{"id":9968,"date":"2026-07-01T00:40:03","date_gmt":"2026-07-01T00:40:03","guid":{"rendered":"https:\/\/www.fintechpulse8.com\/?p=9968"},"modified":"2026-07-01T00:40:03","modified_gmt":"2026-07-01T00:40:03","slug":"galloway-drops-grim-take-on-spacex-ipo-danger","status":"publish","type":"post","link":"https:\/\/www.fintechpulse8.com\/?p=9968","title":{"rendered":"Galloway drops grim take on SpaceX IPO danger"},"content":{"rendered":"<p><\/p>\n<p>SpaceX went public on Nasdaq on June 12 with a $75 billion raise and a valuation that eclipsed every initial public offering in history.<\/p>\n<p>The stock surged 19% on its first day of trading, closing at $160.95 and briefly trading near a $2.25 trillion intraday valuation before paring gains to finish with a market capitalization of about $2.1 trillion, CNBC reported.<\/p>\n<p>If you were among the investors weighing a purchase during the post-listing frenzy, one prominent voice had a pointed warning.<\/p>\n<p>NYU Stern professor Scott Galloway argued in an analysis published by Prof. G Media that SpaceX&#8217;s $1.75 trillion target valuation had &#8220;no anchor.&#8221;\u00a0<\/p>\n<p>His central argument was direct: not one investment bank on the deal could identify a clean public comparable to justify the asking price.<\/p>\n<h2>SpaceX\u2019s bankers could not find a valuation peer<\/h2>\n<p>At $1.75 trillion, SpaceX was set to trade at roughly 94 times trailing revenue on $18.7 billion in annual sales, Galloway noted.<\/p>\n<p>That valuation is far higher than any company in the S&amp;P 500. Even Palantir Technologies, the index&#8217;s most richly valued stock by price-to-sales ratio, trades at about 67 times its annual revenue.<\/p>\n<p align=\"center\"><strong>Related: SpaceX gets brutal verdict from legendary Wall Street investor<\/strong><\/p>\n<p>The company\u2019s underwriters tried Boeing, AT&amp;T, Palantir, GE Vernova, and Vertiv as potential peers, but none fit cleanly, Galloway explained.<\/p>\n<p>To bridge the gap, bankers told investors that SpaceX\u2019s total addressable market is $28.5 trillion, roughly equal to the entire United States economy.\u00a0<\/p>\n<p>That estimate includes $22.7 trillion in projected enterprise application revenue, about 30 times larger than the current enterprise software market, Galloway noted.<\/p>\n<h2>The 30% retail allocation raised red flags before SpaceX listing<\/h2>\n<p>Typical initial public offerings reserve 5% to 10% of shares for individual buyers, with the bulk going to institutional investors.\u00a0<\/p>\n<p>SpaceX set aside as much as 30% of its available shares and distributed them through Robinhood, Charles Schwab, Fidelity, SoFi, and E*Trade, the analysis stated.<\/p>\n<p>Galloway read the oversized retail allocation as a sign that institutional buyers were not willing to absorb the full deal at the requested price.<\/p>\n<p><strong>More SpaceX:<\/strong><\/p>\n<ul>\n<li><strong>Elon Musk sets SpaceX IPO price in blunt message to Wall Street<\/strong><\/li>\n<li><strong>Veteran hedge fund manager makes a brazen SpaceX bet<\/strong><\/li>\n<li><strong>Franklin Templeton CEO sends strong message on SpaceX<\/strong><\/li>\n<\/ul>\n<p>He argued SpaceX was counting on the same retail enthusiasm that has powered Tesla shares for years to sustain a valuation with few precedents.<\/p>\n<p>He compared the dynamic to Saudi Aramco\u2019s 2019 debut, which held the previous record for the largest offering at a valuation of roughly $1.7 trillion, Bloomberg reported.<\/p>\n<p>Aramco shares have declined about 13% from the offer price, the worst total return among the 10 largest global IPOs, according to The Motley Fool.<\/p>\n<figure>\n<p>                        <img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.thestreet.com\/.image\/NDA6MDAwMDAwMDAzMDk3NDgz\/photo-3097483.jpg?profile=rss\" height=\"675\" width=\"1200\"><figcaption>SpaceX\u2019s unusually large retail IPO allocation raised concerns that institutional demand fell short, signaling potential valuation risks before trading began.<\/p>\n<p>Spencer Platt&amp;sol;Getty Images<\/p>\n<\/figcaption><\/figure>\n<h2>Starlink shines, but xAI spending drove SpaceX\u2019s $4.94 billion loss<\/h2>\n<p>SpaceX generated $18.7 billion in revenue during 2025, reflecting 33% growth over the prior year, according to the company\u2019s S-1 filing.\u00a0<\/p>\n<p>Starlink, the satellite internet division, accounted for roughly 60% of that total and served more than 10 million subscribers as of early 2026.<\/p>\n<p>Nicolas Owens, equity analyst at Morningstar, warned in a research note that the xAI acquisition may ultimately harm SpaceX more than it helps.<\/p>\n<p>&#8220;We think long-term investors eager to participate in SpaceX&#8217;s future endeavors and potential success will have opportunities to do so with more margin of safety than the initial offering is likely to provide,&#8221; Owens said.<\/p>\n<p>Starlink delivered $1.19 billion in operating income in the first quarter of 2026 at a 36% margin, making it a genuine standout among growth businesses.<\/p>\n<p>The consolidated numbers tell a different story, as SpaceX swung from a $791 million profit in 2024 to a $4.94 billion loss in 2025, The Motley Fool reported.<\/p>\n<p>Of the company\u2019s nearly $21 billion in capital spending last year, $12.7 billion went to AI infrastructure, exceeding its spending on rockets and satellites combined.<\/p>\n<h2>Nasdaq\u2019s fast-entry rule could trigger forced buying of SpaceX stock<\/h2>\n<p>Galloway also raised concern about a structural change that he said benefits insiders at the expense of everyday index fund investors.<\/p>\n<p>Effective May 1, Nasdaq slashed its Nasdaq-100 seasoning period from roughly 3 months to just 15 trading days for the top 40 companies by market capitalization.<\/p>\n<p>Nasdaq confirmed on June 26 that SpaceX will join the index before the market opens on July 7, less than a month after listing, Yahoo Finance reported.<\/p>\n<p>J.P. Morgan estimates the inclusion could draw about $4.3 billion in passive inflows as Nasdaq-100 ETFs and index funds, including the Invesco QQQ Trust, mechanically rebalance into SPCX before the open on July 7, Reuters reported. <\/p>\n<h2>The bull case rests on SpaceX having no equal peer<\/h2>\n<p>Not everyone shares Galloway\u2019s bearish view, and some analysts contend the absence of a clean peer validates the thesis rather than undermining it.\u00a0<\/p>\n<p>Alphabet had no search competitor at its debut, and Amazon lacked any peer for its e-commerce and cloud combination, 24\/7 Wall St. analyst Eric Bleeker argued in a rebuttal to Galloway.<\/p>\n<p>Both companies now carry multi-trillion-dollar valuations, and the inability to find a peer at listing turned out to reflect genuine uniqueness rather than overpricing.<\/p>\n<p>NewStreet Research initiated coverage with a $165 price target after the debut, making it one of the more optimistic early calls on the stock. <\/p>\n<p>James Ratzer, a senior analyst at NewStreet, told CNBC that SpaceX holds \u201cat least a 10-year lead\u201d over competitors in launch capabilities.<\/p>\n<p>The SpaceX valuation debate is far from settled, and both sides bring credible evidence to their respective positions on the stock. <\/p>\n<p>Galloway\u2019s core warning to retail investors remains clear: When no one on Wall Street can justify the price, latecomers absorb the steepest losses.<\/p>\n<p align=\"center\"><strong>Related: The SpaceX $17 billion spectrum buy finally makes sense<\/strong><\/p>\n<p>#Galloway #drops #grim #SpaceX #IPO #danger<\/p>\n","protected":false},"excerpt":{"rendered":"<p>SpaceX went public on Nasdaq on June 12 with a $75 billion raise and a valuation that eclipsed every initial public offering in history. The stock surged 19% on its&hellip; <\/p>\n","protected":false},"author":1,"featured_media":9969,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[246],"tags":[4489,647,7506,11847,2040,1843],"class_list":["post-9968","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-popular","tag-danger","tag-drops","tag-galloway","tag-grim","tag-ipo","tag-spacex"],"_links":{"self":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts\/9968","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=9968"}],"version-history":[{"count":0,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts\/9968\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/media\/9969"}],"wp:attachment":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=9968"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=9968"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=9968"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}