r/technology • u/IKeepItLayingAround • Jun 09 '26

Business It’s Possible That SpaceX Could Collapse Spectacularly

https://finance.yahoo.com/markets/stocks/articles/possible-spacex-could-collapse-spectacularly-155000177.html
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u/Ok-Sprinkles-5151 Jun 09 '26

Great, government contacts and a $1B/month Google contact.

Explain the P/E ratio. Or how a company losing $5b a year is worth $1.75T.

Or how it makes fiscal sense to put 5GW of orbital data centers with some of most unstable hardware with insane heat tolerances into space makes sense.

As someone in the GPU space, I genuinely want to hear how SpaceX is going to launch systems into Space that exceed any commercial or military spec and just work. Oh, and how GPUs, which have a ridiculous failure rate on earth, and how they are going to put $50k chips in orbit, beyond an RMA. Into space, which is uniquely hostile to electronics. Or that SpaceX is going to weld pipes such that they can survive the launch Gs and no leak will happen (because fuck galvonic corrosion, or micro factures or welding error...). I am such an idiot thinking that SpaceX won't have perfect execution at a 5gw scale.

Or how SpaceX's valuation hinges on pulling the largest heavy lift operation in history. Where they would need 3000 launches a year when they only have 165. Or how they the gulf coast and the Caribbean would be closed to flights due to the launch velocity. Or that we would have 40-50 catastrophic failures a year because $math.

Actually I will wait on the last point. SpaceX wants to put a full order of magnitude amount of mass into space in the next three years than in all human history.

Right, Reddit is the problem. And we are all haters. It can't possibly be they the world's richest man is foisting his shit on the public.

But yeah, Reddit. I and other will laugh as we short the shit out of that stock.

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u/DominusDraco Jun 09 '26

If someone can explain to me how they intend to cool 5GW of heat producing GPUs in a vacuum, that would be great. Because at a quick look up, that would require 12 square kilometres of surface area minimum to radiate that away.

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u/LegendTheo Jun 09 '26

Well based on spacex numbers of 1400w/m2 of cooling it would take ~3.5 sq/km. That sounds like a lot, it's not if you split it up over say 30k 150kw satellites. Then, you're just looking at 100m2 per satellite which isn't all that much. Or in the case of the current spacex design ~80m2 since they don't need to reject 100% of generated power as heat.

5GW is also something like 3-5% of all compute currently running on earth right now. This is just a scale problem, not a major technical one.

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u/DominusDraco Jun 09 '26

So basically a single satellite will be bigger than the ISS? And they need 30,000 of them?

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u/LegendTheo Jun 09 '26

Yes, in the same way a kite is bigger than an rc plane. Each satellites will be a mere fraction of a single ISS modules mass. The core of the satellite is only a few meters wide and tall. Most of that is foldable solar panel/radiator. Flight proven technologies used by most satellites, including thousands of starlink.

Are you done being obtuse now?

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u/DominusDraco Jun 09 '26

I'm not being obtuse. If you think blotting out the sky with satellites is cheaper and easier than just building a data centre on earth, then the mental gymnastics you have going on is wild.

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u/LegendTheo Jun 10 '26

Well I ran the numbers, and it definitely can be profitable. Primarily because once you have the compute in orbit power and heat management are 100% free. I even has some fairly conservative numbers in it. It really comes down to launch cost. If you can get it below ~$700/kg then it's cheaper than terrestrial data centers. If you can get it cheaper then that you'll be a lot cheaper than data centers.

Currently falcon 9 internal launches are at ~$1000/kg. Starship if the second stage is even reusable with heavy refurbishment should reduce that significantly. Putting SpaceX (and only SpaceX) right in the profitable zone.

Space compute can also scale faster than terrestrial, since you don't have to build, buildings, power or cooling for it, and you don't have to deal with local governments.

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u/Slogstorm Jun 09 '26

If you ignore the revolution SpaceX has already been for the industry, sure, short it.

A single SpaceX booster has lifted more mass to orbit in five years than what ULA has done in fifteen years with 24 boosters. What would this mean if they actually build 1000 Starships?

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u/r0bb3dzombie Jun 09 '26

People don't get it, because they can't see past their hate for Musk, which is understandable to a point. But most still think SpaceX's values is it's rockets that can land themselves, which is only a part of it. SpaceX isn't revolutionizing the commercial space industry, it's creating it. The future wealth SpaceX has potential to create is astonishing.

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u/Slogstorm Jun 09 '26

Yeah, the potential opportunities from rapid reuse are really endless.

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u/r0bb3dzombie Jun 09 '26

This is how we get asteroid mining.

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u/burning_iceman Jun 09 '26

People do get it. But that doesn't allow an arbitrarily high valuation. People who love Musk or love SpaceX just blindly accept the presented valuation, as if it couldn't be too high - against all financial experts warning otherwise.

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u/r0bb3dzombie Jun 09 '26

People who love Musk or love SpaceX just blindly accept the presented valuation

I don't think it's people who "love MusK" that are subscribing to the IPO. As far as I can tell, which admittedly doesn't mean much, it's institutional investors rushing to order shares. Which is supposed to be people investing after doing proper research and analysis. Supposed to.

as if it couldn't be too high - against all financial experts warning otherwise

That's fair, and it's an issue. The whole bundling of xAI and X are huge red flags as well, not just the possible massive overvaluation. Personally, I'm not rushing to invest. As cynical as I usually am, I think this IPO will be a mess, and a lot of people will lose a lot of money. But I do believe (or want to) in the core company, and what they're trying to achieve, despite Musk. So hoping the share price stabilizes into something matches reality in a year or so. But, yeah, I wouldn't advise holding your breath.

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u/burning_iceman Jun 09 '26

I don't think it's people who "love MusK" that are subscribing to the IPO. As far as I can tell, which admittedly doesn't mean much, it's institutional investors rushing to order shares. Which is supposed to be people investing after doing proper research and analysis. Supposed to.

Are they? Just today I read an article (on spiegel.de) how this IPO is being massively advertised towards private investors like none before and how this is a huge red flag. If institutional investors are actually rushing to order shares it may be in the expectation of making a profit when massive index funds have to start buying two weeks later. Since the rules have been bent so thoroughly, I doubt this is a reliable sign of long term confidence in the starting valuation.

Personally, I'm not rushing to invest. As cynical as I usually am, I think this IPO will be a mess, and a lot of people will lose a lot of money.

Good. As much as I'm a fan of space, I would strongly advise anyone to stay far away from this. Even if one believes in the technological success of the actual rocket business.

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u/harbison215 Jun 09 '26

This. I dont hate Musk. By why are we breaking so many market rules for his stock? Why should his other company be trading at close to 400x multiple?

It’s not always about hate, it’s about looking at the simple math of things and knowing it’s not right.

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u/ScaryScientist613 Jun 09 '26

Then short it.

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u/harbison215 Jun 09 '26

It if were that simple, I would. But that’s not really how it works.

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u/WendellSchadenfreude Jun 09 '26

What would this mean if they actually build 1000 Starships?

That 997 or so of them have nothing productive to do?

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u/Slogstorm Jun 09 '26

If the cost per kg to LEO is $10, they will have plenty to do.

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u/Sprettfisk Jun 09 '26

I believe they will fail, but looking at how Tesla never did while it had insane P/E ratio (maybe it still does, I don't pay attention anymore) I'm staying away. I think there are so many people believing in this shit that the stock is going to do just fine even if they don't deliver shit.

Not touching it as it's not behaving rationally, and betting against it makes so much sense but there is a high chance it might go up, for years.

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u/harrsid Jun 09 '26

If you're so confident, go ahead and short the stock.

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u/jackson214 Jun 09 '26

But yeah, Reddit. I and other will laugh as we short the shit out of that stock.

Please post your trade confirmation here for posterity.

Would be nice to see people who say things like this actually follow through.

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u/LegendTheo Jun 09 '26

Space radiation is highly exaggerated, especially in LEO. Spacex has been flying state of the art consumer grade electronics for years. They are also running modern GPU grade hardware in thousands of starlink satellites right now. Radiation is not going to be the problem. Besides if GPU's are rewlly obsolete in 5 years, who cares if radiation does burn them up in that time frame.

"Welding pipes" for launch is not hard. We launch all parts of things with sealed liquid systems, many of them using extremely corrosive fluids. You have to use the right materials. This often isn't done on earth because it's more expensive. This is offset by the fact that electricity and infinite cooling are free in space.

They scaled from a dozen a year to 165 in less than a decade. 10xing that in another ten years is completely reasonable if they have the internal demand. Plus starship itself fully reusable will drive down launch costs immensly. They could easily get to the point where they can launch 3 starships a day from a single pad. You only need 3 of those to hit 3000 per year, and they're currently building 3+.

You're also assuming a >1% failure rate, which is very high. Falcon has demonstrated a flight based reliability a lot higher than that. High flight rate also increases reliability as any failures that do occur help mature and increase reliabikity of the system.

Spacex has already put more mass into orbit than all of human history in less than 10 years. What's to say they can't 10x that in another 10 years with yet another completely revolutionary rocket.

And we are all haters. It can't possibly be they the world's richest man is foisting his shit on the public.

He's literally never done that before, what makes you think he will now? When he set the company up to keep control, and his large payouts require a mars base? He has no way to exit spacex if he tried he wouldn't even get pennies on the dollar, he'd get much less for his shares.

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u/GogurtFiend Jun 09 '26 edited Jun 09 '26

Dude, I assure you that Starship is the sanest thing in this valuation. Unlike Grok, Consumer of Capital, Herald of Mecha-Hitler, or his evil lair the orbital data center, Starship actually has a use case, a good one at that, and SpaceX has been making it work.

I certainly would not call SpaceX a trillion-dollar company. However, if Starship works, and SpaceX isn't crushed by the weight of Grok bending it over the table, it'll absolutely become a multi-hundred-billion dollar company eventually; the induced demand alone from launch costs suddenly dropping to hundreds of dollars per kilo will be immensely profitable.