Wall Street’s Big Short: SpaceX’s IPO is only supported by dreams—and it’s not worth $1.75 trillion at all!

SpaceX completes the largest IPO in history with a valuation of $1.77 trillion, sparking a subscription frenzy. But well-known short seller Jim Chanos warns that its valuation is too high, supported only by hope and dreams, and veteran short investors are also bearish.

SpaceX IPO will debut tonight Taiwan time! Riding the Elon fan effect and with plans to allocate up to 30% of shares to retail investors, this IPO has ignited an unprecedented retail participation wave.

However, amid widespread market optimism, some experts and seasoned investors have expressed concerns about SpaceX’s valuation and potential financial risks.

Famous short seller Jim Chanos bearish on SpaceX IPO

According to Reuters, Jim Chanos, founder of the well-known short-selling firm Kynikos Associates, pointed out that the hype around the SpaceX IPO is entirely built on "dreams and hopes," and cannot support its staggering $1.75 trillion valuation. Based on any reasonable assumptions over the next five years, the company is not worth this amount.

Chanos further analyzed that SpaceX’s current valuation is 90 times its revenue, while Elon Musk’s other company Tesla is valued at only 14 times, indicating a clear overvaluation.

He believes that in a bull market, investors often pay a premium for corporate promises, while the actual financial fundamentals are seriously overlooked.

Chanos is known for successfully predicting the collapse of Enron, and since then has been dubbed “Wall Street’s Darth Vader,” “Disaster Capitalist,” and “LeBron James of Short Selling.” Last year, he made a notable move in the crypto space by shorting MicroStrategy’s stock while holding a long position in Bitcoin.

Image source: YouTube screenshot. Famous short seller Jim Chanos appeared at a Forbes-hosted summit.

Veteran short investor also bearish

Not only Jim Chanos is bearish; Steve Eisman, a well-known investor who accurately predicted the 2008 financial crisis and was featured in the book “The Big Short,” also questions the hype around SpaceX’s IPO.

Eisman states that SpaceX’s current valuation is quite foolish and believes that investor expectations already reflect blind optimism about the company.

The core concern with SpaceX is its capital intensity, with capital expenditures in fiscal year 2023 accounting for 42% of revenue, but in the most recent first quarter, this figure soared to 215% of revenue.

Therefore, Eisman warns that SpaceX’s future growth projections are disproportionately reliant on AI, as the company is investing heavily in computing power and data centers, shifting from a pure aerospace and communications firm to a tech company facing costly AI infrastructure races.

• **Related report: Is SpaceX IPO worth buying? Independent institutions set a target price of $63, well below the $135 offering price

Institutional and retail subscription demand hits record high

According to the Wall Street Journal, sources reveal that asset management giant BlackRock has submitted orders to buy at least $5 billion worth of SpaceX shares, with other major asset managers also proposing similarly staggering subscription scales.

While such institutions typically purchase large amounts of shares in IPOs, this scale of order is several times larger than traditional offerings.

SpaceX announced Thursday afternoon that all IPO shares were sold at $135 per share, valuing the company at about $1.77 trillion.

Sources indicate that retail investors alone requested to buy over $70 billion worth, and orders from global sovereign wealth funds and family offices have also been received, including a single family office requesting over $1 billion in subscriptions.

Will SpaceX IPO break the bull market?

This record-breaking IPO has been said by analysts to have drained liquidity from the market, including the crypto market. But Wall Street believes the market should be able to absorb it and that it won’t break the current bull run.

Research firm Gavekal Research pointed out that, within the 12 months ending September 2025, S&P 500 companies will have issued about $1.7 trillion in stock, and the $75 billion SpaceX plans to raise is still relatively manageable within the overall US stock market size.

However, Truist Wealth data shows that in the past 15 years, 30 large IPOs have had a median one-year stock price decline of 9%. Additionally, recent Nasdaq rule changes will allow companies like SpaceX to be included in indices more quickly, potentially amplifying volatility driven by passive fund chasing.

Jay Woods, chief market strategist at Freedom Capital Markets, worries that this could cause many retail investors to face losses, and urges the public to view SpaceX as a long-term investment requiring time to grow, rather than a lottery ticket for speculation.

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