Svmuu News: Jeremy Grantham, a well-known investor, co-founder, and chief investment strategist at GMO, said that in 50 years, the market may look back on SpaceX’s IPO with “derision,” calling it “the craziest IPO in human history.”
Grantham believes that SpaceX’s grand vision of “making humanity a multi-planetary species,” along with the market’s current fervor for the company, may eventually be viewed by investors as overly optimistic. He said: ““Everyone is lining up to tell you to buy the craziest IPO in human history. Fifty years from now, people will quote passages from the prospectus and laugh at them.”
Although SpaceX has garnered significant institutional attention since joining the Nasdaq-100, its stock price has recently come under pressure.Currently, SpaceX’s stock price is down about 7% from its one-month high, hovering around $150—just slightly above its initial public offering target price of $135.
Wall Street institutions are divided on SpaceX’s future valuation.Morgan Stanley reportedly set a price target of $300, while Goldman Sachs analysts project a target price of about $205. JPMorgan Chase believes that Elon Musk’s goal of achieving $1 trillion in revenue by 2031 is “theoretically achievable,” but would require exceptional execution.
Grantham also pointed out that one of SpaceX’s biggest risks lies in the company’s heavy reliance on Musk’s personal leadership. He noted that Musk holds approximately 82% of the voting control, which serves as a key driver of SpaceX’s culture and innovation but also poses risks related to governance and leadership changes.
However, Grantham also acknowledged that SpaceX’s inclusion in the Nasdaq index could generate additional buying pressure. He noted that since a large amount of capital tracking the Nasdaq index would be forced to allocate holdings to SpaceX stock, market demand might exceed supply, thereby driving the stock price higher.
Nevertheless, he believes that SpaceX still faces significant challenges in the long term. If the company’s valuation rationale ultimately holds true, the future world could undergo dramatic changes due to the development of artificial intelligence and automation technologies; if, however, it fails to live up to expectations, this IPO will go down as a landmark event in financial history. (Fortune)