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Greetings fellow regards.
I present you with my rambling Michael-Burry-style market prediction.
# SpaceX the space launcher
SpaceX. A highly-renown space launcher years ago, perhaps as far back as a decade ago. A company that built rockets and built them well, phasing out "old space" companies that served the US government at ludicrous prices and thus earning itself contract after contract after contract. Arguably ignited a new space race with its advancements and achievements, to date having about 700 launches and 99.5% success rate (depending on who counts it and how). It is still ahead of pretty much any space launcher by a decade's worth of a moat and will continue getting contracts from the government. It also started producing and launching its own satellites, dubbed starlink, which in 2025 generated \~$11.4b revenu of which \~$4.4b was profit. Overall, a great business so far. People were outright buying TSLA as a way to "get exposure to SpaceX".
Then it started producing Starship, a *\~5000ton (11m pounds)* vehicle that many argued could never even fly, and yet it does. It is so unprecedented and groundbreaking, it is expected to create a market through unlocking new possibilities that no one knows about yet. Cost of production supposedly costs \~$100m but the theoretical reusability if they ever manage to make their engines stop malfunctioning and properly *very very gently* land these 5*000 tons (11m pounds)* without slamming them into a surface could lower the cost of launch significantly. So this theoretical achievement with its theoretical market could theoretically be worth a lot of money.
# SPCX with all its merged/acquired entities valuation throughout the years
https://preview.redd.it/8v5gvljc0qgh1.png?width=277&format=png&auto=webp&s=51a4a845d93c75460566073a00f9c2e54f327fe4
[admittedly the graph's straight lines are a bit misleading but it does provide a nice sense of scale](https://preview.redd.it/j7124tul0qgh1.png?width=3026&format=png&auto=webp&s=fe98a8a163cfd3cca90e4b00e85bf952ca733ff5)
Other important dates are $350b in December 2024 and $800b in December 2025.
The merger with xAI valued xAI at $250b and SpaceX at $1T, this was in February 2026. In the 4 months later the combined entity's valuation jumped by $500b.
Something to pay attention to is that this company was valued at $36b in 2020, $100b in 2021 and 180b in late 2023. These are the times one could argue it had a reasonable evaluation by current market standards. Now, some of you might accuse me of throwing this out on pure vibes but I'm more writing down what seemed to be the general sentiment I've seen among space stock communities, and this is despite Starship's first launch in April 2023 when it violently exploded 4 minutes after liftoff.
To be fair, rocket science is difficult and notorious for its delays and first launches tends to fail.
But the reason I titled the post this way and what my DD revolves around is that this has long since no longer been a company valued on its space launch capabilities. They are, ultimately, just an enabler. The market for launch exists but there's only so many companies that want to strap millions' worth of cutting-edge technology to tons of explosives trying to reach hundreds of miles/kilometers in the sky. Not that it can't be useful, but if something goes wrong your investment is just *gone* and even if it reaches orbit there's quite a bit of time until it pays off the investment. And most need far more than a satellite or two.
So the truly important thing is the potential market. What CAN you do with the ability to send Starship's claimed 150 tons (330k pounds) to orbit? Well, so far you can take pictures of Earth. And telecommunications too, internet and mobile service. There are some novel concepts trying out things, such as manufacturing in 0 gravity or bioengineering in 0 gravity or other interesting stuff but those are slightly less theoretical (as in, proof of concept works but scale is questionable) as what Elon Musk decided to be the core of his business. AI data centers.
# SPCX is an AI company
And here, after the lengthy exposition necessary for understanding the company, is where I reveal the core of my thesis. This is now an AI company. It bought xAI with its grok models and Collosus 1 and 2 data centers housing hundreds of thousands of high-end Nvidia GPUs and that was already valued as a significant part of its valuation it the sham contract that could've said anything as it was agreed between Musk and Musk. Internal investors were almost certainly dangled promises of the direction and plans of the company to invest more money in it. With this in mind it starts to make a bit more sense how exactly the valuation of the company exploded from $100b in 2021 to 180b in 2023 and then $350b in 2024 followed by $800b in 2025. The AI craze was going full tilt, after all. And it's good to remember that while the valuation skyrocketed from private investments, it's not like the company itself got hundreds of billions.
They got about... $5b since 2020. Suddenly starts making sense why they wanted to IPO and raised money shortly after the IPO, doesn't it? The company's assets themselves are valued at \~$100b right now and you have to remember a lot of that is hundreds of thousands of high-end GPUs for xAI's Collosus data centers that can cost $50k each, with some claims of them selling for even higher. GPUs that get rapidly devalued every time a better GPU gets released. Let's not forget the data centers as a structure, and all the cooling and what not also cost in the billions.
We know SpaceX is renting out their datacenters' capacity. Which means they're not using it for grok, which despite its great name ~~stolen~~ inspired from Heinlein's "Stranger in a Strange Land", is not nearly as great of an AI. You don't hear much about grok, you hear mostly about ChatGpt, you hear about Claude, you hear about Deepseek. If you're a bit more into it, you might also hear Kimi, GLM and Qwen. It's not that you don't hear about grok. But it's not particularly standing out either. They even made an AI waifu in lingerie out of it to try to get more attention and it's still not particularly popular.
So, what is the business plan to profit? Space datacenters. Taking ridiculous amounts of sensitive hardware or hardware manufacturing hardware to space and making datacenters there.... barely reasonable, on purely theoretical grounds. Let's say you just *somehow* achieve that. Then you somehow build these massive datacenters *in the vacuum of space*. How do you disperse the massive quantities of heat they generate so they don't melt themselves? You can strap the typical closed-loop cooling systems *that already exist on Earth* to them and that's cool and all but how do you vent the heat OUT of the system. There is no *air* to transfer heat. There is no water, or soil or gas *anywhere* that the cooling itself can exchange that heat with. It can't dump infinite amount of material from the very much finite datacenter either. SPCX's supposed solution is supposedly converting it to infrared light. This is, obviosuly, horribly inefficient. Depending on how much heat they're actually venting the size of the radiators emitting the heat as infrared light range between *several football fields in size* to *larger than most cities on the planet*. Yes, *several football fields* is the *low estimate*. As you can imagine getting all this to space weights ... a lot. And it has to work, and it has to be maintained and in a few years all those GPUs will be obsolete. There's also other tiny problems like actually powering it. They're genuinely making a business plan based on constructing something the size of a city (at least in terms of square area) in space as a *prerequisite to become profitable* under *improved in comparison* to the current market conditions.
# SPCX stock sentiment after IPO
I've seen it. You've seen it. Everyone has seen it.
There are those that are/were interested in buying the shares. A lot wanted to get in and get out when the initial rally dies off. And it turned out to be a good play, it shot to \~$225. There's plenty of people who bought or are buying because they think it'll be the next TSLA.
But you've also seen the skepticism. Those who think it's massively overvalued. Those that refuse to even touch it. Those who short it. Those whose mention to anything related not even to SpaceX but to Musk himself is always vile.
Musk had a rather big reputation and has had one for quite a while but while it was polarizing to most, it has shifted towards a significantly more negative sentiment in the past few years. DOGE was not nearly as useful as promised, he pretty much lost any respect from any gamer who so much as heard about his gaming stream, his raised hand gesture to the public is still circulating, he got on the administration's bad side, his promises for TSLA have been running for over 10 years with barely anything promised actually delivered, he "scammed" investors in various ways, particularly notable how the xAI merger triggered milestones related to that gave Musk a lot of shares for "becoming a $1T company" and in general has gained a bit of a "scammer" reputation in the finance world even before this.
TSLA merger. Almost certainly what Musk wants, as he no longer has sole discretion over it, while he does in SPCX. Practically not possible. SPCX is a US national security interest/concern. TSLA has a major market in China and a potential merger makes it a China national security interest/concern. The merger is so impossibly unlikely, which isn't to say Musk mentioning it on the earnings call can't have a temporary positive effect on the price of either stock, that rumors appeared that TSLA might sell or in another way divest itself of its chinese holdings. Musk denied this but who knows. Either way the point is it's not happening.
#
# AI bubble
If you haven't heard of it then you live in a cave. Everyone has heard this *could* be a bubble. Some argue that since it's a good technology it can't be a bubble. Those people haven't read the history of the railway bubble or the dot com bubble, to name a few of the most obvious ones. So, really, it's not a question of whether there's good AI companies because the bubble exists anyway. And with SPCX being valued as a AI company it's a part of it. And as the first AI company to IPO with several rules bent for it and the largest IPO market cap in history it is in the eyes of literally everyone with even a remote interest in the stock market and plenty that don't even have that interest.
Meanwhile, record AI hardware profits are being posted left and right with over a trillion dollars revolving in that circlejerk, making up a significant % of the US economy's GDP by simply being moved around with one contract or another as a promise for future spending.
And despite that, KOSPI had dropped \~40% in the past month or so. Yes, it rallied 18% on Friday. That's good right? Right?
Wrong. KOSPI is an index. Until pretty much 2026 it was moving at 1.0% to 1.5% /day. In 2026 it averages about 6%/day. Now it moved 18%/day. If you still don't grasp why this is significant, try to imagine a market in which SPY moves 18%/day and what that would mean. If I had money in SPY and it rallied 18% I'd be shitting myself out of fear what the next day will bring. Could be +18%. Could be -18%. Where could it be in a week? Could be +100%. Could be -100%. Who the fuck knows at that kind of volatility? Yes, it's heavily dominated by a few companies, with Samsung and SK making \~50% of it and the top10 making up \~63% of it. But while that is indeed not quite the same as US market, US market's top10 companie are still \~38% of it so it's not like the parallel doesn't exist. Nvidia or Apple being down 40% in a month and moving 18%/day would still be a "everybody panic" type of thing imo.
I don't think it'd be too much to say the AI and AI-related stocks are being kind of weird right now. And I think SPCX is the reason. Maybe they aren't, but importantly it can't be proved that they aren't and that matters because it's not just me that might reach this conclusion, it can be some fund with billions in AUM.
You're already seeing and if it drops further you will almost certainly see even more news articles casting doubt if the AI bubble is popping or has popped, what it means for other AI companies and so on.
SPCX has dropped over 50% from its peak in less than a month. The AI craze is not there for it. And soon we have catalyst after catalyst after catalyst on the stock price.
[straight from SEC official documents: https:\/\/www.sec.gov\/Archives\/edgar\/data\/1181412\/000162828026042639\/spaceexplorationtechnologi.htm#id286866c4c474ba490d6531a57db9e93\_1392](https://preview.redd.it/mx170p81oqgh1.png?width=515&format=png&auto=webp&s=5ec0d14f3dcd7c24a95950273e5d09097ed642cd)
So, finally, here's what I think and my positions. There are massive amounts of justifiable fear, uncertainty and doubt about SPCX but they go far beyond SPCX itself. They're doubt in its management, doubt in AI, doubt in the bubble, doubt in the administration's position on it, doubt in the public sentiment towards Musk's timelines and promises. Due to how prominent it is, it *is* and *will be* used as a gauge towards the AI bubble. Musk IPO-ed because the company is burning through money and they need more of it, after failing to come up with a more grounded business model for income that will fund them. They structured the lock-up expirations on the assumption they can do another TSLA where investors will be happy to slowly sell off their shares as the price is solidly in the green compared to IPO but what they have created instead is a year-long chain of "why would I buy now when there's so much more selling on the horizon" to any investor who spends even 10 minutes looking up what they're buying. And the profits the early investors are sitting on probably go as high as +10 000%, making it virtually impossible that no one will sell and we're already looking at -3%/day and they're going to increase the publicly-traded float by +150% just 2 days after the earnings call scheduled for August 4.
As a result, not only do I predict SPCX will have a massive sell-off in the near future that might very well last for months, with some short-covering inbetween, but it might actually pop the entire AI bubble and take down all markets with it.
So my positions are some puts dated to january 2027, capturing a significant number of the lock-up expirations. I've also included some other bearish positions of some interest, given the broader prediction I'm making.
https://preview.redd.it/maozzrl5wqgh1.png?width=840&format=png&auto=webp&s=c7accd9a6cf6178691ac1c15b4d34f15265d5a29
https://preview.redd.it/8jg4tes0uqgh1.png?width=826&format=png&auto=webp&s=a1e0eed99b1ff1b894d99e58d3e9854536d42bc9
I'm also considering buying some far OTM calls for SPCX, because while I consider it very likely all this will materialize in at the very least a significant sell-off on SPCX, it not materializing will conversely mean massive relief at the unrealized fear, making it rocket to the skies so I might pick up some cheap bull call spreads. I can't even imagine the possibility of the stock trading flat.
I'm afraid of NVDA puts at the moment but they're definitely something I'm keeping an eye on for the not-so-distant future.
# Exit strategy
Vibes. Well, not really, if the stock is moving at \~2%/day even after 10 trading days after the earnings call then the thesis is almost certainly invalid. Otherwise, so long as the volatility is high there's a decent chance it plummets at any point. I have strong directional conviction but a volatility play for lower profit is fine too.