Right now, SpaceX has provided 639 million shares to trade. People want more.
In a month, there will be 1,583 million shares to trade.
But right now, there are actually 820 million shares to trade: the 639 million provided by SpaceX, plus another 181 million provided by short sellers.
I guess that depends on your definition of "hold"? The entire concept of short-selling requires that you're selling the shares from from someone who would presumably not otherwise be selling given that they're stipulating that they get the shares back afterwards. I think the point is that if those short sellers weren't there, there would just be fewer shares available to buy because the ones who are letting the short sellers borrow theirs would just be holding onto them.
They borrowed the shares and held those borrowed shares briefly, and sold them. So they don't hold them any longer, but they do have a contract where they are required to buy them later.
The original owner doesn't hold the shares either, but they do have a contract for them to be returned.
As a practical matter, this effectively creates shares, just like a bank loaning money creates money.
I feel like market cap valuations should have some way to factor in the supply/demand constraints. I know that float exists as a concept, but I think it's insane to call SpaceX a Trillion dollar company, when if it started selling significant stock tomorrow, it would probably be selling pennies on the dollar.
Tons of people and bots are saying insane things all the time. It is your choice to pay attention to insane things, or to ignore them and pay attention to the (presumably reputable) numbers.
Most company's stock would fall pretty hard if all the holders decided to sell at the same time.
So although Google, say, technically has a huge float on a percentage basis, because none of the big three holders (Eric Schmidt, Larry Page, and Sergey Brin) are selling any significant amount of their shares, the practical float is much lower.
Almost certainly, outside of standard trade restriction windows. I don't think they have any control over what you do in the market outside of preventing insider trading.
No. Especially not if you have friends who could short the stock and you come to some sort of pocket agreement that never sees the light of day. Especially then.
What the law says and enforcement of the law are sometimes 2 different things, but generally employees should not be shorting their own stock, lock up or no lock up.
The issue is that this creates a conflict of interest.
In the worst case scenario, as an employee, you can literally do a bad thing to cause the stock to go down. E.g. An engineer can make a bug which blows up a rocket.
So then you could short the stock, bug a rocket, and become super rich.
It's the same issue with athletes betting on their own team - it's trivial to throw the game.
My holdings aren't even locked up, and I'm still not allowed to short my employer -- true as a matter of policy which could get me fired, and true from a US legal perspective most of the time given my role.
Sorta, there are no SEC requirements for lockup. It is all depends on the agreement between the IPO company and the IPO underwriters syndicate. Spotify and Slack notably skipped lockup entirely.
Goldman Sachs, Morgan Stanley, BoA, ect are the ones who set the IPO lockup terms based on their risk and exposure post IPO.
Indexes, exchanges, underwriters, ect are all private institutions who mostly can and do set their own rules.
Hasn't the stock already collapsed below IPO price? Does that mean the IPO was simply overpriced? Do these people expect the stock to go down even further? Shorting is way more risky I don't see why this would be the case unless my questions turned out to be predictions.
Yes, people expect it to trade much lower, around $40 per share, still would be a huge valuation for what the company has done. Goldman Sachs analysts had an extreme range, of like $6 Billion to $5T, but the consensus $2T required 100x revenue multiple by 2030. If revenue was less than 10x by 2030 it's less than $100B company, and only $6B if it remains flat. So a lot of downsides and the upside requires a continuation of some insane magic.
True, but it's the range from different analysts. Saying "we don't know" isn't really an option. Gotta say something when your IPOing a trillion dollar company.
> "I think it could be half over the course of the year," Noble said, adding that he believes a fair value for the shares is around $30, implying a decline of roughly 78% from current levels.
A rational person isn't willing to pay more than the present value of future cash flows. Just like how a rational person wouldn't pay $101 for a $100 bill.
Where it gets fun is that: (1) we have people selling $100 bills for more than $100 and, (2) we have people gladly buying $100 bills for more than $100.
I'd argue the opposite. If the price is largely vibes, you could see wild swings if sentiment changes dramatically. The bitcoin market is an excellent example of this. Worse, the recent BBB- rating on their bond issuance suggests a lack of lender confidence, and if their stock continues to decline those factors could compound.
For months (years?) JPM thought Tesla was a $130 to $150 stock, until JPM helped out on the SPCX IPO, and wouldn't you know it, replaced the Tesla analyst, current target $475.
My point don't listen to ANY stock analysts.
>J.P. Morgan analyst Rajat Gupta just took over the investment bank's coverage of Tesla's stock (TSLA), and in doing so, he lifted the firm's rating to neutral from underweight. The previous analyst, Ryan Brinkman, was a fairly vocal Tesla bear who warned just two months ago that investors should treat the stock with a "high degree of caution."Brinkman's previous price target of $145 implied 65% downside from Thursday's closing price of $418.45. But Gupta has now raised J.P. Morgan's Tesla target to $475 in conjunction with the upgrade.
Tesla is another crazily overpriced stock but first my pointless take on spaceX.
(1) SpaceX has a huge number of restricted shares coming onto the market soon as this thread has discussed.
(2) SpaceX has incredible tech (reuse, internet, engines, scale, reliability), yet in the past week Japan demonstrated a rocket hovering and landing, and China launched a rocket to space and caught it/landed it. So SPCX tech is incredible, but China has basically done everything SpaceX has done except relaunch and launch reliably at scale.
Those aren't trivial things but I see within a couple of years there will be competitors doing what SpaceX has been doing. Matching the reliable launch will likely take longer. No one has anything like Starship and their fantastic engines, but that's not done yet. Let's not forget about upcoming space internet competitors. I put all this together and see they are crazily overvalued and still has potential to be do well too. I kept wanting to short it and short Tesla too, but Tesla has been stubbornly resisting me.
Tesla's PE is down to 357 at the moment. It has hovered around 400. Incredibly profitable and trustworthy (for non EVs) Toyota has a PE of 9.x. Nine! GM is 28, and Chinese companies are making the best EVs but more importantly have better battery and drivetrain tech in the field and faster charging. They are blocked from the US but apparently Canada will now allow them. Tesla doesn't have anything over them, including price. Tesla makes great cars, Musk is awful. I have an over 10 year old tesla and it is still a great car.
Tesla's future worth is because of meme stockness, optimus robots (which they still have been demoing with human remote control misleadingly), battery storage, xAI (eventually they'll do something worthwhile, right, more than illegal removing the clothes off people videos? at least they are making something off selling their extra inference capacity), and robotaxis.
robotaxi tech would cool if it worked, every few months Musk embarasses himself by announcing it's going nationwide by the end of the year or something similar that never happens. But is this going to make billions? Doubtful, and Waymo will be there to drive it down to not be that profitable. And waymo actually does 500k rides per week in 10 cities. Does tesla do 500 a week yet?
So Tesla is overvalued, and also, a miracle could occur and they could come up with software to make the robot do something useful - they are still overvalued even with that. They just don't have that great robot brain. Maybe LLMs will solve that eventually.
But tesla is at 350 PE, they need a reduction of about 15 times in stock price to get to a reasonable PE of 23. Their sales went up last quarter but they were behind their all time high sales and Musk destroyed their reputation. Let's say tesla is only 10x overpriced based on PE. So they should lose 90% of their stock price!? It's a meme stock but it should go down.
I think the pullback from the initial IPO bump was expected. I think the news here is expectations that it has a lot more downside to come.
Particularly once it gets past the lockup period. If I had to guess I say a lot of folks are thinking a lot of people will sell post lock up and they’re timing their shorts around that date.
More than half of IPOs fall below their price in the first year and AFAIK it’s something like more than half underperforming market over the first five.
Basically an IPO is a bad bet for a five year position. But SPCX is especially bad.
I wouldn't say that it collapsed, it's only slightly under its IPO price, $134 vs. $135.
However it's not going up and later this month the first lockup period ends and people who got stock options are allowed to sell some of their stocks. These people don't care if the price is $134 or $135, because they go in much much lower, down to $30, from what I can tell. So starting this month there's going to be new shares available to buy, and the sellers are less critical of the price your offering.
Over two weeks ago, calls outnumbered puts 5 to 1 according to an article by SeekingAlpha. I am wondering if this flip is too reactive. I can't discount the "Musk premium" that keeps people enamored with his securities and cause unpredictability.
Space is old news, it had its moment of euphoria but then AI came around and made space bulls look like fools, because sooner or later quality of life matters and as overvalued as AI could be, it's 1000x more real than space for QOL
Yes, you'd expect the Falcon 9-based space launch and Starlink businesses to retain some sort of value whatever happens. They could easily be sold off as going concerns if things were to go south.
The failure of SpaceX might doom xAI and Mars colonisation, but it's very unlikely to wipe out American medium lift launch capabilities.
It would seem extremely dumb for a market stock to move significantly, based only on livestreams of designated test missions.
I mean wow, the Starship test flight today probably gave a lot of useful data during the countdown and fueling and preparations. I sort of had deja vu because there was recently another aborted launch (Electron? Rocket Lab?) where the engines ignited at T-00:00, and shut down immediately.
It was honestly majestic to watch that machine shut down gracefully and abort for the day. Nonetheless, it failed to influence my stock purchase decisions in the slightest.
> It would seem extremely dumb for a market stock to move significantly
The stock market has been doing extremely dumb things for as far as I personally remember. It’s an aggregate of biased and dumb actors chasing trends, so that’s pretty much expected
How many years till it works and it's in service for regular missions? SpaceX says just a few more test flights hopefully, it's years later from earlier optimistic completion dates and they made progress of course, but it's not close.
I'd say 4-5 years. It's huge and impressive and has lots of development work left.
Every single shorted stock, was purchased by someone else who is taking the long side of the trade. So there's as many people betting the stock will go up. This says more about volatility and volume of trading, than anything else.
They're illegal, and you can look at them just as the broker making a long bet themselves. Since they'll have to pay off the short seller, if the stock goes down.
There’s always a buyer on the other side of a short, naked or located. The question is whether the originating broker actually borrowed the shares.
They are supposed to verify that before they place the trade and generally do follow the rules. Because if they don’t, they will be not allowed to allow any short sales for that security.
Given the continued downward trend, it may be the buyers may just be disagreeing on how fast it drops, not necessarily taking a long term buy and hold position. I don't know much about option pricing, but aren't put options basically betting on the spread?
That's exactly the point. The clickbait title wants you to forget that fact and draw an incorrect conclusion. It could have also been, "SPCX is the most purchased new stock", but that wouldn't have fed the desired narrative.
You're conflating two things though. Shares are being borrowed to sell in this instance, referred to as short-selling. These shares can theoretically be borrowed multiple times over to sell (ex. Gamestop fiasco). This is not current owners of the shares selling to new buyers, they are selling already-owned shares of SPCX.
It has nothing to do with the shares being borrowed. That's a separate transaction that comes with a fee. The point is that the share is then sold. It's sold to someone who is taking the long position. The original owner of the share, from whom it was borrowed, makes their money in fees, and by investing any security deposit given by the borrower. They are not taking a long or short position.
Yes, that is how short-selling works, but you're claiming that the only reason the headline isn't "SPCX is the most purchased new stock" is for narrative reasons, which is patently false. Shorting necessitates that someone decides to sell a stock they do not own, which creates downward pressure on the price. Saying "there's always someone on the other end of the transaction" is true, but not at the same price. If what you were implying were true, the price of shares would never change. You probably understand this, but share prices decrease and increase due to the number of buyers and sellers. Hence, the more people that short-sell a stock, the lower the share price goes until it can find buyers.
I never intended to imply that the law of supply and demand was nullified.
And I didn't say that the price was unaffected, just that there is as much money
thinking they're getting a valuable long term investment, as there is as money
shorting the stock. (By definition, since every sale is consensual, and of the opposite position)
But the act of selling (and shorting) puts downward pressure on the stock. Those buyers are buyers at a lower price, not a higher one (like you would find in a stock with lots of buyers).
That's why saying "most shorted stock" is saying something and "every seller has a buyer" is not.
Yes, stocks go up and down; hardly revelatory. The point, regardless of the imprecise wording of my alternate title, remains. There are people who think they are getting a valuable investment, at the price short-sellers are willing to sell at. There's just as much optimism as pessimism about the stock, at that price. And that's my complaint about the title, it wants to only highlight one side of the trade -- for narrative reasons.
>There's just as much optimism as pessimism about the stock, at that price.
No, there isn't, because the price breaks in the direction that there is more optimism or pessimism. When the pessimists run out of optimists at $135/share, they start digging for them at $134/share. The price ran out of optimists and had to move down to find more. Otherwise the price would lock at a single point.
And abundance of pessimists indicates that a lot of "downward digging" is taking place, it's very relevant.
You're hyper focusing on the tree here and missing the forest.
People respond to market forces. When they see that there are other people making irrational valuations, they may wait to buy even lower. It's not a judgment about the intrinsic value of the stock at the current price, but of opportunities in the market.
It's still a hard fact that for every single trade, there is someone as fully optimistic, to perfectly match the pessimistic side. And people have to be pretty committed to a narrative to deny that fact.
Your hard fact is correct, but it's your extrapolation that it tells you something meaningful that isn't. The fact provides zero information. Its on par with "every gallon of milk is sold to a person" or "every leaf comes from a tree".
No, you're just working very hard to miss the point. Nobody can place the pessimistic bet, unless there is someone equally optimistic in the other direction. The fact that you're fixated on the price varying as each side attempts to do the best it can is just a commitment to a narrative, not a useful insight.
Here's the simple way to know you're wrong. The stock price isn't zero. That means there people willing (at some price) to put their money where their mouth is, that the people betting against the stock at that price are wrong.
But at that point they're both just making bets.. all it says is that there are an equal number of dollars willing to gamble at that price point. It says nothing about which side of the gamble will win.
Shorts don't exist in a vacuum. They literally can't be made, unless there was someone in the market who thinks that at the short price, the stock is a good investment opportunity. Every trade is proof that the market thinks the stock is a good investment at that price. I don't know why you have such a hard time facing up to that fact, even after you admit it is one.
> [Shorts] literally can't be made, unless there was someone in the market who thinks that at the short price, the stock is a good investment opportunity. Every trade is proof that the market thinks the stock is a good investment at that price.
Again, this isn't true. The spot price has to decrease from the point where short-selling is happening for there to be a willing buyer, unless there is a new bid. Yes, transactions happen at one singular price, but if you're only saying that every seller has a buyer and every buyer has a seller, then the guy that you replied to is correct. What you're essentially saying is that "every gallon of milk is sold to a person". This is not useful information.
> What you're essentially saying is that "every gallon of milk is sold to a person". This is not useful information.
Only because you're ignoring the other option, that the gallon of milk DIDN'T sell. It tells you that there was demand for the milk you had to sell. If there was no customer, the milk would have spoiled. There are still people who want to drink milk. There are still people who believe you're not selling poison, that milk is a worthy thing to buy from you. That is useful information.
> Every trade is proof that the market thinks the stock is a good investment at that price.
And every (short) sale is proof that the market thinks it's a bad investment at that price, which logically nullifies your point.
So to climb out of this nullification, we have to consider how many actors didn't get filled at the price they want. There isn't infinite liquidity at every price point.
> And every (short) sale is proof that the market thinks it's a bad investment at that price, which logically nullifies your point.
No it doesn't. It's the flip side of the one you want to focus on, and all i've been saying is that it's not the ONLY side. If it nullifies my point, it also nullifies yours. They cancel EACH OTHER out.
> There isn't infinite liquidity at every price point.
Sure, but so what? That is true of literally every product sold. The price isn't zero, so there is enough liquidity to cover every short that was actually sold. You've already admitted to that. The fact that the price goes down, (and can sometimes move back up) is immaterial.
>So to climb out of this [cancel each other out], we have to consider how many actors didn't get filled at the price they want. There isn't infinite liquidity at every price point.
And no, there is not enough liquidity, so the price has to move to provide it. That's why you cannot hand wave away price movement, it's intrinsically part of transactions being formed. And why a headline like "Heavily shorted" captures sentiment around a stock, especially one that is tanking.
That is true for the stocks but not options. Anyone with a brokerage account can write some calls and if they get exercised it’s up to them to find the stock to buy. Most pricing models assume the liquidity is always available but that’s not necessarily the case.
true, but the other side of that trade is almost always an options market maker who will hedge their delta by trading the underlying stock. so, yes, buying a call doesn't directly represent share ownership, but it almost always results in a commensurate share purchase. not 1:1, but reflecting the delta of the option.
> Every single shorted stock, was purchased by someone else who is taking the long side of the trade.
> So there's as many people betting the stock will go up.
The first sentence is a useful reminder, but second has a error: A single person can have multiple bets, and not all bets are the same volume.
For example, Alice has a budget of $10 and believes the coin-flip will land Heads. Alice makes a $5 wager with Bob and a $3 wager with Carol and a $2 wager with Dan. The equilibrium is in money, rather than opinion-havers.
You're absolutely correct, and I should have been more precise. The value is always identical, but the number of participants, need not be the same for each position. Mea culpa.
I'm not crazy enough to try to short it, but getting out of the money put options a year or two out seems like a good idea.
If you're going to short it, you better have a buffer big enough to cover it going up to $500 for a moment somewhere before Elon is free to sell next summer. Someone will do a short squeeze, and slowly sell into it.
From Matt Levine just today...
https://www.bloomberg.com/opinion/newsletters/2026-07-16/sho...
$4T was 20% of all US currency ever printed in 2020. What makes this worth 10%? China and Japan are already catching up.
This was just a bag drop on retail and trying to force it into retirement funds proves it.
Do the short sellers actually hold shares?
I guess that depends on your definition of "hold"? The entire concept of short-selling requires that you're selling the shares from from someone who would presumably not otherwise be selling given that they're stipulating that they get the shares back afterwards. I think the point is that if those short sellers weren't there, there would just be fewer shares available to buy because the ones who are letting the short sellers borrow theirs would just be holding onto them.
They borrowed the shares and held those borrowed shares briefly, and sold them. So they don't hold them any longer, but they do have a contract where they are required to buy them later.
The original owner doesn't hold the shares either, but they do have a contract for them to be returned.
As a practical matter, this effectively creates shares, just like a bank loaning money creates money.
It can go on and on. Short seller 1 sells to party A. Party A allows short seller 2 borrow shares. Short seller 2 sells shares party c. On and on.
Its more important to know that they are additional selling pressure
every owner is potentially double selling pressure
while liquidity itself is variable
I feel like market cap valuations should have some way to factor in the supply/demand constraints. I know that float exists as a concept, but I think it's insane to call SpaceX a Trillion dollar company, when if it started selling significant stock tomorrow, it would probably be selling pennies on the dollar.
Tons of people and bots are saying insane things all the time. It is your choice to pay attention to insane things, or to ignore them and pay attention to the (presumably reputable) numbers.
You can be that factor! Short sell the stock, and use the money to invest in a more-accurately valued business.
Most company's stock would fall pretty hard if all the holders decided to sell at the same time.
So although Google, say, technically has a huge float on a percentage basis, because none of the big three holders (Eric Schmidt, Larry Page, and Sergey Brin) are selling any significant amount of their shares, the practical float is much lower.
The liquidity problem affects all the stocks, some more than others
In a few weeks the pre-ipo share owners can offload the first batch of their shares (after q2 results release)
So guessing non investors in SpaceX are shorting for this event in expectation of a drop
Typically this would be prohibited (at least as an employee)
If you have holdings that are locked up, are you allowed to short stock or use options to hedge your position?
Almost certainly, outside of standard trade restriction windows. I don't think they have any control over what you do in the market outside of preventing insider trading.
Yes they absolutely can and do. Lockup provisions are contractual and typically quite strict.
No. Typically lockup agreements prevent any kind of trading of derivative or synthetic positions (think: shorts, swaps, options, etc).
No. Especially not if you have friends who could short the stock and you come to some sort of pocket agreement that never sees the light of day. Especially then.
What the law says and enforcement of the law are sometimes 2 different things, but generally employees should not be shorting their own stock, lock up or no lock up.
The issue is that this creates a conflict of interest.
In the worst case scenario, as an employee, you can literally do a bad thing to cause the stock to go down. E.g. An engineer can make a bug which blows up a rocket.
So then you could short the stock, bug a rocket, and become super rich.
It's the same issue with athletes betting on their own team - it's trivial to throw the game.
My holdings aren't even locked up, and I'm still not allowed to short my employer -- true as a matter of policy which could get me fired, and true from a US legal perspective most of the time given my role.
I'm not an employee :)
Sorta, there are no SEC requirements for lockup. It is all depends on the agreement between the IPO company and the IPO underwriters syndicate. Spotify and Slack notably skipped lockup entirely.
Goldman Sachs, Morgan Stanley, BoA, ect are the ones who set the IPO lockup terms based on their risk and exposure post IPO.
Indexes, exchanges, underwriters, ect are all private institutions who mostly can and do set their own rules.
The terms are public so you can read them
Something like 20% can be sold after the q2 results are released
I am fully aware of the terms. There are lots of schedules. I was speaking to the origins of "prohibitions".
It is also worth noting that typical lockup contracts can be waived early at the sole discretion of the underwriters.
Hasn't the stock already collapsed below IPO price? Does that mean the IPO was simply overpriced? Do these people expect the stock to go down even further? Shorting is way more risky I don't see why this would be the case unless my questions turned out to be predictions.
Yes, people expect it to trade much lower, around $40 per share, still would be a huge valuation for what the company has done. Goldman Sachs analysts had an extreme range, of like $6 Billion to $5T, but the consensus $2T required 100x revenue multiple by 2030. If revenue was less than 10x by 2030 it's less than $100B company, and only $6B if it remains flat. So a lot of downsides and the upside requires a continuation of some insane magic.
> Goldman Sachs analysts had an extreme range, of like $6 Billion to $5T
What a weird way for them to say "we don't know"! It's like saying this house has 0 to 100 bathrooms.
True, but it's the range from different analysts. Saying "we don't know" isn't really an option. Gotta say something when your IPOing a trillion dollar company.
"So you're saying there's a chance? It might actually be possible to have 100 bathrooms! I knew it!"
To keep the proportions correct, it's between a model house the size of a piece of paper or a normal 2-bedrooms.
I would say it's more like 600 sq ft to 5000 sq ft. Nobody knows.
I haven't seen anything saying $40. The lowest I have seen is $70.
From TFA:
> "I think it could be half over the course of the year," Noble said, adding that he believes a fair value for the shares is around $30, implying a decline of roughly 78% from current levels.
That's an absurd valuation. Typically stocks are valued at what people are willing to pay, with earnings partially driving that value.
A rational person isn't willing to pay more than the present value of future cash flows. Just like how a rational person wouldn't pay $101 for a $100 bill.
Where it gets fun is that: (1) we have people selling $100 bills for more than $100 and, (2) we have people gladly buying $100 bills for more than $100.
I'd argue the opposite. If the price is largely vibes, you could see wild swings if sentiment changes dramatically. The bitcoin market is an excellent example of this. Worse, the recent BBB- rating on their bond issuance suggests a lack of lender confidence, and if their stock continues to decline those factors could compound.
Verizon + AT&T + Boeing was my estimate for SpaceX value.
JPM still thinks its a $300 stock
so does Jack Grubman, after being instructed to take a "fresh look" at it.
It is... as long as somebody else thinks so.
For months (years?) JPM thought Tesla was a $130 to $150 stock, until JPM helped out on the SPCX IPO, and wouldn't you know it, replaced the Tesla analyst, current target $475.
My point don't listen to ANY stock analysts.
>J.P. Morgan analyst Rajat Gupta just took over the investment bank's coverage of Tesla's stock (TSLA), and in doing so, he lifted the firm's rating to neutral from underweight. The previous analyst, Ryan Brinkman, was a fairly vocal Tesla bear who warned just two months ago that investors should treat the stock with a "high degree of caution."Brinkman's previous price target of $145 implied 65% downside from Thursday's closing price of $418.45. But Gupta has now raised J.P. Morgan's Tesla target to $475 in conjunction with the upgrade.
https://www.morningstar.com/news/marketwatch/20260605179/jp-...
Tesla is another crazily overpriced stock but first my pointless take on spaceX.
(1) SpaceX has a huge number of restricted shares coming onto the market soon as this thread has discussed.
(2) SpaceX has incredible tech (reuse, internet, engines, scale, reliability), yet in the past week Japan demonstrated a rocket hovering and landing, and China launched a rocket to space and caught it/landed it. So SPCX tech is incredible, but China has basically done everything SpaceX has done except relaunch and launch reliably at scale.
Those aren't trivial things but I see within a couple of years there will be competitors doing what SpaceX has been doing. Matching the reliable launch will likely take longer. No one has anything like Starship and their fantastic engines, but that's not done yet. Let's not forget about upcoming space internet competitors. I put all this together and see they are crazily overvalued and still has potential to be do well too. I kept wanting to short it and short Tesla too, but Tesla has been stubbornly resisting me.
Tesla's PE is down to 357 at the moment. It has hovered around 400. Incredibly profitable and trustworthy (for non EVs) Toyota has a PE of 9.x. Nine! GM is 28, and Chinese companies are making the best EVs but more importantly have better battery and drivetrain tech in the field and faster charging. They are blocked from the US but apparently Canada will now allow them. Tesla doesn't have anything over them, including price. Tesla makes great cars, Musk is awful. I have an over 10 year old tesla and it is still a great car.
Tesla's future worth is because of meme stockness, optimus robots (which they still have been demoing with human remote control misleadingly), battery storage, xAI (eventually they'll do something worthwhile, right, more than illegal removing the clothes off people videos? at least they are making something off selling their extra inference capacity), and robotaxis.
robotaxi tech would cool if it worked, every few months Musk embarasses himself by announcing it's going nationwide by the end of the year or something similar that never happens. But is this going to make billions? Doubtful, and Waymo will be there to drive it down to not be that profitable. And waymo actually does 500k rides per week in 10 cities. Does tesla do 500 a week yet?
So Tesla is overvalued, and also, a miracle could occur and they could come up with software to make the robot do something useful - they are still overvalued even with that. They just don't have that great robot brain. Maybe LLMs will solve that eventually.
But tesla is at 350 PE, they need a reduction of about 15 times in stock price to get to a reasonable PE of 23. Their sales went up last quarter but they were behind their all time high sales and Musk destroyed their reputation. Let's say tesla is only 10x overpriced based on PE. So they should lose 90% of their stock price!? It's a meme stock but it should go down.
I think the pullback from the initial IPO bump was expected. I think the news here is expectations that it has a lot more downside to come.
Particularly once it gets past the lockup period. If I had to guess I say a lot of folks are thinking a lot of people will sell post lock up and they’re timing their shorts around that date.
Tbh I'm no5 sure I've even seen an IPO where the price didn't collapse initially.
More than half of IPOs fall below their price in the first year and AFAIK it’s something like more than half underperforming market over the first five.
Basically an IPO is a bad bet for a five year position. But SPCX is especially bad.
I wouldn't say that it collapsed, it's only slightly under its IPO price, $134 vs. $135.
However it's not going up and later this month the first lockup period ends and people who got stock options are allowed to sell some of their stocks. These people don't care if the price is $134 or $135, because they go in much much lower, down to $30, from what I can tell. So starting this month there's going to be new shares available to buy, and the sellers are less critical of the price your offering.
Down to $124 already today...
Over two weeks ago, calls outnumbered puts 5 to 1 according to an article by SeekingAlpha. I am wondering if this flip is too reactive. I can't discount the "Musk premium" that keeps people enamored with his securities and cause unpredictability.
That just means lots of people are writing calls[1]
[1] ie are happy to be synthetically short the stock and see a demand for the calls
Space is old news, it had its moment of euphoria but then AI came around and made space bulls look like fools, because sooner or later quality of life matters and as overvalued as AI could be, it's 1000x more real than space for QOL
95% of SpaceX's valuation is in AI.
Sure thing brother
I just hope this doesn't destroy the company that would suck lose their edge and then China comes in
No one forced them to IPO well above the present value of their future cash flows. Or claim their TAM was $28 trillion.
Yes, you'd expect the Falcon 9-based space launch and Starlink businesses to retain some sort of value whatever happens. They could easily be sold off as going concerns if things were to go south.
The failure of SpaceX might doom xAI and Mars colonisation, but it's very unlikely to wipe out American medium lift launch capabilities.
And to merge with twitter and an unprofitable ai lab
Related:
SpaceX stock erases all its gains and slides below IPO price in intraday trading
https://news.ycombinator.com/item?id=48933344
SpaceX bond worth 10% less than issue price – heading for junk bond status
https://news.ycombinator.com/item?id=48920181
SpaceX's core business is transferring money from believers in Elon Musk's enrichment schemes to banks and short sellers.
Not quite, it's also about transferring money to the Saudi princes who financed his buyout of Twitter.
There's another Starship launch today. It'll be interesting to watch the stock price react to the failures and successes of their testing campaign.
Down quite sharply in response to the aborted launch.
It would seem extremely dumb for a market stock to move significantly, based only on livestreams of designated test missions.
I mean wow, the Starship test flight today probably gave a lot of useful data during the countdown and fueling and preparations. I sort of had deja vu because there was recently another aborted launch (Electron? Rocket Lab?) where the engines ignited at T-00:00, and shut down immediately.
It was honestly majestic to watch that machine shut down gracefully and abort for the day. Nonetheless, it failed to influence my stock purchase decisions in the slightest.
What does influence your stock purchase decisions?
Your mom's nightly satisfaction ratings.
> It's huge and impressive and has lots of development work left.
That's a "strong buy" signal
> It would seem extremely dumb for a market stock to move significantly
The stock market has been doing extremely dumb things for as far as I personally remember. It’s an aggregate of biased and dumb actors chasing trends, so that’s pretty much expected
How many years till it works and it's in service for regular missions? SpaceX says just a few more test flights hopefully, it's years later from earlier optimistic completion dates and they made progress of course, but it's not close.
I'd say 4-5 years. It's huge and impressive and has lots of development work left.
Every single shorted stock, was purchased by someone else who is taking the long side of the trade. So there's as many people betting the stock will go up. This says more about volatility and volume of trading, than anything else.
You are assuming there are not naked shorts out there.
They're illegal, and you can look at them just as the broker making a long bet themselves. Since they'll have to pay off the short seller, if the stock goes down.
There’s always a buyer on the other side of a short, naked or located. The question is whether the originating broker actually borrowed the shares.
They are supposed to verify that before they place the trade and generally do follow the rules. Because if they don’t, they will be not allowed to allow any short sales for that security.
Given the continued downward trend, it may be the buyers may just be disagreeing on how fast it drops, not necessarily taking a long term buy and hold position. I don't know much about option pricing, but aren't put options basically betting on the spread?
Regardless, you can't short anything without someone taking the opposite position. It's really independent of the overall downward trend.
This isn't saying anything, anyone selling a stock is selling to someone going long.
That's exactly the point. The clickbait title wants you to forget that fact and draw an incorrect conclusion. It could have also been, "SPCX is the most purchased new stock", but that wouldn't have fed the desired narrative.
You're conflating two things though. Shares are being borrowed to sell in this instance, referred to as short-selling. These shares can theoretically be borrowed multiple times over to sell (ex. Gamestop fiasco). This is not current owners of the shares selling to new buyers, they are selling already-owned shares of SPCX.
It has nothing to do with the shares being borrowed. That's a separate transaction that comes with a fee. The point is that the share is then sold. It's sold to someone who is taking the long position. The original owner of the share, from whom it was borrowed, makes their money in fees, and by investing any security deposit given by the borrower. They are not taking a long or short position.
Yes, that is how short-selling works, but you're claiming that the only reason the headline isn't "SPCX is the most purchased new stock" is for narrative reasons, which is patently false. Shorting necessitates that someone decides to sell a stock they do not own, which creates downward pressure on the price. Saying "there's always someone on the other end of the transaction" is true, but not at the same price. If what you were implying were true, the price of shares would never change. You probably understand this, but share prices decrease and increase due to the number of buyers and sellers. Hence, the more people that short-sell a stock, the lower the share price goes until it can find buyers.
I never intended to imply that the law of supply and demand was nullified. And I didn't say that the price was unaffected, just that there is as much money thinking they're getting a valuable long term investment, as there is as money shorting the stock. (By definition, since every sale is consensual, and of the opposite position)
But the act of selling (and shorting) puts downward pressure on the stock. Those buyers are buyers at a lower price, not a higher one (like you would find in a stock with lots of buyers).
That's why saying "most shorted stock" is saying something and "every seller has a buyer" is not.
Yes, stocks go up and down; hardly revelatory. The point, regardless of the imprecise wording of my alternate title, remains. There are people who think they are getting a valuable investment, at the price short-sellers are willing to sell at. There's just as much optimism as pessimism about the stock, at that price. And that's my complaint about the title, it wants to only highlight one side of the trade -- for narrative reasons.
>There's just as much optimism as pessimism about the stock, at that price.
No, there isn't, because the price breaks in the direction that there is more optimism or pessimism. When the pessimists run out of optimists at $135/share, they start digging for them at $134/share. The price ran out of optimists and had to move down to find more. Otherwise the price would lock at a single point.
And abundance of pessimists indicates that a lot of "downward digging" is taking place, it's very relevant.
You're hyper focusing on the tree here and missing the forest.
People respond to market forces. When they see that there are other people making irrational valuations, they may wait to buy even lower. It's not a judgment about the intrinsic value of the stock at the current price, but of opportunities in the market.
It's still a hard fact that for every single trade, there is someone as fully optimistic, to perfectly match the pessimistic side. And people have to be pretty committed to a narrative to deny that fact.
Your hard fact is correct, but it's your extrapolation that it tells you something meaningful that isn't. The fact provides zero information. Its on par with "every gallon of milk is sold to a person" or "every leaf comes from a tree".
No, you're just working very hard to miss the point. Nobody can place the pessimistic bet, unless there is someone equally optimistic in the other direction. The fact that you're fixated on the price varying as each side attempts to do the best it can is just a commitment to a narrative, not a useful insight.
Here's the simple way to know you're wrong. The stock price isn't zero. That means there people willing (at some price) to put their money where their mouth is, that the people betting against the stock at that price are wrong.
But at that point they're both just making bets.. all it says is that there are an equal number of dollars willing to gamble at that price point. It says nothing about which side of the gamble will win.
Shorts don't exist in a vacuum. They literally can't be made, unless there was someone in the market who thinks that at the short price, the stock is a good investment opportunity. Every trade is proof that the market thinks the stock is a good investment at that price. I don't know why you have such a hard time facing up to that fact, even after you admit it is one.
> No, you're working very hard to miss the point.
It seems the opposite is true here.
> [Shorts] literally can't be made, unless there was someone in the market who thinks that at the short price, the stock is a good investment opportunity. Every trade is proof that the market thinks the stock is a good investment at that price.
Again, this isn't true. The spot price has to decrease from the point where short-selling is happening for there to be a willing buyer, unless there is a new bid. Yes, transactions happen at one singular price, but if you're only saying that every seller has a buyer and every buyer has a seller, then the guy that you replied to is correct. What you're essentially saying is that "every gallon of milk is sold to a person". This is not useful information.
> What you're essentially saying is that "every gallon of milk is sold to a person". This is not useful information.
Only because you're ignoring the other option, that the gallon of milk DIDN'T sell. It tells you that there was demand for the milk you had to sell. If there was no customer, the milk would have spoiled. There are still people who want to drink milk. There are still people who believe you're not selling poison, that milk is a worthy thing to buy from you. That is useful information.
> Every trade is proof that the market thinks the stock is a good investment at that price.
And every (short) sale is proof that the market thinks it's a bad investment at that price, which logically nullifies your point.
So to climb out of this nullification, we have to consider how many actors didn't get filled at the price they want. There isn't infinite liquidity at every price point.
> And every (short) sale is proof that the market thinks it's a bad investment at that price, which logically nullifies your point.
No it doesn't. It's the flip side of the one you want to focus on, and all i've been saying is that it's not the ONLY side. If it nullifies my point, it also nullifies yours. They cancel EACH OTHER out.
> There isn't infinite liquidity at every price point.
Sure, but so what? That is true of literally every product sold. The price isn't zero, so there is enough liquidity to cover every short that was actually sold. You've already admitted to that. The fact that the price goes down, (and can sometimes move back up) is immaterial.
Nullify means cancel out
To make it clear to you,
>So to climb out of this [cancel each other out], we have to consider how many actors didn't get filled at the price they want. There isn't infinite liquidity at every price point.
And no, there is not enough liquidity, so the price has to move to provide it. That's why you cannot hand wave away price movement, it's intrinsically part of transactions being formed. And why a headline like "Heavily shorted" captures sentiment around a stock, especially one that is tanking.
That is true for the stocks but not options. Anyone with a brokerage account can write some calls and if they get exercised it’s up to them to find the stock to buy. Most pricing models assume the liquidity is always available but that’s not necessarily the case.
true, but the other side of that trade is almost always an options market maker who will hedge their delta by trading the underlying stock. so, yes, buying a call doesn't directly represent share ownership, but it almost always results in a commensurate share purchase. not 1:1, but reflecting the delta of the option.
> Every single shorted stock, was purchased by someone else who is taking the long side of the trade.
> So there's as many people betting the stock will go up.
The first sentence is a useful reminder, but second has a error: A single person can have multiple bets, and not all bets are the same volume.
For example, Alice has a budget of $10 and believes the coin-flip will land Heads. Alice makes a $5 wager with Bob and a $3 wager with Carol and a $2 wager with Dan. The equilibrium is in money, rather than opinion-havers.
You're absolutely correct, and I should have been more precise. The value is always identical, but the number of participants, need not be the same for each position. Mea culpa.
Almost all lenders are institutional funds like Vanguard and Fidelity.
As index funds they were forced to buy. They are not taking any view.
I'm not crazy enough to try to short it, but getting out of the money put options a year or two out seems like a good idea.
If you're going to short it, you better have a buffer big enough to cover it going up to $500 for a moment somewhere before Elon is free to sell next summer. Someone will do a short squeeze, and slowly sell into it.