SpaceX is either the greatest investment opportunity in a
generation, or it's the most expensive mistake you'll ever make.
Most people think it's a no-brainer. Elon Musk, rockets, Starlink,
the future. But is it just all hype from
an investment standpoint? Because SpaceX just filed for
its IPO, its initial public offering, where it initially offers shares
to the public. That's what IPO stands for. So the window to
understand this opportunity is closing. My name's Lloyd Ross, multiple
seven figure entrepreneur and investor, and I've helped thousands of everyday Australians
to pay off debt, invest, build assets, and real wealth.
And in this video, I'm gonna show you exactly how the
SpaceX IPO works, how to access it,
what it means as an investment for you, and whether it belongs in your
portfolio or not. All right, so let's dig straight into it. Is
SpaceX a good idea? And the reason we're doing this episode is
because, of course, when incredible companies like SpaceX
go to list on the stock exchange, it means we, the public, can buy legal
equitable ownership of pieces of the business. That's what shares are.
They're a share of a business. And what a business, right?
And not in terms of the financials necessarily, but what it can do or
what it's doing for human civilization. I would
say there are few companies that are going to
have an impact on the civilization to the extent that SpaceX is. It
could, it's like the, it's like General Electric, it's like
light bulb. This is one of the most incredible industrial
developments of our race, of
the humankind, right? It's that important. Because not
too long ago, before Elon really spearheaded this, like a freak, after he sold
PayPal for, well his share of PayPal for 300 million, he literally put, I
think half into Tesla, And then he put half into SpaceX,
the two most hardest things, rockets and electric cars, and
has had tremendous success in both amongst other things. So this
is a guy who means business, right? And the reason why he spearheaded that is because he discovered
that the reason we haven't gone to space and back to the moon, etc., and
kind of moved into that realm is because it's extremely expensive to launch rockets.
The reason being is not just the fuel cost, of course, but it's actually the fact you've
got to rebuild the rocket once you use it. And so it's like having a commercial
airliner like a Boeing 747, and you fly to, say, London
to New York, and then you get to New York, and then you've got to just throw the plane out.
Like, could you imagine how expensive tickets would be if you had to do that?
But that's what happened to space effectively, right? So, what
he discovered through development of the Raptor engines, development of
the rocket design, and of course, as we know, the
ability to bring it back to Earth and land it, whether it be in the ocean, on a
pad, or on land, or even
tweezers, because the Starship, which is the largest flying
object ever created by mankind. He brought it back to Earth
and caught it in these, you know, this docking bay, which is effectively two, like,
two big steel tweezers. And they did it the first go, which is amazing.
But if you've been following Elon's journey with SpaceX, it's been very incredible to
watch, very inspiring, of course, and great for civilization. Okay,
so they've been able to cut rocket development and redeployment cost
by 90%. So it really cuts, cut the cost of
going to space by 90%. The third launch was
where it was either, they had enough money for the third launch and if that
had failed, they would have been game over. And they
did it. So we were a breath away from not having this. And
it may have set civilization back a long way. So thankfully, God
was in our corner, or in Elon's corner, and it happened. Then
they were able to bring it back to Earth, which is crazy, right? So now, I think
he's launching rockets all the time. Bang, bang, bang. So he's really commercialized
Space, right? He spearheaded that. And
so as part of that process, they developed these offshoots too, you know,
like it made putting satellites into orbit cheaper.
It enabled going to the space station cheaper. He recently just rescued
people who were stranded in the space station. It's just being
able to access space a lot more affordably has created
other industries like, you look at Starlink, which is effectively a
series of satellites that just put internet down to the earth through a Starlink device
anywhere, which is amazing. It's connected remote
communities like never before. It's connected people during war. It's connected people
during disaster. It by itself has been a byproduct of
the success of SpaceX, right? There's like, I think there's 9 million subscribers
now in Starlink alone, so he's got these other Businesses
that have you know? Developed off the side of it, which is completely
changing how we live right Starship is
the is is purported to be the vehicle that takes us
to Mars, and it seems like now That's an actual real or
so what's that is very audacious is now becoming more measurable and
achievable right so you can see that SpaceX is changing
the arc of human civilization period right
But here's where the conversation changes
when you start to consider it as an investment. So
before I jump into the numbers and just talk about what it looks like,
I have to explain this to you. This is
not the first industrial revolution we've experienced, okay? So
you have these new technologies adopted and we
have this rush to develop it, compete with it, whatever it
might be, because, you know, people don't realize this, but SpaceX has competitors. Blue
Origin is a big competitor and Jeff Bezos developed that company out of the
profits from Amazon and they also launched to orbit. So it
already has competitors. It's not the market owner of the entire
market, okay? Because when there's profits to be made, you
can bet your bottom dollar there'll be competition. So
when there's an industrial revolution, I want to give you an example. When railroads
became the, oh my god, I can't believe we can cross America in this time frame,
in this locomotive. This is mind-blowing. It's like going to
Mars. It's like, whoa, right? So that's happened. And
so when you look at the industrial revolution, certainly industrial developments,
there's a bubble scenario that happens where a lot of capital runs
to that area for fast investment returns. There's this
first mover advantage that happens. So the railroad is
developed. And you could even say that United Pacific Railroad
is one of the first few that was opened by Lincoln in the 1800s.
But all of a sudden, there was like 200 railroad companies joining the fray. And
of course, when you invested in railroads, in stocks, a lot of
people lost a lot of money. Because just because it's good for civilization doesn't
mean it's good for your portfolio. The same can be said for airplanes. When
the Wright brothers lifted off, I think it was in 1906, thereabouts, They
lifted off and created flight for the first time. Now, fascinatingly, 60 years
later on the moon. Incredible developments. But, if
you had invested into airlines back then, there was so many different airlines
developed and competed with, that if you had to put your money in there, the chances
you went bankrupt are extremely high. It was almost probably 100%. Because
airlines are an awful, awful investment for return on
capital. They burn through capital. They don't generate additional
capital returns. Railroads, airlines,
motor vehicles. There were in early 1900s when motor vehicles
were adopted commercially and horses became, you know, obsolete.
There was 200, 200, 200 car manufacturers in the United States alone. And
guess what? There was two. And one went bankrupt in
2008, which is GM. There was one, which is Ford. It's the only one left. So
you had to pick one in 200, right? So this is what
happens when there's an industrial bubble. And this will continue
to happen. The dot-com bubble happened with internet companies. You could say the
same thing is happening in the crypto markets. You could say the same thing in
the AI space right now. It's a wash with capital because
people, they mistakenly think that new and
innovative is good investment, and that is absolutely
not correlated, just so you know. Because I gave you the examples, how
you put your money in those things, you're lost, right? So that's
important for you to understand, right? Just because it's new, doesn't
mean it's a good investment. They're really clear, right? So let's
have a look now at SpaceX, the business, because if we're going to
assess whether it's good for our capital to buy shares in this business, we
have to understand the business. That's what you've got to do, right? So let's
have a look. 2024 revenues of SpaceX around about, call
it $13 billion. Last year, 2025, about
$15 billion. I believe now in 2026, it's probably
around $20 billion. I'm just giving you some highlights here
so you can understand why. it's not really worth,
I haven't really taken the time to invest deeply because it's not worth my time because it doesn't tick
the boxes at all for me to deploy capital for investment. So I'm not
gonna waste my time. But I am gonna explain a couple of things that makes it
an automatic no, okay? Doesn't mean that people
aren't gonna do it, but I just wanna showcase for you how quickly
you can identify, ah, it's just out of my remit, yeah? Because
you don't have to swing at every pitch, as Warren Buffett says. You wait for the fat pitches
come down and swing at what you understand, what you know, and what's gonna scale over
time into the future, so you don't have to make decisions on when you should sell. And
that's the real guts of how good quality investing, certainly how
I do it, and how others like Buffett have done in the past. So,
here we go. It earns about 20 billion. in revenue, that's
top line sales revenue, okay? And the
current private valuation, they say is around 800 billion,
okay? If you were to buy
it privately now. The IPO target, so when a company IPOs,
an investment bank underwrites the shares and underwrites the offering, and
then goes to the public through the exchange and attracts attention
to get investors to put their money in to then basically give
money to the owners. Because when a company IPOs, like SpaceX, Elon,
who owns I think all of the company, well, doesn't own all of it, Google owns some of
it, et cetera, there's some private investors that have added
equity capital to the valuation, but he owns a lot of it. So when he
sells to the marketplace on an exchange, he's actually exiting. He's
exiting a portion of his ownership of the business. He's
selling a percentage ownership, and it might be 40, 50, 60% of the company or
more, He's selling that
to the public and he's taking the money in return. Does that make sense? He's
actually selling a portion of his ownership to the public. That's how it works. He'll
retain ownership and a lot of owners retain 20% or whatever
it is of their company. So they've got ownership and control. They want to own more than 20% to
exert control at the board level. generally. So that's
how it's an exit from the private equity. And it's also
a way to capitalize the company with the new
proceeds. So when they sell part of the company, they get cash in
return. And let's say an IPO is 1.5 billion. Sorry,
1.5 trillion, which is what they're estimated it's going to IPO at, and some even say
2 trillion. You say, okay, well, they've sold X amount,
say 50% for 2 trillion, they've got a trillion in cash, just
bang in the company. Like, now we can really expand, now
we can build multiple Starships, now we can do this, now we can get more stuff, now
we can invest in the company. So then they take those funds and they
start to then deploy that to grow the business. This is how Private
companies become public companies, and this is why they do, so they can grow. They're
taking capital from the public to say, guys, we're on mission here,
we've got this great opportunity, give us your money and we'll grow. Now,
as a shareholder, do you think that
at $20 billion of revenue, that SpaceX's
valuation of $2 trillion is fair and equitable? Do
you think you're buying a business that's undervalued? Do you think it's a business that's
going to last? And the reality to these questions is, one, We
don't yet know or can see what the net income of this business
is going to be. We also don't know in the next 10, 15, 20, 30, 50 years
if it's going to exist. We just don't know these things. This is so difficult to
determine. The reason why the $2 trillion market IPO
estimate is around is because people are pricing
in that SpaceX is going to
be the absolute market leader, dominate the
market position of space travel and space logistics and
the income that that type of market share
can generate, just from that business alone, they're obviously saying
that's going to be a lot. And they want to own a piece of that. And
I know it makes sense, it does. It's like, wow, that's amazing. But let's understand this
for a second. At $2 trillion valuation, It's
like, what's that? A hundred times? A
hundred times sales. You
know, to put that in perspective, don't beat
me up in the comments for this, but we have a laundromat business, I've mentioned it before. We
bought that for 1.5 times sales. So our earn back on
a revenue standpoint is 1.5 years. And earn back from sales
to valuation of this company, if it IPOs at
2 trillion, is 100 years. That's on revenue, not even on
earnings. If it's on earnings, it could be 100. So the
public is, or the market is anticipating that this company will
generate profits so high that they
still think it's a good deal even at $2 trillion. Does that make sense? So
let's put a gauge right on the ground here. Let's understand
what they're asking for and
what the opportunity is. So here you have, in the
investing world, you have your capital, your money, and you have
all these opportunities in the investing universe, different types of assets. Whenever
you invest in one thing, you say no to another thing. And the whole objective
of investing is to buy a bush that
has some birds in it, you hope, and what's the likelihood
that you're going to get the birds out? Bird in the hands, worth two
in the bush. That's investing. The
challenge with SpaceX is we don't know how many real birds and net income are going to
come out of the bush and we don't know when. And we don't even know if the bush is going to be around. Who knows?
It's a new industry, right? Let's look at a bush that's
been around for, say, 20 years. or
thereabouts, and let's look at the birds in that bush, let's
look at the valuation of that opportunity that you can buy today in the marketplace, and
let's then assess where your money is better spent. Here's
the example. Investing is best done when you compare
two things with each other. Should you put your money here or here? So
let's look at Meta. Meta is obviously the
company that owns Facebook, Instagram, and WhatsApp as the core apps. They've
got three billion people or subscribers to their apps, and
they generate a tremendous amount of free cash flow and run by Mark Zuckerberg,
okay? So one of the most profitable companies ever built. And
owner led, founder led, and by all accounts, yeah, generating tons
of free cash flow. Selling for a very reasonable price, right? So have a look at this. 2025 revenue
for Meta, 200 billion, okay? So
we have SpaceX, 20 billion. Meta,
200 billion in revenue. 10 times more revenue. SpaceX
valuation upon IPO is between 1.4, 1.5 to
2 trillion. Meta, current
market cap, if you bought the whole company, currently selling on the exchange, you can buy shares
in today, 1.45 trillion. So if you look at
that very closely, Both 1.45 trillion, roughly
1.5 trillion. One's got 20 billion revenue, one's got 200 billion
revenue. Which one
are you buying? Does that make sense? SpaceX
more or less earns 13 times less revenue than Meta, and SpaceX is
roughly valued at the same price. That's what we're trying to understand here, okay?
And what's interesting about that is we know, we
already know that Meta generates income. We know it generates return
on capital. We know that it's a proven product. We know that it's already got
competitors. We know that those competitors haven't killed it. We know it
doesn't rely on contracts from NASA. It relies
on payments from the public for its advertising business and
its subscription-based businesses. And it's got a lot of untapped potential in
its WhatsApp enterprise, etc. And it's proven to
be able to pivot when things got hard. So
we have a very, we have a proven bush with birds in it
that we know how many birds are coming back. We have that. So that's our option. You
either buy Facebook for seven times revenue or do
you buy SpaceX for whatever it is, huge amounts of multiples of revenue.
Like which one do you buy, right? And so that's
the, that's how you ought to assess investments. And
I think a lot of people are gonna treat the SpaceX investment because
of the excitement and this, image in
their head that, oh, they're going to own space, or I want a piece of it. It's going to compel them
to overpay for something that they don't
really truly know the value of. Because generally with IPOs, the objective of
the investment bank, too, is to pump up the price and get maximum
price. They want to sell those shares at a maximum price. Very
much similar to when you buy a car. They want to sell that new car to you
at the highest price possible, even though when you drive it off, it's worth half, whatever. It's
the same. So generally speaking, not always, but
IPOs are notorious for selling
shares to the public for the company at an extremely
high nosebleed valuation. That's almost
criminal. Just so you know. Some
examples of where that's happened and I've seen it happen and I've even suggested not
doing it to people just in passing and they still do it. I'll give you a
few examples here. When F45, and I know
these companies are different to SpaceX, I understand, but it's the same emotional
reaction. When I was doing F45, I said, you know, Jim,
if you don't understand what an F45 studio is, it's fitness, group fitness. It's
one of the first group fitnesses to scale. It IPO'd. Right,
it went IPO and I think they IPO for 600 million and
the shares at the time was selling for $17 each. It IPO at
$17 a share and one of the trainers was like, I bought shares, I bought shares,
did you buy any shares? I'm like, I wouldn't touch that with a 10-foot pole. Like,
why not? I'm like, I work here as well, I love the code. Like, you
don't understand IPOs, like you just got ripped off. And then now if you
go and look at F45 shares, there's 6 cents. You
went from $17 to 6 cents, they're never gonna get their money back. So
this is a very good way to lose money. If you wanna throw money on the fire and burn it, go and invest
in IPOs. And I, same thing can happen with GoPro. And
so my brother-in-law said, I think I'm gonna buy shares in GoPro. I'm like, why? He goes, because I use
GoPro, I love it. I was like, ah, I probably wouldn't do that. He's
like, okay, cool, I'll take that on board. And he didn't, which is great because I think it IPO'd at,
I don't know, it was like $200 a share. Now it's like, I don't know what it is now, I think it's two. I
think it's just like a hundred times less and you're never gonna get your money back. And
there's countless examples of that. If
you even went into call to chat and said, what's the percentage of people that really make,
generate long-term returns from IPOs? This is not a great deal, okay?
Just quickly, if you're ready to take control of your finances but feel stuck on
where to start, I have a solution. My book, Money Buys Happiness,
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link in the show notes and let's get your money working for you. Now back
to the episode. So is SpaceX an effective company for
civilization? Yes. Does it make money? Yes. Will
it continue to prompt profits in the future? It looks like it will. There's a high
likelihood, but we don't know. Starling a great business? Yes. Will it
continue? Probably. To what extent? We don't know.
Right. So there's just a lot of unknowns.
And what we definitely know is that if we don't know those things, then
how do we really know if it's worth $2 trillion as
a whole company? And the alternative argument
to this question is, well, Lloyd, it's got almost supreme market
share. It's run by the craziest, most intelligent, flippant entrepreneur
of all time. It's got a ton of investment from
people like Google, et cetera. I think Google owns 7%. It's
likely to print. I'm like, sure. But what do the competitors look like
in the next 10, 20 years? What is the return on capital of those investments they
make? Because if you think about what they're going to spend money on, rockets, fuselages,
missions to Mars stuff, it's going to burn through a ton of capital. So
this company might rely on multiple share
raises, so where they can sell more shares. And just
doing that all the time to afford this mission to Mars is
going to dilute the current shareholders more and more
and more and more. Because if they keep selling more shares and more shares to raise more capital to
burn to get to Mars, which they look like they're going to, there may
not be a commensurate return for you, but also you're going to dilute the current shares that
are outstanding. There's going to be so many of them. So you could see this $2 trillion
valuation, it may not fall, but certainly with dilution it
may not also grow. So you may keep your money in there for quite a long period of
time until there's good long-term net profits and it really commands and owns
its market space. It's very difficult to know, which
is also why It doesn't really
get my attention to deploy capital because there are
too many unknowns. And I want to impart this lesson to you.
The objective of investing is not to punt. There's this
great metaphor that Warren Buffett uses. He says, he's
not looking for 10-foot bars to jump over. Meaning
he's not looking for something very complex like this to figure out. What
he's looking for is one foot bars he can step over.
So an example would be he's looking for say, let's go throw this up there,
a company that's worth a trillion that's selling for
a hundred billion. He's looking for a company you can buy, where
they've mispriced their real estate assets, and you can get it for free. He's
looking for basically to buy dollar bills for 50 cents with no risk. That's what he's
looking for. And he did that recently with these Japanese companies.
He bought them for, you know, probably a third of
what they're worth, if not more, and they've been around since 1850. He's looking
for that, because he's looking for certainty. and
he's looking for certainty at a cheap price. And this is the
opposite of that. There's a lot of uncertainty and a very rich price. So
this is the opposite of what Warren Buffett, the greatest investors
ever lived, does. And I think that just imparting this
wisdom to you will help you understand why this
type of thing doesn't get my attention, but also why it
does get a lot of people's attention, because they get emotionally brought
into the mission, they want to be part of it. And they see a chance
to make considerable amounts of profits in the future. And they have seen that happen in Tesla,
even though Tesla is about Hunt
100 it's probably you know 20 times overvalued It
really shouldn't be at the valuation. It's a it's like a the peer multiples about
200 which means it takes 200 years to earn back its its market cap
and income and They've but they've seen that this is cult following with Elon where
the public doesn't care they just pumping money into the stock price and
I think that the house cards will fall on that at some point and
That's a very difficult investment journey to go on because
you're trying to ascertain the future with
a crystal ball and you can't, and you're going to watch this stock price go up and down
and it's going to send you insane and you're just not going to find this rhythm in
building capital. Just out of my experience, okay? It's
not a new story. This has happened before. It happened with Cisco in
2000, as I said, with the dot-com bubble. It happened with railroads. It's happened with cars. This
is an industrial evolution for
humankind. It doesn't necessarily dictate good idea or
good way to certainly compound my capital. The
same can be said for many, many other examples that I won't go into. So
what we have to understand is, is it a good company? Yes. Is
it a great company? Yes. Is it insanely good for humankind? Absolutely. Is
it a company that's really set up for good investment? I
don't think so. So you can be 100% right
on a good company, but you can be 100% wrong on
whether it's deserving of your capital. Does that make sense?
So let me finish with this question. Should
you participate? Should you bother? This
is why you watch this channel, to get an idea of really what
goes on with why don't I touch that, right? So here's my
absolute honest take on it, right? I personally don't
touch IPOs, period. It's just a rule. So I don't even
consider it. So like when there's an IPO, I go, stripe IPOs, this IPO,
that, doesn't matter. It just doesn't even, it doesn't
make it through that first litmus test. So straight away, boom, right?
And you can look at other things and say, well, Google owns and so forth. Well, if you want to have some
exposure to SpaceX, what you could do
is you could hold Google. Now, if you look at Google, even though
it's priced at about 26 times current earnings, which is not cheap,
for a company that owns like the Android phone market and
has market leading positions in like four to five big categories, and
it owns a bit of SpaceX and Anthropic and so forth. So if you look at that, and
Warren Buffett owns it, he's got like four billion or five billion in Google stock. So
if you have a look at that, You can get exposure to
SpaceX for Google. Now that's a more intelligent approach. That's
how I would get it. If I wanted any exposure to SpaceX, I'd
consider it through a Google exposure because you're getting
some there but you're getting a broad base of wonderful businesses under the
one banner of Google and it's selling for a fairly reasonable
price based on its current ability to print profits. And
it's got great leadership. So I think that's a more sensible approach to it.
Don't get caught up in this whole hype. Well,
I don't have my own rocket company. Well, just
know that you're on the losing end of that deal when an IPO is,
just so you know, okay? The crowd will follow and rush, institutions
will go with it too, and you'll get caught up
in the fray and you'll probably get killed. And if you do make money, you're trying
to repeat it, thinking you're smart, and then you'll lose money in the next
IPO. So I actually don't think there's a win-win outcome here.
I think there's actually a lose-lose. I don't think it bodes well. It's
not what I'd approach. It's not how I'd do it. So where I land on this is, magnificent
company, one of the great companies of our era. I want it to
succeed. It will succeed. Starlink will succeed. It will succeed. Optimus,
I mean, well, let's say Elon's doing anything, it'll succeed, right? I want to go to
Mars too. But I would not buy SpaceX in an IPO
just because of that. So I hope that makes sense. I hope that gives you a bit of
an understanding of how I come to that decision and
how you can too. Because part of this channel and
our podcast is to just give you some some
boundaries to play within that's gonna not wreck you because wealth
building is a long game and we wanna keep you moving and growing. So
I hope that makes sense. I'd love to know, what do you think about the SpaceX
IPO? Are you buying any? What's your alternative position on
that? What did you take away from this episode the most? I'd love to know in the comments. Leave
me a question or a comment below. I'll come back and reply. And of course, if you haven't done
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