A highly anticipated SpaceX IPO is on the horizon, and it could make Elon Musk a trillionaire, rewarding private shareholders of the space company, including Gerber Kawasaki CEO Ross Gerber. Gerber plans to sell his SpaceX shares due to the extreme valuations being assigned to the company.
SpaceX IPO and Elon Musk
Gerber, who has been viewed by some as a Tesla Inc critic, assures that he is only a critic of Musk, not a villain. When asked if Musk will keep his promise to give Tesla shareholders early access to SpaceX shares ahead of the IPO, Gerber thinks this promise may come true. “I think he will,” Gerber said. “I think he will give anybody access to these SpaceX shares at $2 trillion.”
Valuation Concerns
Gerber believes the valuation may be “outrageous” based on a company doing around $20 billion in annual revenue. “How in God’s name is it worth so much money?” he questioned. The wealth manager owns SpaceX stock thanks to investing in Twitter with Elon, which has doubled or tripled in value. However, Gerber notes that Twitter, now known as X, is likely worth substantially less.
The Future of SpaceX
Gerber questions the math of the new valuation for the combination of X, xAI, and SpaceX, which are all one company after several mergers. “Finance is kind of like gravity. Eventually the forces of economics happen and so investors who invest in SpaceX at $2 trillion will need it to be worth $4 trillion to make a decent return,” he explained.
What Happens After SpaceX IPO
At a $2 trillion valuation and rising valuations of private companies, Gerber can’t help but question if there is a bubble ready to pop, saying it could be “one of the biggest bubbles” he’s seen in a long time. Once companies are public, they have to put up numbers, and Gerber uses Netflix as an example. The company beat analyst estimates for revenue and earnings per share, but the stock fell because guidance was a little light.
Plans for SpaceX Stock
Gerber plans to sell at least half of his SpaceX stock once it’s public. The wealth manager said that Gerber Kawasaki is also working with some SpaceX employees and advising them to cash out. Some investors and employees may have to wait months to cash out of their SpaceX shares, which could create concerns of valuation crashes months after the IPO. “So when this six-month mark hits, there’s a tsunami of private equity that wants to cash in on their 10x, 100x returns,” Gerber warned.