The recent surge in Space Exploration Technologies Corp. (NASDAQ:SPCX) shares is more a testament to Elon Musk‘s transformative business acumen than the company’s current earnings, says CNBC’s Jim Cramer.
Cramer opined that the company, potentially facing losses for years to come, does not warrant such a high valuation on its own. “The stock is called SpaceX, but it might as well be called Elon Musk,” he said. “It only gets there because it's run by Musk.”
In another instance, he also said SpaceX is trading like a “meme stock” similar to GameStop Corp. (NYSE:GME).
Despite Musk’s prediction of SpaceX generating an annual revenue of $1 trillion by 2030, Cramer thinks the stock’s allure goes beyond any single projection. He posits that investors are valuing Musk’s history of establishing industry-defining businesses and his knack for converting ambitious concepts into commercial opportunities.
Notably, a previous report indicated that the company reportedly recorded a loss of nearly $5 billion last year, despite raking in over $18.5 billion in revenue.
However, Cramer also pointed out that those who doubted the stock’s valuation and bet against the rally have paid a hefty price. He argued that traditional valuation methods fail to capture what many investors see in the stock.
SpaceX Valuation Debate Intensifies
The recent surge in SpaceX’s shares has not only boosted Musk’s net worth to over $1.3 trillion but also raised $85.9 billion via the overallotment option for the IPO. This places Musk’s fortune above the market cap of all but 12 public companies worldwide, including Microsoft Corp. (NASDAQ:MSFT) as well as Amazon.com Inc. (NASDAQ:AMZN).
Moreover, the acquisition of Cursor by SpaceX, finalized on Tuesday, suggests a strategic move. The merger filing indicates that the two companies had been working together for months before the acquisition was announced, with references to a separate "Compute Agreement" suggesting a broader and deeper partnership than a standard acquisition.
Meanwhile, Susquehanna strategist Chris Murphy stated that options trading on SpaceX’s first day implied roughly a 15% chance of the stock rising 50% and roughly a 13% chance of it falling 50% over the next three months, highlighting significant uncertainty around its valuation and post-listing performance, reported CNBC.
SPCX Price Action: Since its debut on Friday, the stock has surged 25.38%, as per Benzinga Pro. On Tuesday, it climbed 4.83% to close at $201.80.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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