SpaceX and Tesla Inc. CEO Elon Musk has responded to investor Ron Baron’s prediction that SpaceX could become the most profitable and valuable company of all time. Musk’s response came after Baron outlined his thoughts on SpaceX, stating that the company would become the “largest, most profitable company on the planet.”
SpaceX To $30 Trillion?
Baron believes that SpaceX, which will initially be valued at “less than $2 trillion,” will go on to become worth “$10 trillion, $20 trillion or $30 trillion.” He also stated that SpaceX officials think he is “lowballing it [the valuation].”
Musk responded to the prediction on social media, saying “Ron is smart.” This comes amid criticism of the company’s valuation, with some experts valuing SpaceX at $780 billion, approximately half of the touted $1.75 trillion valuation.
Expert Opinion
NYU Stern professor Aswath Damodaran, a top-tier expert on valuations, has stated that he would be avoiding the SpaceX IPO, citing concerns about the $28.5 trillion total addressable market (TAM) listed in the company’s IPO prospectus.
S&P 500 Drops Rule Change Plan
The S&P 500 index has announced that it will not be adopting rule changes that would have allowed SpaceX an expedited entry into the index. The proposed rule changes sought to change profitability and free float requirements, as well as proposed trimming the stipulated 12-month period before public companies can be listed on the index.
Market Expectations
The SpaceX IPO is highly anticipated, with the company targeting a $75 billion raise and planning to sell over 555 million shares at $135 apiece. The valuation of SpaceX remains a topic of discussion, with some experts predicting a high valuation and others expressing caution.
Key Points
- Ron Baron predicts SpaceX will become the largest, most profitable company on the planet
- Elon Musk responds to the prediction, saying “Ron is smart”
- SpaceX valuation estimates range from $780 billion to $30 trillion
- NYU Stern professor Aswath Damodaran will be avoiding the SpaceX IPO
- S&P 500 index drops plan to adopt rule changes that would have allowed SpaceX an expedited entry into the index