Yahoo Finance
David Einhorn and Morgan Stanley are looking at the same Space Exploration Technologies Corp.
(NASDAQ:SPCX) and arriving at almost opposite conclusions.
Einhorn's Greenlight Capital called SpaceX's $1.75 trillion IPO valuation a marker that a speculative top may be near.
Morgan Stanley's Adam Jonas now says the post-IPO decline has created a "unique opportunity" and carries a $300 price target.
The timing makes the disagreement more useful than a generic valuation debate.
SpaceX went public on June 12 at $135 a share and raised roughly $75 billion before the underwriters' option.
Its first public quarterly results then showed $7.8 billion of revenue but also a $541 million net loss and about $18.4 billion of capital spending as the company pushes simultaneously into rockets, Starlink and AI infrastructure.
The stock subsequently fell well below its post-IPO highs.
A large lockup release also increased the supply of tradable shares, making it harder to separate fundamental skepticism from the mechanical pressure that often follows a mega-IPO.
Einhorn's concern is essentially that investors are paying venture-style prices for a company with negative free cash flow and enormous future capital needs.
In Greenlight's Q2 letter, he questioned the optimism embedded in long-range revenue forecasts and the mechanics of an IPO that put a relatively small portion of the company into public hands.
That is a legitimate issue when a thin float and index demand can amplify price moves.
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