| Alphaville:" Getting a lot of banks involved in an IPO has a side benefit: it subdues the potential for criticism. Every firm brought into the tent by an issuer, beyond a vested interest in being nice, has to abide by the rules. In the US, these include a blackout period for publishing research of 40 days for lead underwriters and 25 days for everyone else. With SpaceX using 23 banks for its capital raise, independent research about the record-breaking float has been very hard to come by. That alone is our reason to raise awareness of a couple of notes from the team at Morningstar. Their headline findings are: The stock’s probably worth $63 per share, a 53 per cent discount to the $135 issue price. SpaceX probably has an addressable market of about $129bn, rather than the $1.6tn claimed in its S-1 filing. In a (metaphorical) moonshot scenario, where SpaceX pioneers orbital data centres and captures 20 per cent of AI computing capacity by 2040, the company would be worth $1.97tn, or $154 per share. Morningstar assigns only a 7 per cent per cent chance of the moonshot scenario happening. For Starlink, Morningstar estimates the global market to be worth about $129bn, which is rather less SpaceX’s estimate of $1.6tn. “[T]echnical constraints and unit economics limit the business primarily to lower-density markets,” it says. Space cadets and attached bankers, do please tell us in the comments what Morningstar gets wrong." |