James Chanos, one of Wall Street’s most famous short sellers, is throwing cold water on what’s shaping up to be one of the most hyped IPOs in history. SpaceX, Elon Musk’s rocket and satellite company, is targeting a $1.75 trillion valuation for its public debut scheduled for June 12 under the ticker SPCX. Chanos thinks that number is, to put it mildly, disconnected from reality.
The company aims to raise $75 billion in the offering, with indicated investor demand reportedly reaching $250 billion. That kind of appetite would make SpaceX potentially the first US company to list with a market value exceeding $1 trillion.
The Amazon comparison doesn’t hold up, Chanos says
One of Chanos’s sharpest critiques targets a comparison that SpaceX bulls love to make. Supporters of the IPO have drawn parallels between SpaceX and the early public offerings of tech giants like Amazon, Google, and Meta, suggesting that today’s seemingly outrageous valuation will look cheap in hindsight.
Chanos isn’t buying it. He points out that when Amazon went public in 1997, it was valued at $450 million, roughly 3x its revenues at the time. That’s a fundamentally different proposition than a company seeking to debut at $1.75 trillion.
