SpaceX valuation detached from current financial reality
Jim Chanos argues that SpaceX's rumored $2 trillion valuation cannot be justified by its underlying business segments.
The argument
Chanos notes that while Starlink is a decent, profitable business, its growth has slowed and it is likely subsidized by cheap internal launch rates. Meanwhile, the core launch business remains unprofitable due to heavy Starship development costs, and XAI is currently a massive cash sinkhole.
The thesis, stress-tested
✓ What validates it
- ✓Public S-1 updates showing continued losses in the launch division
- ✓Starlink price cuts continuing to impact average revenue per user
▸ Risks discussed
- ▸Starship successfully achieves orbit and dramatically lowers launch costs
- ▸Starlink growth re-accelerates in untapped global markets
Hear it yourself
"Tom? Ten years is pretty aggressive, probably. I'm not sure how many GPUs will be there in ten years from now. Very safe bet, I'm sure. So I would agree with Jim on the the real bet or the real investment is really the chips or the service or whatever it is, the goals inside the data centers, as opposed to the landlords, as you call it. I think it's actually very good statement. So I'm not gonna argue that the new clouds are a fantastic investment. I think that, from a depreciation perspective yeah, we can focus on depreciation. Maybe it's not 10, maybe it's six, whatever it is."
10:50
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