Scott Galloway, a New York University professor, tech analyst, and bestselling author for The New York Times, recently stated that SpaceX's stock is trading far above what it should be worth, and even a significant decline from its peak has failed to make it an attractive investment.
In a podcast released on Monday, he said SpaceX's stock is worth between $10 and $30 per share. As of the close of trading on Tuesday, the stock fell 1.98% to $143.34.
"The valuation of this stock is still too high," Galloway said. "I think the value of this stock should be in the $10 to $30 range."
His highest valuation implies the stock is currently trading at nearly five times what he believes it is worth; his lowest valuation suggests the shares are worth about 7% of their current market price.
SpaceX's initial public offering was priced at $135 per share, valuing Elon Musk's rocket company at approximately $1.8 trillion. The stock subsequently climbed to $225 before falling about 45% to $123. Since then, the price has recovered somewhat and has been trading above its IPO price over the past week.
Galloway believes SpaceX's valuation has been partly driven by unusually favorable market mechanics. Initially, only about 4% to 5% of SpaceX shares were available for public trading, creating limited supply. He also noted that SpaceX's inclusion in the Nasdaq 100 index spurred demand from funds tracking that index.
"Musk will go down in history as the greatest engineer of our time, but he is a financial engineer," Galloway said in the podcast.
He also questioned whether investors should view SpaceX primarily as a rocket and satellite company. Less than two weeks after going public, SpaceX issued $25 billion in bonds, even though the company had previously disclosed cash and cash equivalents of $100.8 billion. The company said the funds raised would be primarily used to repay a bridge loan.
Galloway said this bond issuance indicates investors are betting on AI infrastructure related to SpaceX's launch business, and that future expansion will increasingly rely on borrowing.
Galloway is not the only one expecting further stock price declines. Hedge fund manager and former Fidelity fund manager George Noble previously stated that SpaceX and Tesla are "the two best short companies in the market."
Noble predicted SpaceX's stock price would fall 50% by year-end and also criticized the company's rapid inclusion in the Nasdaq 100 index.
"Grandma's 401(k) now owns a $2 trillion company, valued at roughly 90 times revenue. That's insane," he said.
Noble said the stock prices of both SpaceX and Tesla should be around $30 per share. He believes the high valuations of both companies, social media hype, and an increasingly challenging economic environment make them highly attractive short targets.
Despite the low valuation, Galloway said he would not short SpaceX's stock. He believes Musk's followers and his ability to excite investors with new projects could drive SpaceX's stock price higher, regardless of the company's fundamentals.
"I wouldn't touch this stuff," Galloway said, adding that if Musk announced another ambitious project, such as "quantum computing on the moon," it could become a meme stock and surge once again.
