SpaceX (NASDAQ:SPCX) went public in June in what was the largest IPO of all time. Famed British investor Jeremy Grantham sees massive AI opportunities for the company and an IPO that everyone will still be talking about 50 years from now.
Grantham on SpaceX IPO
The SpaceX IPO made CEO Elon Musk a trillionaire and could make investors in the company richer in years to come if the story can play out, Grantham said in an interview on Morningstar’s "The Long View" podcast.
"Supply and demand being what it is, it’s hard to imagine the price won’t go up, and perhaps it will go up a lot," Grantham said.
The GMO co-founder and chief investment strategist said the SpaceX IPO is a "landmark historical event."
"It will be amazing, by the way, if it doesn’t collapse, because it will need such massive developments on AI that our entire lives are totally different."
Grantham said SpaceX is "the craziest IPO in the history of man," an event that had everyone lining up telling investors to buy.
"In 50 years, they’ll be telling and writing stories about SpaceX and they’ll be quoting you paragraphs from the prospectus, and you will be laughing at it."
The Elon Musk Ability
The British investor said that Musk is good at creating perceived value for his companies, which allows him to sell stock and reinvest in them.
"You’re so good at propaganda that instead of the price falling because of the dilution, it doesn’t, and very quickly it’s multiples of fair value once again."
Grantham mentions the greater fool theory when talking about Musk in the interview and his ability to get investors. This theory involves making money by buying overvalued assets, regardless of fundamentals, and later selling them at higher prices to "greater fools."
"The cohort that invested in Musk were proven right."
Grantham said time will tell if the theory works with SpaceX.
"Whether they can pull it off with $1.7 trillion worth of hype about AI – put it this way: If AI is actually going to be so good that the $1.7 trillion is cheap."
The investor said we should hope this is just AI hype, because if it’s not, the technology could put lives at severe risk.
"I wouldn’t wish it on our species at all."
Image via Shutterstock
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