Ed Elson, a prominent tech analyst widely followed by Gen Z, has declared Elon Musk’s SpaceX a “trainwreck” ahead of its initial public offering.
Elson, who co-hosts the Prof G Markets podcast with entrepreneur Scott Galloway, made the determination after reading through the firm’s 277-page S-1 filing. He didn’t hold back in a Substack post, calling the filing “unserious, empty, hallucinatory, and borderline dishonest.”
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The problems start early, he writes, with “psychedelic” language such as SpaceX’s mission: “to extend the light of consciousness to the stars.”
Other phrases that pop up repeatedly are “human augmentation” (11 times) and, natch, AI (1,251 mentions — more often than the name “Jesus” appears in the Bible, Elson notes).
Less-than-stellar financials
Elson’s bigger concern, though, is with the financials. SpaceX, he says, is spending roughly twice as much as it makes — on pace to lose four times as much this year as last, when it experienced $4.9 billion in net losses.
He added that the firm’s revenue — up 15% year over year — is low for a business that presents itself as an AI company.
“There’s no getting around it — these numbers are terrible,” he wrote. “I’ll put it simply: slowing revenue + skyrocketing expenses = not good.”
Less-than-stellar financials aren’t unheard in an IPO. But with SpaceX’s numbers, Elson says, the valuation of the company defies any sort of logic.
“The stock is set to be priced at 107 times sales, which would make it one of the most expensive stocks in history,” he writes. “It will be twice as valuable (as) Walmart while generating less revenue than Macy’s.”
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To put that in perspective, here are relative values of Big Tech IPO stock prices to sales, historically:
Google and Apple: stocks valued at 10 times sales.
Meta: stocks valued at 28 times sales (seen as massive when first offered).
SpaceX: stocks valued at 107 times sales.
AI unit drives SpaceX ‘off the rails’
Elson called SpaceX’s AI unit, xAI, a “sinkhole” and a “#MoneyFurnace” that lost $2.5 billion last year and had quarterly capital expenditures of $7.7 billion.
