TIP830: SpaceX (SPCX): Is It Really Worth $2 Trillion Dollars? w/ Kyle Grieve & Shawn O'Malley

**SPEAKER_1** (0:00)
You're listening to TIP.

**Shawn O'Malley** (0:03)
All right. So I genuinely never thought we'd be discussing Twitter or X, or whatever you want to call it on the show these days. And then at the same time, you're telling me that we're going to get to talk about Mars colonies in today's episodes. This is going to be a fun one.

**Kyle Grieve** (0:17)
Yeah, me either. But believe it or not, Twitter is now part of SpaceX's AI segment.

**Shawn O'Malley** (0:22)
But like, come on, Mars colonies? Objectively, super, super cool that this is something we're talking about as investors in 2026
Right.

**Kyle Grieve** (0:30)
And with that Mars colonization, Elon has to populate it with a million inhabitants just to unlock his incentives.

**SPEAKER_1** (0:40)
Since 2014, with more than 200 million downloads, we have interviewed the world's best investors, studied deeply the principles of value investing, and uncovered many compelling investment opportunities.
We focus on understanding businesses and intrinsic value, investing accordingly, and sharing everything we learn with you. This show is not investment advice. It's intended for informational and entertainment purposes only. All opinions expressed by hosts and guests are solely their own, and they may have investments in the securities discussed. Now for your hosts, Shawn O'Malley and Kyle Grieve.

**Shawn O'Malley** (1:26)
Hey, folks, I'd say that we own a few splashy names that are well known and attract a lot of attention in markets, from Amazon to Alphabet to Uber. There's definitely some blue chip businesses that we hold in our portfolio. But today, we're going to discuss one of the most popular and also polarizing companies to go public in recent memory. And that's none other than Space Exploration Technologies, or SpaceX. And part of what makes SpaceX so popular is simply all the investors who have made an absolute fortune by following Elon Musk into past investments. And we know that Elon is a pretty polarizing figure in himself. He tends to be somebody that you either love or hate with. Very few people in between, I've found.

**Kyle Grieve** (2:11)
Exactly. And part of the reason that I chose SpaceX was that it's simply just a fascinating business.
I'm no Elon Musk fanboy, but I think the business case of what SpaceX is trying to do really speaks to that eight-year-old kid inside me who loved rockets, Star Trek and just the unknown.
So, you know, SpaceX is really just dealing directly in all of those areas. But instead of it being a daydream or a fantasy, it's now reality. And when you look at it just as an investment, I also see the appeal there, you know, at least at a shallow layer. Tesla has been a 260-bagger since an IPO back in 2010 And I've spoken to more than one person who's literally bought their entire home with proceeds from their Tesla investment windfalls. And I'm sure you have similar stories, Shawn.

**Shawn O'Malley** (2:52)
Yeah, definitely with Tesla and NVIDIA for sure. I mean, those are the two where it seems like a lot of everyday investors really struck it rich in the past. And yet, I think we both personally missed out on those bets. So as much as I've argued at times that Tesla is just obscenely overvalued, it has objectively created an unbelievable amount of wealth. So I do think, you know, the intellectually honest thing to do is to try and look at a business like this, whether it's Tesla or SpaceX, with sober eyes, and try to at least understand how the market is able to justify valuations, like 100 times sales for SpaceX or 400 times earnings for Tesla. When with Tesla, the business has not grown for three years now, but I digress.

**Kyle Grieve** (3:41)
Yeah. And another great reason I think SpaceX is interesting to cover is just simply because of my affinity for understanding market psychology. You know, I think one of the best authority figures on understanding bubbles was John Kenneth Galbraith. And one of his best points about understanding bubbles was that they tend to exhibit quite consistent psychological characteristics. Now while I wouldn't say SpaceX is in a bubble by any means, it definitely does share many characteristics with past bubbles.
And when I see these characteristics, it's a pretty strong signal to me to really dial in on what I'm looking at to determine whether the price makes any sense.
So one of Galbraith's factors contributing to speculative euphoria is the specious association between money and intelligence. Galbraith clearly didn't care much about hurting people's feelings. But his point here is very important because there are a ton of very rich people taking part in the SpaceX deal. Either they already own shares from previous private rounds of fundraising, or they're just part of these institutions that are taking part. So you can see how there may be an inkling of truth that investors are following the wealthy hoping to tap into their intelligence and just kind of sidecar alongside them as SpaceX hopefully rips up.