Gary Black, founder of The Future Fund LLC, said he is not interested in buying SpaceX's upcoming initial public offering.
Black's reluctance highlights a growing tension between retail investor hype and institutional valuation metrics. As SpaceX moves toward a public listing, the gap between perceived prestige and financial fundamentals could influence how other major investors approach the stock.
Black said the comments on Thursday, arguing that the current valuation of the company is excessively high. He said that the SpaceX IPO valuation may approach $1 trillion [1].
Beyond the price point, Black cited concerns regarding the company's governance. He also pointed to potential losses as a primary reason for his decision to stay on the sidelines for now.
While many investors remain eager for a chance to own a piece of the aerospace company, Black suggests that the current market enthusiasm may be overwhelming the actual risks. He believes the valuation does not align with the company's financial reality, a sentiment that contrasts with the general frenzy surrounding the listing.
Black did not specify a precise price target for entry but indicated that he would only be likely to buy the stock if the valuation became more attractive.
“Gary Black said he is not interested in buying SpaceX's upcoming initial public offering.”
The skepticism from a prominent investor like Gary Black suggests that SpaceX may face a 'valuation wall' during its IPO. If the company attempts to list at a trillion-dollar valuation, it may struggle to find institutional support if the financial data does not justify such a premium, potentially leading to volatility shortly after the stock begins trading.
