Financial Times: SpaceX IPO Highlights Musk's Narrative Crafting Ability, but $1.78 Trillion Valuation Requires Real Cash Flow Validation

06/04 17:20

On June 5, the UK Financial Times published an article stating that the most notable aspect of the SpaceX IPO is the difficulty in assessing what the company will become in the next 10, 5, or even 2 years, which may be the state Musk intends to present. SpaceX confirmed on Wednesday that it is seeking a valuation of $1.78 trillion, which, if achieved, would make it the seventh-largest company by market value globally. However, the path to support this valuation is unclear. In February of this year, Musk merged SpaceX with xAI, making AI suddenly the most important business for SpaceX. Previously, SpaceX's core goal had been to make humanity a multi-planetary species; now, AI dominates the company's plans, with xAI contributing over three-quarters of capital expenditures in the first quarter, and 93% of the addressable market in the prospectus being AI-related. Musk is adept at continuously reshaping the narrative of his businesses according to market preferences. Previously, SolarCity was integrated into Tesla and rebranded as a renewable energy group, and Twitter later combined with xAI. Currently, SpaceX supports the xAI deal with a narrative that combines rockets and AI, aiming to surpass competitors by deploying AI data centers in space. However, SpaceX launched approximately 2,200 metric tons into orbit last year, while Musk stated that to participate in the orbital data center business, the company would need to launch 1 million tons annually. While SpaceX's rockets and Starlink satellite communication network are indeed significant achievements, Musk's true strength lies in crafting narratives. It is also noted that ultimately, real cash flow will remain the key to validating the valuation.

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