Analyst compares SpaceX to Dogecoin, says stock is trading at a ‘silly’ and unsustainable valuation

Yusko, well known in the hedge fund market, said he believed the valuation of SpaceX (as well as those of Anthropic and OpenAI) relative to its power to generate earnings was “beyond silly.”

With SpaceX’s $2 trillion valuation, he said, the company would have to achieve about half of the projected gross domestic product for the U.S. in 10 years, in order to justify a 10x return. “It’s a mathematical impossibility,” he said.

Yusko’s comments come as SpaceX shares are currently trading below where they opened after the company’s IPO. In the past five days, the stock has fallen more than 12% and it has lost nearly 28% of its value in the past month.

Worse times coming?

Yusko warned SpaceX shares are likely to continue selling off in the coming months, too.

“I think, ultimately, as the lockup expires and the people try to sell, I think that goes down a lot,” he said. “Like, a lot, a lot.”

Investors who feel they’re getting in on the ground floor of a company that will grow at rate comparable to Microsoft or Amazon, he added, are deluding themselves, since both of those internet giants had tiny market caps when they went public.

‘Kind of like’ Tesla

Yusko compared the SpaceX IPO to what Elon Musk did with Tesla, saying he floated a small amount and built hype around it.

“Then he engineered a big short squeeze and the price went up 10 times,” Yusko said. “He makes Tesla looks like a practice run with what he did at SpaceX. He only floated 4%. So 4% of the shares are outstanding [and] … 46% are owned by him and 50% are owned by others. … He’s basically stuffing this overpriced security into mom and pops retirement account so he and his VC buddies can cash out. To me, that’s theft. “

Yusko is hardly the only critic of SpaceX, but most big banks are still advising investors to purchase the stock. Some 22 of 28 analysts covering the company have attached a “buy” rating to it. Five have “hold” ratings” and Keith Snyder of CFRA rates it as a “sell,” with a price target of $115.