SpaceX Stock Whiplash And What Could Move It Next

SpaceX as a public stock looks like the future, right up until you try to price it. We open with the hard reality of volatility: a run from the IPO around the mid-100s to roughly 250, then a slide back near the low-100s. That swing forces a grounded investing question: what, specifically, drives value here over the next few years, and what is just narrative?

We break SpaceX into the businesses investors are actually buying. Falcon 9 launches look like the established engine. Starlink satellite internet is a meaningful revenue generator, but profitability and durability still matter if you care about valuation instead of hype. Then there’s the massive, long-dated bet on bigger rockets and a Mars timeline, which can be inspiring while still being very hard to underwrite as “near-term commercialization.” If you’re searching for SpaceX IPO analysis, space stock catalysts, or Starlink profitability, this is the framework we keep coming back to.

From there, we tackle the Musk wildcard: governance and structure. We debate the idea of combining SpaceX with Tesla, how voting control can tilt outcomes, and why constant reshuffling can feel like a shell game to shareholders who want stable expectations. We also connect the space thesis to something closer to cash flow: robots and autonomy. If self-driving data becomes the moat for humanoid robotics, does exposure become “defensive” even if you dislike the uncertainty?

Subscribe for the upcoming conversations on energy and Iran and where we are with AI, and if you listen, share this with one investor friend and leave us a review. What would make you buy SpaceX, and what would make you walk away?

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Transcript

Welcome And SpaceX Price Shock

Steve Davenport 0:26

Hello, everyone, and welcome to Skeptics Guide to Investing. I'm Steve Davenport, and I'm here with my podcast partner, Clem Miller. And today we want to talk a little bit more about this movement into the space, SpaceX, SPCX. , it's been a wild ride for the first couple of months here. , we went public somewhere around 133, 135, and we shot up to 250, and now we're back somewhere around 105- 108, and we're kind of asking ourselves, what's gonna move it? How is it gonna change? And was this and is this still a move into the future of markets to to try to learn how we can make money in space? Clem, are we gonna make money in space when we own SpaceX or is this just a rocket too far? Rocket too far.

Clem Miller 1:34

well, so I I think we've got a company here that has a very well-established business and it's Falcon 9 launch business. , it's got an up-and-coming business, Starlink, which still isn't making, I mean, it's a revenue generator, but it's not a profit generator like the Falcon businesses. And then it's got this atop of that, it's got this other business, which is very far from commercialization, which is these you know giant rockets that that Musk hopes will take mankind to the moon and ultimately some point in the future to Mars. And he's pumping a lot of the money that he earns from the Falcon 9 rockets into the development of the of the much larger of the much larger

SpaceX Revenue Today Versus Mars

Clem Miller 2:34

rockets. So if this were a more mature company, you know, one where you know he wasn't trying to you know become Flash Gordon going to the going to the moon and Mars, if this were more like you know, low Earth orbit and and then the the satellite launches, then I would say this is a great company to invest in. It would be more along the lines of sort of a space version of a defense company or an aerospace company, but he's got this this layer of of you know interplanetary, right? Which I don't see you know making money anytime in the near future.

Steve Davenport 3:29

Doesn't he also have isn't grok part of this? I mean he's got an AI component here, and he's gonna potentially add Tesla to this.

Clem Miller 3:41

well that that's what that's the problem, is that he tends to be kind of all over the place, right? I don't want to diagnose

Tesla And AI Merger Speculation

Clem Miller 3:52

him, right? But he tends to be all over the place with all of his ideas. And while he's a smart guy, you can never kind of pin him down on what he wants to do. and so you know, is he going to put pet Tesla in with SpaceX? I don't know. I mean, the whole idea of taking one giant company and and combining it with another giant company, even though you know they have the same control, right? I mean, what does that do to the shareholders in each company?

Steve Davenport 4:24

Does it don't have the same control though, right? Because the rules for SpaceX are more tilted towards must control. He he controls more of the voting shares of SpaceX.

Clem Miller 4:37

Yeah, but he also has a large voting share in Tesla, too. Yeah, I just don't think it's 88%. No, it's not the same, right? Right. So but what what happens at the end of the day when they combine the two? Is he gonna have is he gonna come out with more of the of the combined?

Steve Davenport 4:52

I think he's gonna have superior control from um from SpaceX, because SpaceX is the buyer, yeah, because SpaceX is was larger. I don't know if SpaceX falls below, right? But if SpaceX, I mean a smaller company can acquire a bigger company, and you know, he could it could still be the decision of the board to I mean, I assume he's doing this so that he can consolidate power. I mean, I think he's doing it trying to consolidate before the robots come out because he knows how much cash flow the robots are going to mean to his business, and that cash flow from the robots would help his SpaceX, yeah, you know, , in terms of giving it more liquid, more liquidity, right? Right. I mean, if you were an investment banker, you tell him, sure, take on, you know, something that has more cash flow because you can use the cash flow to help you where you don't need to borrow. I mean, that's what it appears to me to be is that this is you know a lot of things, but eventually, as we all know from GE and some of these large conglomerates, it eventually leads to selling the parts for better multiples than you're getting for the overall, right? Yeah, yeah. I mean, is that like will we have eventually five stocks, a robotic stock, an AI chip stock, um, an auto stock and a space Starlink stock and a you know a rocket stock. I mean, that's to me what I think of as the five pillars of Musk's future.

Clem Miller 6:41

Mean at the end of the day or in all in one company or all separate companies?

Steve Davenport 6:45

When they're all they're eventually going to become all of one company, and then I think as they evolve, I think they're gonna be spun off into four or five different companies because ultimately that will I mean maybe he will keep them all together because there's synergies. I guess how do you look at something like synergies in in a case like this? Do you think that the synergies that you can absorb would be greater with Tesla, and therefore you'd be interested because therefore you then have more assets to you know control as a as an investor? Or do you like specific knowledge and a focus of one area so that the management can focus on that one thing?

Clem Miller 7:33

I to it doesn't bother me to have conglomerates. That's what that doesn't bother me. What bothers me is this whole idea of moving things around sort of like a shell game, right? Move moving something , you know, having companies together, putting them together, taking them apart, putting them together

Conglomerate Synergies Versus Shareholder Risk

Clem Miller 7:57

again. That's fine if there's one owner or just a few owners. But if you have all these shareholders that have expectations about a company, came in under one set of expectations, and then all of a sudden, bang, there's a an entirely different company because of acquisitions or or merge, you know, mergers or divestments or what have you. that's not something that I want to be associated with.

Steve Davenport 8:30

I mean, I want to have isn't it like you got you got five companies for for one? Isn't it a deal?

Clem Miller 8:38

Yeah, but yeah, but you're assuming that maybe you're not, you're just testing me, right? Yeah, , you're assuming that you know you know, five ones equals five. That one plus one plus one plus one plus one equals five. And that's not necessarily the case. It could equal six. Well, I think it equals six or seven. It could equal three. It could, but seven or two. No, from not not from Musk's standpoint. From Musk's standpoint, five ones might equal seven or eight. But from an investor's standpoint, different standpoint. Remember, we're the we're there's musk and we're and who's who's got effective control, right? And then there's us investors who are along for the ride, right? Right. And whereas for him, the five different businesses might app might add up to you know six or seven given synergies, right? For us, he's exploiting those synergies. For so for us, combining five companies might end up with three, a synergy of three, right? as opposed to to six or seven. So or it could be that he could tear apart the companies, right? I mean, I don't know what he's gonna do, and that's the whole point. We do not know what he's going to do.

Steve Davenport 10:10

And we are he said he's gonna he's gonna take Tesla and and and combine it back, right?

Clem Miller 10:16

Well, that's what he's that's public knowledge as of the ITO. That's what he's talking about, but we'll see if that happens.

Steve Davenport 10:24

Well, I guess I don't know.

Clem Miller 10:26

I mean he talks he's talked a long time about Mars too, and that that's been in his documents until recently. Right. , so I don't know what you know what he's thinking. He changes his mind.

Steve Davenport 10:40

there wouldn't be any regulatory reason it wouldn't work, right? Because they're not competitive businesses that he's you know creating control over or something. Because there's not really other, I mean, there are other rocket companies, but they're very small. Smaller, yeah. Yeah, well, yeah, a lot smaller. I mean, do you do you see any kind of way that the government would reject that combination?

Clem Miller 11:09

I don't think this government would.

Steve Davenport 11:12

, so which is why he's probably gonna proceed with it sooner rather than later, meaning in the next two years versus in the third year.

Clem Miller 11:22

Well, let me ask you this. I'm gonna turn it back on you since you've been asking me, right? I kind of like this. I I definitely I definitely would not invest in SpaceX under the current conditions of uncertainty about where this is gonna end up. I definitely would not. How about you, Steve?

Steve Davenport 11:44

, I am

Would We Buy SpaceX Now

Steve Davenport 11:46

interested in the robots and their impact on society because I think there are a lot of people, elderly, and other people with needs who could really utilize a robot very effectively. And I think that there is um a huge market, just like we talked about for self-driving cars. I think there is a huge, huge market here, and I think that Tesla has a huge advantage because of all the computer information and data they have from self-driving of all of their vehicles. Now, all of their vehicles aren't full self-driving, but they have that self-driving feature. And so if 20% of the time a person uses self-driving, but there's 50, you know, I don't know how many millions of cars we have on the road with the technology to do some self-driving or driver assist. And if we did that, they've just got just like Waymo, I think Waymo has a huge advantage with all of the data they're gathering from all of these different cities. You know, what happens when the light changes on the right turn? What happens when there's a crosswalk or no crosswalk? What happened? Like they can look at the data and say, here are the here's when the accidents happened, and we can program to improve that. I think that other people are gonna have to learn a lot. Whereas I think that Tesla and Waymo are way ahead with all of their data. And I think that that data is gonna help them in the self-driving space, and I think it's gonna help them in the robotic space because whatever logic you do from a safety perspective for driving, I think if you think about a robot walking down the street, it's very similar to the driving algorithm, isn't it? You know, you you you walk behind this person and they slow down, you slow down, you know.

Clem Miller 13:48

Well, you know, you at many universities now they have those little pizza delivery robots. Have you seen those? Yeah, yeah, those are pretty cool.

Steve Davenport 13:57

I think that I mean, I think it's the future of climate. I think that when we we don't always calculate it or or characterize it as artificial intelligence, we clack characterize it as a little more finer sense of you know self-driving, meaning that the the car

Robots And Self Driving Data Moat

Steve Davenport 14:19

doesn't have the knowledge to solve a problem in differential calculus. It has the knowledge about whether to take a right-hand turn or go to the next form, right? And so it is a form of artificial intelligence, but I think it's gonna be like artificial intelligence 1.0, and then 2.0 might be robotics, and then 3.0 might be some type of a you know, a partner in terms of solving problems for you or helping you with you know complex um algorithms for you to develop. I think we're already on that one. We're on it, but you're you know, you and I know that there's a lot of garbage that's coming out of that. So I don't think we're on it, meaning that it's been solved. I think we're in the process of solving it, adding to our inference and all that stuff. But I guess what I would say is Tesla is sitting in the front of the, you know, the vehicle that is going to be using our artificial intelligence to make money. And in my mind, if that combined company is that entry point, I think you almost need to own it from a defensive perspective, right? When we bought Tesla, we bought it because it was added to the SP, so therefore it's part of our universe, and therefore it you kind of take penalty points every time it goes up because you don't own it, right? It's such a big component of that sector and a and a pretty big component of the index. And I think SpaceX is gonna get added. Maybe it buys Tesla and then it gets included because of its ownership of Tesla. I think that's another way that it could get in. But either way, we're gonna have a decision to make about owning it versus taking the tracking risk of not owning it. And you don't worry about those things because you just worry about no, but I think ultimately you will ask the same question, which is I want exposure to this, this, and this. What gives me that exposure? It's you know, it could be Google and Waymo, , it could be, you know, something else. But I think if it's cheap enough, and I would say somewhere around that $100 mark, um, is a discount from the IPO, which I think is it would be my requirement to have a discount to the IPO. Because I think the IPO was set up artificially at a higher number, and now it's approaching a number that's lower because I think realistically we didn't know enough in how we set the IPO price for SpaceX, in my mind, was improper, right? Having the owner tell you what the IPO price should be versus the investment banks determinant, I think is a you know is a function of this being a very limited, um limited decision making.

Clem Miller 17:24

I'd like I'd like to see, I'd like to see, because there's a lot of folks who are betting against SpaceX now. , I was just looking and the short interest is 2.14 percent. That's not extremely high. It's not even really high, but it's not it's not as low as I would like it to be. And so, you know, if we if I see SpaceX

Short Interest Signals And Sell Rules

Clem Miller 17:49

down like 1.5, 1.6, you know, that's definitely worth worth my consideration.

Steve Davenport 17:57

But what happens if you buy 1.5 and then six months later it goes to three? Well, I would sell it then. You would sell it just because of short interest, not because of what the price has done or anything else.

Clem Miller 18:11

Well, you know, even if something has short interest and goes up like 10-15 percent, then at that point I would sell, right? So, for example, you you know, Oracle has been all over the place the last few years, it's gone like way up, it's gone way down, it's gone way up. , there was a day where it was like up 15% or something like that. I wasn't gonna wait, I sold it, right? So as a kind of a general like sales rule in my mind, sell discipline rule. If I see something in one day that goes up more than 10%, I'm gonna sell it or sell a lot of it at least.

Steve Davenport 18:54

Yeah.

Clem Miller 18:55

, because I want to capture that and push put that into my cash.

Steve Davenport 19:01

Okay.

Clem Miller 19:02

I don't view, I don't view a a 10, 12, 15 increase in one day as necessarily being predictive of what's going to happen in the week or months afterwards, , in terms of you know further growth, right? I think if you got 10 or 15% in one day, the more likely scenario is that the following day or days it's going to go down.

Steve Davenport 19:47

Well, I think you have short covering as a reason for why stocks will spike. Yeah, right? Yeah. People will people will have to buy the deliver on their short and close it out. Yeah. So I think I think you're kind of um I I think the short interest would then decline. If there's if there's a large short covering, then all of a sudden it's up, and it's got we'll see.

Clem Miller 20:14

But you know, there's there's money that you can get right now if you buy if you sell at at up 10 or 15 percent. That's money you can get right now. And so I'm not going to I'm not going to lose out on the opportunity of getting that spike. Yeah, but I guess I gotta ask you. No, it's sort of like let me let me say this. It's sort of like gold last year. You know, I had a large position in gold, and when it started to go exponential on this, right, then I started to sell, right? And , and I think that's the right thing to do, right? When you look at a chart of a stock or of gold or what have you, and you start seeing not not you know, looking at not this, okay, but rather this, then that's where you want to sell, is up here because nothing goes exponential for a long time. Okay, and that's what gold was doing last year. That's what you know a few months ago, Sandisk and Micron were doing. , so yeah, I mean it was good while it lasted. When it was when it was like that, that was good, but when it got to be like this, that's when you sell.

Steve Davenport 21:37

Let me ask you one question on this, Phil. , how do you look at taxes and being in a short-term status versus a long-term status or being in a non-taxable account versus a taxable? Do those influence how much you need to get out of this?

Clem Miller 21:52

So I've got most most of this in in in retirement, in IRA, right? So so I don't really have to care about that.

Steve Davenport 22:00

All right. But I'm just saying for people out there that do, yeah, you know what I mean.

Clem Miller 22:05

I think well, for people out there, you know, obviously

Taxes Timing And Account Types

Clem Miller 22:08

that's a different story, and and you know, you do have to care about um you do have to care about selling things high. I mean, I mean, basically what you need to do is you need to figure out you need to balance off your sales and your and your purchases, right? To try to balance that off as best as possible.

Steve Davenport 22:31

Yeah, I mean, I just think that there's that you can sell it today, or if you wait two weeks, you get long term treatment. I think most people would say I'd wait. Long-term treatment. Exactly. But if I have to wait six more months to get long-term treatment, no, no. , I'm not sure that's the case, but then it depends on how much of a gain you had a gain not because of the last few weeks of gold, it had been a nice run from when you acquired it almost a year ago, right?

Clem Miller 23:01

Yeah, exactly. It was I made a lot of money off gold, and then and then, but the run was ending, you could see it go exponential, and that was you know, that was it, right?

Steve Davenport 23:13

Okay, so you put the you know the the scre the screws to me on whether I would buy or spell SpaceX, and I said I would buy.

Clem Miller 23:21

Are you are you are you ever a buyer if it if it merged with I I would say that if it gets down to like 1.5-ish on short interest, I would consider buying it, yeah.

Steve Davenport 23:34

Okay.

Clem Miller 23:35

And is it but I even though I'm nervous about all the you know, I think I think all the the the informed investor nervousness about SpaceX would be embodied in that short interest ratio.

Steve Davenport 23:50

Okay, and does anything um Musk just got a $1.6 billion contract from the US defense industry and force and he's now committed $100 million to this midterm election? Do you think that his influence in this election, he spent $250 million in those key states last time to help Trump win? Does his $100

Politics Distraction Control And Wrap Up

Steve Davenport 24:22

million tell you that he's not as engaged? It's not as important as a presidential election, or does it tell you anything about how SpaceX should be considered? Do you think his influence is greater, the same, or less than it was, and therefore we should say he's gonna have another couple of years of really good times, or is he is he is he saying something by not committing as much money as he did? He also didn't commit that money to Republicans, he said for his candidates, candidates he supports. Which I thought he's created a party, didn't he?

Clem Miller 25:06

You know, I think I think that Musk and Trump probably have learned that they shouldn't be connected at the hip. That's gonna be my guess. I think I think both of them look back at the whole Doge experience and say, well, that was that was a fun ride, but ultimately it was dumb. I that's how I think they both probably look at it. even if they may not admit that. So I mean it's certainly a distraction on Musk to do all that. so how significant is this? Well, you know, he's got so much money that that this this isn't a a significant I mean it's significant, but it's not it's not a huge expenditure for him. also we don't know.

Steve Davenport 26:09

But my question would be why wouldn't he put the same amount if it's been so successful?

Clem Miller 26:14

Yeah. And also, I don't know that he's gonna actually spend it all, right? You can announce something without actually spending it. so I don't know that you made the point about multiple parties, candidates from multiple parties. , I think you know he's acting like any other um you know, ultra-wealthy billionaire donor would do now. He's it's not too much different than what other ultra ultra mega well mega wealthy but billionaire donors would do.

Steve Davenport 26:48

He is kind of though a 250.

Clem Miller 26:51

He was way ahead of the Krotz brothers and way ahead of other billionaires that you know are they're not at his level, but um all I'm saying is I would love to see him do I would love to see him do what a Bloomberg or or somebody else does and and start giving back to society rather than spending on campaigns.

Steve Davenport 27:15

I would too. I mean, I think he's I don't know where I would say he is in his career. Do you think he's at his peak, or do you think the peak will come when we get to the autonomous cars and robots and further on into SpaceX? I think he's two or three years away from peaking, personally. But I don't know.

Clem Miller 27:38

Well, supposedly he doesn't sleep, so he's gonna need to get more sleep, that's for sure.

Steve Davenport 27:44

Well, might be overrated, you know. If you're on the good stuff, you know, maybe maybe be an opposite and a good better alternative, you know. All right, is there anything else you want to say about SpaceX? No, I think we're fine on that. All right. , I just add that I think it's something we continue to follow and continue to try to understand. I still have a problem with it in terms of the amount of musk ownership in terms of voting control. But um, if we all are gonna say that this sedan is unique and therefore he has further upside than the average you know CEO, I think I still say that. And so therefore, I'd say he probably deserves some of this premium. But I think the premium is a little large, and I'd like to see it a little less, and also see more assets with better cash flow, which I think comes when Tesla gets integrated. So thanks everybody. Thanks for listening, and , we're gonna have two other podcasts coming out soon on energy and Iran, and also where are we with AI? So listen up and we appreciate your support.