The City’s nerves are jangling as SpaceX’s stock market debut sends valuations into the stratosphere, a move that even Elon Musk’s staunchest backers admit is a high-wire act. The stock, which began trading on the Nasdaq under the ticker SPCEX, soared 40% in its first hour, prompting warnings from analysts that this is less a rational market and more a speculative frenzy. For a man who thrives on defying gravity, Musk’s latest gamble is his most audacious yet: floating a company that has yet to turn a profit, whose revenue depends on government contracts and a nascent space tourism industry, and whose valuation already exceeds that of Boeing.
It reeks of the dot-com bubble, only with rocket fuel. The gilt-edged crowd is particularly uneasy. With 10-year yields hovering at 4.
2%, the Bank of England’s tightening cycle has made risk assets a harder sell. Yet here we are, with retail investors piling in, chasing the dream of Martian colonies. This is not prudent capital allocation.
It is a bet on a single man’s vision, and the market is pricing in perfection. One regulatory hiccup or launch failure could send shares into freefall. Capital flight from safer havens into this stock is a symptom of a market drunk on its own hubris.
As I’ve said before: when the music stops, the losses will be swift. The bottom line is this: SpaceX may rewrite the future of humanity, but its stock is a gamble best left to those who can afford to lose it all. For the rest, stick to gilts and sleep easy.
