Scott Galloway says SpaceX’s stock is trading far above where it should be, and even its sharp decline from its peak hasn’t made it an attractive investment.
The marketing professor and investor said on a podcast released Monday that SpaceX shares were worth between $10 and $30. At Monday’s close, the stock was trading at $146 per share.
“It’s still crazy overvalued,” Galloway said. “I think this is a $10 to $30 stock.”
His upper estimate would mean the shares were trading at more than five times what he sees as their value as of Monday. The bottom of his range would imply they were worth less than 7% of their current market price.
SpaceX did not immediately respond to a request for comment.
SpaceX priced its initial public offering at $135 a share, giving Elon Musk’s rocket company a valuation of roughly $1.8 trillion. The stock subsequently climbed to $225 before dropping about 45% to $123. It has since rallied slightly and traded above its IPO price for the past week.
Galloway argued that the valuation was driven partly by unusually favorable market mechanics. Only about 4% to 5% of SpaceX’s shares were initially available for public trading, limiting supply. Its inclusion in the Nasdaq-100 also created demand from index-tracking funds, he said.
“Musk will go down as the greatest engineer of our time, but as a financial engineer,” Galloway said in the episode, which was recorded before SpaceX’s first quarterly earnings in early August.
He also questioned whether investors should view SpaceX primarily as a rocket and satellite company. Less than two weeks after its stock-market debut, SpaceX priced a $25 billion bond offering, even though it had disclosed $100.8 billion in cash and cash equivalents. The company said the proceeds would primarily be used to repay a bridge loan.
Galloway said that the bond sale showed investors were buying into an AI-infrastructure bet attached to SpaceX’s launch business, with future expansion increasingly reliant on borrowing.
Another Musk bear sees trouble
Galloway isn’t alone in expecting further declines. George Noble, formerly the manager of Fidelity Overseas Fund, told Business Insider’s Samuel O’Brient that SpaceX and Tesla represented “two of the best shorts in the market.”
Noble, who predicted SpaceX would fall by as much as 50% by year-end, also criticized its rapid inclusion in the Nasdaq-100.
“Grandma’s 401(k) now owns a $2 trillion company at roughly 90 times revenues. That’s outrageous,” he said.
Noble said both companies should trade at roughly $30 a share, implying 79% downside for SpaceX and a 91% drop for Tesla. He argued that their high valuations, social-media hype, and an increasingly difficult economic backdrop made them compelling short targets.
Despite his bearish valuation, Galloway said he wouldn’t short the stock. Musk’s following and ability to excite investors with new ventures could propel SpaceX higher regardless of its fundamentals, he said.
“I wouldn’t get near this thing,” Galloway said, adding that it could become a meme stock and surge again if Musk announced another ambitious project, such as “quantum computing on the moon.”
