SpaceX IPO: Get Rich or Get Wrecked

**Dave** (0:00)
SpaceX is doing something that no other company has ever done with an IPO of this size. They're going after retail investors, Dumb Money. Not with the usual five or 10% allocation, but with 30% on the largest IPO in history. That is roughly $25 billion sold directly to everyday investors like you. The price locked at 135, trading starts in two days. It's Rockets, it's Starlink, it's XAI, all wrapped up into one ticker, SPCX. But remember, this company has lost nearly $5 billion last year. The IPO is priced at 100 times sales. Elon is keeping more than 80% of the voting power. Some analysts are saying that it's overvalued by about double. And then there's Jim Cramer saying it's undervalued and worth $5 trillion. The right answer probably in there somewhere.
So is this the most accessible moonshot ever offered to regular investors? Or are you the exit liquidity for the smart money insiders that are and you're about to blow up your portfolio? Today on Dumb Money, will the SpaceX IPO make you rich? Or are you about to get wrecked?
This is Dumb Money Live.
Hey there, Dave here along with Chris and Jordan. We are Dumb Money. Welcome to Dumb Money Live. If you're already smashing the refresh button on your brokerage app every 20 seconds, trying to get some allocation, take a second and smash the like button. It will bring you good luck. Chris, Jordan, the 30% retail getting in on this biggest IPO in history sounds generous, but is it really because there's the valuation, the losses, the control? I want to hear from both of you on your takes on the real risk reward and how this is different than when we invested in SpaceX back around 2020 We have a lot to talk about there. But first, are either of you buying in on Thursday night?

**Jordan** (1:52)
I am not. I've got a lot of thoughts here.
I don't know if this is the right time to air all of them, but I think, look, we can argue over valuation all day long. Pretty sure that anybody here would think that I'm not a big fan of the valuation here and I'm not.
But I don't even think that that's the whole story here. The crazy valuation is the smallest part of this story. And I think that the real story is like, what is going on with banking regulations, with the NASDAQ, with who else? The MSCI, all relaxing their standards for letting companies into their products.

**Dave** (2:43)
This is going to be a spicy episode, I can tell you right now.

**Jordan** (2:46)
Yeah, I just don't think, look, I mean, the valuation will get worked out in the market over time. Now, could it jump and then fall and then do all sorts of stuff? I mean, we're talking four, so the float will be initially like 4% of the total value of the company. So, you got a really tight float, you've got a ton of interest, and you've got competition with all these ETFs and institutional money with retail investors. So, I think you're just looking for a really volatile stock in the near term.

**Dave** (3:20)
So, Jordan is out. Chris, are you in or out?

**Chris** (3:25)
Well, as you guys both know, anyone with $100,000 could have easily invested in SpaceX at any moment during the last six years, at valuations between roughly $30 billion, where we invested, and $300 billion. So, anyone, anyone with any amount of wealth could have easily thrown money into this company, a very tiny fraction of what it's about to IPO at, in the not too distant past.

**Dave** (3:58)
Because they kept raising money and kept giving more opportunities for people like us to get involved early on.

**Chris** (4:06)
I've had about 8,000 opportunities to invest in SpaceX over the past six years. And we did invest in SpaceX, right? We invested at about $30 billion valuation.
We were forced out of that fund a few years later at $200 and something billion, I think. I don't recall the exact number.

**Dave** (4:24)
I think it was $300.

**Jordan** (4:26)
Yeah, what's interesting about that investment...

**Dave** (4:27)
I think we're in closer to $50 and out at $300.

**Chris** (4:30)
Yeah.

**Jordan** (4:30)
What's interesting about that investment is that kind of the dynamics of what their proposed situation to let shareholders be liquid was totally different than what's actually happening right now. But I actually thought that was a really good plan. What they had initially was to let you invest in SpaceX, and that they were going to take the internet portion and say, okay, we're going to section that off, and we'll IPO that, but we're going to keep SpaceX private, right? And so that was the way to get early investor liquidity.