Future Fund LLC has said that SpaceX investors could initially benefit following the IPO, as expedited inclusion in the Nasdaq-100 and S&P 500 indices could provide a boost.
Gary Black On SpaceX IPO
In a post on X on Saturday, the investor said he considered SpaceX “overpriced at $2T valuation,” citing the company’s earnings of $6.6 billion and revenue of $18.7 billion.
However, the investor acknowledged factors that could “engineer a first day IPO pop for investors who are allocated shares,” like a faster listing on the indices, as well as the “distribution power” offered by Goldman Sachs Group Inc. (NYSE:GS) and Morgan Stanley (NYSE:MS) as the lead underwriters. “The relatively low % float to be issued in the SPCX IPO (4%),” could also provide a boost, Black said.
Valuation Concerns
In a separate post on X, Black shared his concerns with SpaceX’s valuation. “I don't know of a single company with a $2T market cap that doesn't make money,” he said, also slamming the company’s 300x EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). “That should give potential $SPCX investors pause,” he said.
SpaceX IPO
The comments come as SpaceX’s IPO could also potentially be detrimental for Tesla Inc. (NASDAQ:TSLA) investors, as experts suggest the listing could take investments, as well as CEO Elon Musk‘s attention away from the EV giant.
On the other hand, some investors suggest the companies should merge. Dan Ives, who is the managing director of Wedbush Securities and a Tesla bull, has advocated for a merger between the two, most recently predicting that there was an 80% chance that the two companies would merge.
However, Black has been against the idea of Tesla merging with SpaceX, sharing concerns that the deal could lead to Tesla’s value being reduced by 25%.
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