Chanos questions SpaceX's valuation: $19 billion in revenue, a valuation close to $2 trillion—this is a "dream ratio"!

Renowned short-seller James Chanos slammed SpaceX's upcoming IPO, directly pointing out that its valuation is severely detached from fundamentals, characterizing this highly anticipated listing as a speculative feast driven by "hopes and dreams."

On June 11, according to Bloomberg, at the iConnections Global Alts conference in New York, Chanos said bluntly:

"We are about to see a $75 billion IPO, with an implied valuation close to $2 trillion, and the company's revenue is only $19 billion, with negative free cash flow. This is a thorough 'hope and dream' IPO."

He believes that SpaceX's current high valuation reflects investors' enthusiasm for Musk himself and the artificial intelligence narrative, rather than solid financial performance.

This IPO is seen as one of the most watched stock listings in recent years. According to a previous article from Wallstreetcn, SpaceX's subscription soared to $250 billion, nearly four times the oversubscription. However, Chanos's doubts directly target the core of market sentiment: When the bull market assigns a premium to promises, are investors paying too much for a future that does not yet exist?

Discrepancy in valuation multiples, far exceeding Tesla

Chanos directly contrasted SpaceX with Tesla to highlight the high valuation.

He pointed out that Tesla maintains a high market value due to expectations around self-driving, robotics, and artificial intelligence, currently with a price-to-sales ratio of about 14 times. SpaceX's IPO corresponds to a price-to-sales ratio of about 90 times, "an entirely different magnitude."

This comparison reveals that the premium given to SpaceX already far surpasses Tesla's pricing logic. Chanos believes SpaceX's high valuation largely relies on a series of future businesses still theoretical, including space data centers, lunar manufacturing, and other projects tied to Musk's long-term vision.

"The potential market size for space is unlimited," he said. "You can craft any story—Mars colonies, lunar factories, space data centers—to back up this valuation."

Despite his sharp tone, Chanos did not announce an immediate plan to short SpaceX stock, but he expressed clear skepticism about the IPO pricing.

He said the current core business, represented by the Starlink satellite internet service, might support a valuation of "hundreds of billions" of dollars.

"The question is, does the remaining $1.5 trillion have value," he said. This implies that in his framework, the vast majority of SpaceX's current valuation is built on future expectations yet to be fulfilled.

Space data centers: Technically feasible, but hard to justify economically

On the recently hot topic of space data centers, Chanos offered a clear rebuttal. He acknowledged that such projects are technically viable, but stressed that they face major economic and operational obstacles, including launch costs, maintenance challenges, insurance requirements, and the need for large amounts of redundant facilities.

"Equipment in data centers can fail at any moment," he said. "If this happens in space, you can't just send a technician up with spare parts to fix it."

He also pointed out that SpaceX's Starship rocket is critical to lowering launch costs and achieving many of the company's future goals, but so far it has yet to prove sustained orbital success.

Chanos examined SpaceX's IPO against the broader market backdrop. He thinks this listing is a typical manifestation of the current market's willingness to bet on distant possibilities while ignoring present economic reality.

"Bull markets assign premiums to promises, bear markets discount reality, and right now, we are clearly in the former."

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