SpaceX IPO precedes shift to debt
The upcoming $75 billion SpaceX IPO was framed as its final equity raise, with the company planning to fund future growth through the investment-grade debt market.
The argument
Bailey Lipschultz reported that SpaceX has secured investment-grade credit ratings from three major firms, allowing it to tap debt markets for its massive capital needs. Jay Hatfield added that the stock could see a 'Musk premium' and double or triple, given it is less overvalued than Tesla.
The thesis, stress-tested
✓ What validates it
- ✓SpaceX successfully prices its IPO at or above $135 per share
- ✓SpaceX issues its first investment-grade bond offering post-IPO
▸ Risks discussed
- ▸High capital expenditure requirements for space launch and satellite networks
- ▸Execution risks in collaborating with other Musk entities like xAI
Hear it yourself
"I was, you know, go back and look at where we were in February. The three month run rate for non farm jobs was actually marginally negative. We're now 188,000. And they, again, if you look at the sort of the mosaic of labor data, not everything's pointing, you know, flashing, flashing green. Right. If you look at the unemployment rate, obviously that's stable. If you look at wage growth, that's not reaccelerating. Some of the small business surveys, you know, tensions to hire aren't looking great, but there's there's no question that we've seen a bit of a it looks like we've seen a bit of a pickup."
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