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Posted on 06/22/2026 6:26:22 PM PDT by BenLurkin
SpaceX shares tumbled 16% Monday – their third straight day of declines — on news that Elon Musk’s rocket company could launch a massive borrowing binge.
After a blockbuster initial public offering earlier this month, SpaceX on Monday revealed in a regulatory filing that it plans to sell investment-grade bonds. The bond offering would aim to raise about $20 billion, according to reports, and could help bankroll costly AI development and longer term goals like building data centers in space.
In addition to the offering of senior unsecured notes, the filing disclosed about $100.8 billion in cash.
The shares on Monday closed at $154.60, giving the company a $2.03 trillion market capitalization. That’s after SpaceX fell more than 8% Wednesday and Thursday before the US market closed on Friday.
SpaceX would be the latest tech giant to turn to debt to finance pricey AI to-do lists. This month Alphabet, Amazon and chip titan Nvidia have indicated they would tap debt markets.
“Investors remain skittish about all these debt offerings on the Street but it’s par for the course in this AI arms race,” said Dan Ives, a managing director at Wedbush Securities. “We are seeing massive debt and equity raises from Big Tech players to fund major capital expenditure buildouts over the coming years.”
(Excerpt) Read more at nypost.com ...
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My daughter bought some along with 4 drone stocks.
The $75 billion was for collateral to borrow against, not to spend.
This is pretty much the same story with most large IPOs. If you got in quick and could bail fast, you could have made some quick cash. Wait a few months and then start buying after the lock up periods end. Long term you will make money. Short term, its a day trade.
Pelosi takes one in the shorts?
Hoping for double digits so I can pick up a few more shares at a discount.
Valuations and ROI are all over the place right now... but Starship launching at Falcon cadence will turn the whole industry.
Building AI super-clusters in orbit...
Comm net via Starlink for Terra, Luna, and Mars...
If off-Earth resources are no longer cost prohibitive, and most of that marginal utility stays up out of the gravity well...
Paradigm Shift like nothing we’ve seen before.
What would cap this is The Boring Company announcing a boring machine that fits in the cargo nacelle of Starship...
my first thought as well, as in WTF???
That article never said they needed anything more.
Last seen was Elon and Pelosi in front of 7-11 asking for 10 bucks to buy a six pack of beer.
Correction, it was only Pelosi. LOL
A 16% loss in the first week. Great work, Elon!
“The IPO raised $75 BILLION, and now it needs money????
The $75 billion was for collateral to borrow against, not to spend.”
____________________________________________________________
Why would you use your new capital as collateral to borrow against at an additional fee?
That doesn’t make a speck of business sense.
Depends on how low your rates are and on what you are capitalizing for.
Outstanding video and post. That is why I read on Free Republic. Thanks! Haven’t touched it yet.
There is absolutely nothing about this IPO which makes any business sense. To justify a staggering $2.1+ trillion post-IPO valuation on only $18.7 billion in revenue (as of 2025), the company had to pitch itself as a frontier AI software play rather than a manufacturing company.
Yet the stock is currently being priced as a sci-fi monopoly capable of asteroid mining, Mars colonization, and orbital AI data centers. However, the cold accounting reality reveals a highly leveraged company burdened by immediate massive debt and restricted by earth-based infrastructure.
The only part of the IPO that is currently making any money is Starlink. The xAI portion loses over a $Billion a month. And over 26% of the funds raised in the IPO, $20 billion must immediately be used to pay off an expiring “SpaceX bridge loan” maturing on September 2, 2027.
This entire spectacle is full on craziness! A valuation of $2.1 Trillion on a company which is based on wishful thinking and no viable business plan is insane! Because of the huge amount of money in indexed funds which are favored by most retirement funds, huge amounts are going to be invested by people's retirement accounts; when it inevitably falls flat on its face a whole lot of average people are going to be hurt.
The day before the IPO some smart market people were saying it would take off right away but within a week or two fall back from some initial peak.
Here is an AI based analysis... 1. Today's Price is Protected by an Artificial Dam Right now, the stock is trading at a premium because it is insulated by a temporary supply-demand vacuum. Only about 5% of the company's total shares are currently liquid and floating on the open exchange. Millions of everyday buyers and forced passive index funds are all crowding into that tiny, restricted pool of shares. This structural chokehold artificially keeps the price inflated in the short term. 2. The Late-Summer Multi-Tranche Release (The 85% Trigger) The reason dropping below $135 is treated as an 85% mathematical baseline for autumn is because that supply constraint completely disappears. According to the prospectus, as soon as the first public quarterly report drops in late summer, the phased lockup windows begin to unlock. The floating supply of shares is scheduled to aggressively balloon from 4% to 24% through rolling 7% tranches. When a massive flood of insider shares hits the market, the structural chokehold breaks. Fading retail hype will meet a 6x increase in available stock. Historically, that exact recipe results in a sharp break below the initial IPO offer price ($135) in more than 9 out of 10 heavily hyped debuts. 3. Stripping the Premium (The 60% and 20% Floors) The deeper downside percentages represent what happens when the narrative has to answer to real corporate balance sheets: The 60% Chance of $115: This is where the stock lands if the upcoming quarterly earnings show that the newly absorbed xAI division is acting as a massive cash-burn machine that drags down Starlink's real-world profits. The market will strip away the "AI hype premium" and revalue the company closer to its mid-2025 private market baseline. The 20% Chance of $63: This is the absolute fundamental value of the company's current tangible assets and operational cash flow without any speculative future growth priced in. It remains a low-probability "worst-case panic scenario" because the company's massive $100.8 billion cash cushion acts as a hard floor. The Verdict The current price is a reflection of June's market structure (high demand, tiny supply). The probability percentages I gave you are a reflection of September's market structure (fading demand, massive supply expansion). But hey why would people investing in what has been marketed as an AI based company believe AI base predictions?
Hoping for double digits so I can pick up a few more shares at a discount.
Here is an AI based analysis...
1. Today's Price is Protected by an Artificial Dam Right now, the stock is trading at a premium because it is insulated by a temporary supply-demand vacuum.
Only about 5% of the company's total shares are currently liquid and floating on the open exchange.
Millions of everyday buyers and forced passive index funds are all crowding into that tiny, restricted pool of shares. This structural chokehold artificially keeps the price inflated in the short term.
2. The Late-Summer Multi-Tranche Release (The 85% Trigger) The reason dropping below $135 is treated as an 85% mathematical baseline for autumn is because that supply constraint completely disappears.
According to the prospectus, as soon as the first public quarterly report drops in late summer, the phased lockup windows begin to unlock.
The floating supply of shares is scheduled to aggressively balloon from 4% to 24% through rolling 7% tranches.
When a massive flood of insider shares hits the market, the structural chokehold breaks. Fading retail hype will meet a 6x increase in available stock. Historically, that exact recipe results in a sharp break below the initial IPO offer price ($135) in more than 9 out of 10 heavily hyped debuts.
3. Stripping the Premium (The 60% and 20% Floors) The deeper downside percentages represent what happens when the narrative has to answer to real corporate balance sheets:
The 60% Chance of $115: This is where the stock lands if the upcoming quarterly earnings show that the newly absorbed xAI division is acting as a massive cash-burn machine that drags down Starlink's real-world profits. The market will strip away the "AI hype premium" and revalue the company closer to its mid-2025 private market baseline.
The 20% Chance of $63: This is the absolute fundamental value of the company's current tangible assets and operational cash flow without any speculative future growth priced in. It remains a low-probability "worst-case panic scenario" because the company's massive $100.8 billion cash cushion acts as a hard floor.
The Verdict The current price is a reflection of June's market structure (high demand, tiny supply). The probability percentages I gave you are a reflection of September's market structure (fading demand, massive supply expansion).
But hey why would people investing in what has been marketed as an AI based company believe AI base predictions?
Investors are do stupid.
Debt is taken on to expand here, not to fix problems.
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