Investor Steve Eisman recently questioned SpaceX's valuation and its future ambitions during a discussion about the company's financial documents. He noted that SpaceX's revenues are approximately $19 billion.

Eisman stated that SpaceX is being valued at over 100 times its revenue. "SpaceX stock's being valued at over 100 times revenue, whereas no company of any size has ever had that kind of valuation," Eisman said. He compared this to Kellogg's, saying, "SpaceX has the revenues of Kellogg's, which makes Froot Loops, which I love, but no one is going out of their way to buy Froot Loops."

He also examined claims within the company's S-1 filing regarding a plan for asteroid mining. "In the SpaceX S-1, where they talk about things SpaceX will eventually do, one of them is asteroid mining," he said. He quoted page 71 of the S-1, which states, "We plan to pursue asteroid mining operations to extract metals and other critical resources from near-Earth and main-belt asteroids, providing abundant raw materials for space-based industries."

Eisman further criticized the company's projections regarding its total addressable market (TAM). "The S-1 says that SpaceX total addressable market is $28.5 trillion, and the irony is that over 90% of that TAM is AI, which is all about Grok," he said. He characterized Grok, an AI product, as a "third-tier product."

Despite his criticisms, Eisman clarified his position on SpaceX's future. "I have no opinion on what will happen to SpaceX," he said. He described the fundamental valuation perspective as "ridiculous," but acknowledged that such situations can persist. "But a lot of things can be ridiculous for a long time," he added.

Why It Matters

Steve Eisman, known for identifying the subprime housing bubble in 2006 and 2007, brings a historical perspective to his analyses of market valuations. His previous work was chronicled in Michael Lewis's 2010 book 'The Big Short', which was later adapted into a 2015 film where Steve Carrell played a character based on Eisman. His current commentary on SpaceX's valuation and its AI and asteroid mining ambitions raises questions about the financial metrics and long-term prospects noted in the company's S-1 filings.

Eisman hosts the weekly podcast 'The Real Eisman Playbook', where he discusses market topics.