Jeremy Grantham, co-founder of the investment behemoth GMO, has cast doubt over the future success of Space Exploration Technologies Corp (NASDAQ:SPCX).
Grantham predicts that the SpaceX IPO could potentially become a future joke, despite the high expectations surrounding it. He shared his concerns on Morningstar’s The Long View podcast on Wednesday and questioned the ambitious goals set by SpaceX in its prospectus, including its aim to extend human consciousness to the stars.
“In 50 years, they’ll be telling and writing stories about SpaceX, and they’ll be quoting you paragraphs from the prospectus, and you will be laughing at it.”
The investor also discussed the impact of fast-tracking large IPOs, stating that it has directly affected SpaceX’s performance. He explained that this could lead to a surge in demand, potentially driving up the price significantly.
“In the end, the reality will come out, and this will turn out to be, of course, one of the landmark historical events…It will be amazing, by the way, if it doesn’t collapse, because it will need such massive developments on AI that our entire lives are totally different.”
Grantham warned that despite the possibility of a higher price justification becoming a reality, such a world would be “strange.” He stated that this “rather horrific” outlook is less likely than a crash, but either way, it would be historically significant.
Bullish Bets Defy IPO Skeptics
SpaceX shares closed at $148 on Wednesday, remaining below their $150 IPO price for a second straight day. The company joined the Nasdaq-100 on Tuesday, less than a month after its June 12 market debut, prompting index funds and ETFs tracking the benchmark to purchase its stock.
Analysts suggested that the hype surrounding the Invesco QQQ Trust (NASDAQ:QQQ) was overdone. JPMorgan estimated that SpaceX would have a 1.3% index weight in the NASDAQ 100, placing it behind Tesla Inc. (NASDAQ:TSLA), which sits at 3.2% of the benchmark.
Morningstar estimated that even under optimistic scenarios, SpaceX would likely account for only 1% to 2% of the Nasdaq 100, far below heavyweight constituents such as NVIDIA Corp (NASDAQ:NVDA), Apple Inc. (NASDAQ:AAPL) or Microsoft Corp (NASDAQ:MSFT).
However, in a perspective that contrasts with Grantham’s, JPMorgan expects SpaceX to grow revenue at a 91% annual rate through 2030, driven not by increased rocket launches but by broader business opportunities built on its launch infrastructure, according to analyst Doug Anmuth. According to Anmuth, launches are simply the foundation for a much bigger business.
SPCX Price Action: On a year-to-date basis, SpaceX stock declined 7.88%, as per Benzinga Pro. On Wednesday, it fell 0.81% to close at $148.26.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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