#324 - Is SpaceX An Opportunity For The Average Aussie?

SpaceX is either the greatest investment opportunity in a generation, or it's the most expensive mistake you'll ever make. Most people think it's a no-brainer. Elon Musk, rockets, Starlink, the future. But is it just all hype from an investment standpoint? Because SpaceX just filed for its IPO, its initial public offering, where it initially offers shares to the public. That's what IPO stands for. So the window to

understand this opportunity is closing. My name's Lloyd Ross, multiple seven figure entrepreneur and investor, and I've helped thousands of everyday Australians to pay off debt, invest, build assets, and real wealth. And in this video, I'm gonna show you exactly how the SpaceX IPO works, how to access it, what it means as an investment for you, and whether it belongs in your portfolio or not. All right, so let's dig straight into it. Is

SpaceX a good idea? And the reason we're doing this episode is because, of course, when incredible companies like SpaceX go to list on the stock exchange, it means we, the public, can buy legal equitable ownership of pieces of the business. That's what shares are.

They're a share of a business. And what a business, right? And not in terms of the financials necessarily, but what it can do or what it's doing for human civilization. I would say there are few companies that are going to have an impact on the civilization to the extent that SpaceX is. It could, it's like the, it's like General Electric, it's like light bulb. This is one of the most incredible industrial developments of our race, of

the humankind, right? It's that important. Because not too long ago, before Elon really spearheaded this, like a freak, after he sold PayPal for, well his share of PayPal for 300 million, he literally put, I think half into Tesla, And then he put half into SpaceX, the two most hardest things, rockets and electric cars, and has had tremendous success in both amongst other things. So this

is a guy who means business, right? And the reason why he spearheaded that is because he discovered that the reason we haven't gone to space and back to the moon, etc., and kind of moved into that realm is because it's extremely expensive to launch rockets. The reason being is not just the fuel cost, of course, but it's actually the fact you've

got to rebuild the rocket once you use it. And so it's like having a commercial airliner like a Boeing 747, and you fly to, say, London to New York, and then you get to New York, and then you've got to just throw the plane out. Like, could you imagine how expensive tickets would be if you had to do that?

But that's what happened to space effectively, right? So, what he discovered through development of the Raptor engines, development of the rocket design, and of course, as we know, the ability to bring it back to Earth and land it, whether it be in the ocean, on a pad, or on land, or even tweezers, because the Starship, which is the largest flying

object ever created by mankind. He brought it back to Earth and caught it in these, you know, this docking bay, which is effectively two, like, two big steel tweezers. And they did it the first go, which is amazing. But if you've been following Elon's journey with SpaceX, it's been very incredible to watch, very inspiring, of course, and great for civilization. Okay, so they've been able to cut rocket development and redeployment cost by 90%. So it really cuts, cut the cost of

going to space by 90%. The third launch was where it was either, they had enough money for the third launch and if that had failed, they would have been game over. And they did it. So we were a breath away from not having this. And it may have set civilization back a long way. So thankfully, God was in our corner, or in Elon's corner, and it happened. Then they were able to bring it back to Earth, which is crazy, right? So now, I think

he's launching rockets all the time. Bang, bang, bang. So he's really commercialized Space, right? He spearheaded that. And so as part of that process, they developed these offshoots too, you know, like it made putting satellites into orbit cheaper. It enabled going to the space station cheaper. He recently just rescued

people who were stranded in the space station. It's just being able to access space a lot more affordably has created other industries like, you look at Starlink, which is effectively a series of satellites that just put internet down to the earth through a Starlink device anywhere, which is amazing. It's connected remote communities like never before. It's connected people during war. It's connected people during disaster. It by itself has been a byproduct of

the success of SpaceX, right? There's like, I think there's 9 million subscribers now in Starlink alone, so he's got these other Businesses

that have you know? Developed off the side of it, which is completely changing how we live right Starship is the is is purported to be the vehicle that takes us to Mars, and it seems like now That's an actual real or so what's that is very audacious is now becoming more measurable and achievable right so you can see that SpaceX is changing the arc of human civilization period right

But here's where the conversation changes when you start to consider it as an investment. So before I jump into the numbers and just talk about what it looks like, I have to explain this to you. This is not the first industrial revolution we've experienced, okay? So you have these new technologies adopted and we have this rush to develop it, compete with it, whatever it

might be, because, you know, people don't realize this, but SpaceX has competitors. Blue Origin is a big competitor and Jeff Bezos developed that company out of the profits from Amazon and they also launched to orbit. So it already has competitors. It's not the market owner of the entire market, okay? Because when there's profits to be made, you can bet your bottom dollar there'll be competition. So

when there's an industrial revolution, I want to give you an example. When railroads became the, oh my god, I can't believe we can cross America in this time frame, in this locomotive. This is mind-blowing. It's like going to Mars. It's like, whoa, right? So that's happened. And so when you look at the industrial revolution, certainly industrial developments, there's a bubble scenario that happens where a lot of capital runs to that area for fast investment returns. There's this

first mover advantage that happens. So the railroad is developed. And you could even say that United Pacific Railroad is one of the first few that was opened by Lincoln in the 1800s. But all of a sudden, there was like 200 railroad companies joining the fray. And of course, when you invested in railroads, in stocks, a lot of people lost a lot of money. Because just because it's good for civilization doesn't

mean it's good for your portfolio. The same can be said for airplanes. When the Wright brothers lifted off, I think it was in 1906, thereabouts, They lifted off and created flight for the first time. Now, fascinatingly, 60 years

later on the moon. Incredible developments. But, if you had invested into airlines back then, there was so many different airlines developed and competed with, that if you had to put your money in there, the chances you went bankrupt are extremely high. It was almost probably 100%. Because airlines are an awful, awful investment for return on capital. They burn through capital. They don't generate additional capital returns. Railroads, airlines,

motor vehicles. There were in early 1900s when motor vehicles were adopted commercially and horses became, you know, obsolete. There was 200, 200, 200 car manufacturers in the United States alone. And guess what? There was two. And one went bankrupt in 2008, which is GM. There was one, which is Ford. It's the only one left. So you had to pick one in 200, right? So this is what happens when there's an industrial bubble. And this will continue

to happen. The dot-com bubble happened with internet companies. You could say the same thing is happening in the crypto markets. You could say the same thing in the AI space right now. It's a wash with capital because people, they mistakenly think that new and innovative is good investment, and that is absolutely not correlated, just so you know. Because I gave you the examples, how you put your money in those things, you're lost, right? So that's

important for you to understand, right? Just because it's new, doesn't mean it's a good investment. They're really clear, right? So let's

have a look now at SpaceX, the business, because if we're going to assess whether it's good for our capital to buy shares in this business, we have to understand the business. That's what you've got to do, right? So let's have a look. 2024 revenues of SpaceX around about, call it $13 billion. Last year, 2025, about $15 billion. I believe now in 2026, it's probably around $20 billion. I'm just giving you some highlights here

so you can understand why. it's not really worth, I haven't really taken the time to invest deeply because it's not worth my time because it doesn't tick the boxes at all for me to deploy capital for investment. So I'm not gonna waste my time. But I am gonna explain a couple of things that makes it an automatic no, okay? Doesn't mean that people aren't gonna do it, but I just wanna showcase for you how quickly you can identify, ah, it's just out of my remit, yeah? Because

you don't have to swing at every pitch, as Warren Buffett says. You wait for the fat pitches come down and swing at what you understand, what you know, and what's gonna scale over time into the future, so you don't have to make decisions on when you should sell. And that's the real guts of how good quality investing, certainly how I do it, and how others like Buffett have done in the past. So, here we go. It earns about 20 billion. in revenue, that's

top line sales revenue, okay? And the current private valuation, they say is around 800 billion, okay? If you were to buy it privately now. The IPO target, so when a company IPOs, an investment bank underwrites the shares and underwrites the offering, and then goes to the public through the exchange and attracts attention to get investors to put their money in to then basically give

money to the owners. Because when a company IPOs, like SpaceX, Elon, who owns I think all of the company, well, doesn't own all of it, Google owns some of it, et cetera, there's some private investors that have added equity capital to the valuation, but he owns a lot of it. So when he sells to the marketplace on an exchange, he's actually exiting. He's

exiting a portion of his ownership of the business. He's selling a percentage ownership, and it might be 40, 50, 60% of the company or more, He's selling that to the public and he's taking the money in return. Does that make sense? He's actually selling a portion of his ownership to the public. That's how it works. He'll retain ownership and a lot of owners retain 20% or whatever it is of their company. So they've got ownership and control. They want to own more than 20% to

exert control at the board level. generally. So that's how it's an exit from the private equity. And it's also

a way to capitalize the company with the new proceeds. So when they sell part of the company, they get cash in return. And let's say an IPO is 1.5 billion. Sorry, 1.5 trillion, which is what they're estimated it's going to IPO at, and some even say 2 trillion. You say, okay, well, they've sold X amount, say 50% for 2 trillion, they've got a trillion in cash, just

bang in the company. Like, now we can really expand, now we can build multiple Starships, now we can do this, now we can get more stuff, now we can invest in the company. So then they take those funds and they start to then deploy that to grow the business. This is how Private companies become public companies, and this is why they do, so they can grow. They're taking capital from the public to say, guys, we're on mission here,

we've got this great opportunity, give us your money and we'll grow. Now, as a shareholder, do you think that at $20 billion of revenue, that SpaceX's valuation of $2 trillion is fair and equitable? Do you think you're buying a business that's undervalued? Do you think it's a business that's going to last? And the reality to these questions is, one, We don't yet know or can see what the net income of this business is going to be. We also don't know in the next 10, 15, 20, 30, 50 years

if it's going to exist. We just don't know these things. This is so difficult to determine. The reason why the $2 trillion market IPO estimate is around is because people are pricing

in that SpaceX is going to be the absolute market leader, dominate the market position of space travel and space logistics and the income that that type of market share can generate, just from that business alone, they're obviously saying that's going to be a lot. And they want to own a piece of that. And I know it makes sense, it does. It's like, wow, that's amazing. But let's understand this for a second. At $2 trillion valuation, It's like, what's that? A hundred times? A

hundred times sales. You know, to put that in perspective, don't beat me up in the comments for this, but we have a laundromat business, I've mentioned it before. We bought that for 1.5 times sales. So our earn back on a revenue standpoint is 1.5 years. And earn back from sales to valuation of this company, if it IPOs at 2 trillion, is 100 years. That's on revenue, not even on

earnings. If it's on earnings, it could be 100. So the public is, or the market is anticipating that this company will generate profits so high that they still think it's a good deal even at $2 trillion. Does that make sense? So let's put a gauge right on the ground here. Let's understand what they're asking for and what the opportunity is. So here you have, in the investing world, you have your capital, your money, and you have

all these opportunities in the investing universe, different types of assets. Whenever you invest in one thing, you say no to another thing. And the whole objective of investing is to buy a bush that has some birds in it, you hope, and what's the likelihood that you're going to get the birds out? Bird in the hands, worth two in the bush. That's investing. The

challenge with SpaceX is we don't know how many real birds and net income are going to come out of the bush and we don't know when. And we don't even know if the bush is going to be around. Who knows? It's a new industry, right? Let's look at a bush that's been around for, say, 20 years. or thereabouts, and let's look at the birds in that bush, let's look at the valuation of that opportunity that you can buy today in the marketplace, and let's then assess where your money is better spent. Here's

the example. Investing is best done when you compare two things with each other. Should you put your money here or here? So let's look at Meta. Meta is obviously the company that owns Facebook, Instagram, and WhatsApp as the core apps. They've got three billion people or subscribers to their apps, and they generate a tremendous amount of free cash flow and run by Mark Zuckerberg,

okay? So one of the most profitable companies ever built. And owner led, founder led, and by all accounts, yeah, generating tons of free cash flow. Selling for a very reasonable price, right? So have a look at this. 2025 revenue for Meta, 200 billion, okay? So we have SpaceX, 20 billion. Meta, 200 billion in revenue. 10 times more revenue. SpaceX valuation upon IPO is between 1.4, 1.5 to

2 trillion. Meta, current market cap, if you bought the whole company, currently selling on the exchange, you can buy shares in today, 1.45 trillion. So if you look at that very closely, Both 1.45 trillion, roughly 1.5 trillion. One's got 20 billion revenue, one's got 200 billion revenue. Which one are you buying? Does that make sense? SpaceX more or less earns 13 times less revenue than Meta, and SpaceX is roughly valued at the same price. That's what we're trying to understand here, okay?

And what's interesting about that is we know, we already know that Meta generates income. We know it generates return on capital. We know that it's a proven product. We know that it's already got competitors. We know that those competitors haven't killed it. We know it doesn't rely on contracts from NASA. It relies on payments from the public for its advertising business and

its subscription-based businesses. And it's got a lot of untapped potential in its WhatsApp enterprise, etc. And it's proven to be able to pivot when things got hard. So we have a very, we have a proven bush with birds in it that we know how many birds are coming back. We have that. So that's our option. You either buy Facebook for seven times revenue or do you buy SpaceX for whatever it is, huge amounts of multiples of revenue. Like which one do you buy, right? And so that's

the, that's how you ought to assess investments. And I think a lot of people are gonna treat the SpaceX investment because of the excitement and this, image in their head that, oh, they're going to own space, or I want a piece of it. It's going to compel them to overpay for something that they don't really truly know the value of. Because generally with IPOs, the objective of the investment bank, too, is to pump up the price and get maximum

price. They want to sell those shares at a maximum price. Very much similar to when you buy a car. They want to sell that new car to you at the highest price possible, even though when you drive it off, it's worth half, whatever. It's the same. So generally speaking, not always, but IPOs are notorious for selling shares to the public for the company at an extremely high nosebleed valuation. That's almost

criminal. Just so you know. Some examples of where that's happened and I've seen it happen and I've even suggested not doing it to people just in passing and they still do it. I'll give you a few examples here. When F45, and I know these companies are different to SpaceX, I understand, but it's the same emotional reaction. When I was doing F45, I said, you know, Jim, if you don't understand what an F45 studio is, it's fitness, group fitness. It's

one of the first group fitnesses to scale. It IPO'd. Right, it went IPO and I think they IPO for 600 million and the shares at the time was selling for $17 each. It IPO at $17 a share and one of the trainers was like, I bought shares, I bought shares, did you buy any shares? I'm like, I wouldn't touch that with a 10-foot pole. Like, why not? I'm like, I work here as well, I love the code. Like, you don't understand IPOs, like you just got ripped off. And then now if you

go and look at F45 shares, there's 6 cents. You went from $17 to 6 cents, they're never gonna get their money back. So this is a very good way to lose money. If you wanna throw money on the fire and burn it, go and invest in IPOs. And I, same thing can happen with GoPro. And so my brother-in-law said, I think I'm gonna buy shares in GoPro. I'm like, why? He goes, because I use GoPro, I love it. I was like, ah, I probably wouldn't do that. He's

like, okay, cool, I'll take that on board. And he didn't, which is great because I think it IPO'd at, I don't know, it was like $200 a share. Now it's like, I don't know what it is now, I think it's two. I think it's just like a hundred times less and you're never gonna get your money back. And there's countless examples of that. If you even went into call to chat and said, what's the percentage of people that really make, generate long-term returns from IPOs? This is not a great deal, okay?

Just quickly, if you're ready to take control of your finances but feel stuck on where to start, I have a solution. My book, Money Buys Happiness, simplifies investing and wealth building with practical steps to help you achieve financial peace. Get your copy via the link in the show notes and let's get your money working for you. Now back to the episode. So is SpaceX an effective company for civilization? Yes. Does it make money? Yes. Will

it continue to prompt profits in the future? It looks like it will. There's a high likelihood, but we don't know. Starling a great business? Yes. Will it continue? Probably. To what extent? We don't know. Right. So there's just a lot of unknowns. And what we definitely know is that if we don't know those things, then how do we really know if it's worth $2 trillion as a whole company? And the alternative argument to this question is, well, Lloyd, it's got almost supreme market

share. It's run by the craziest, most intelligent, flippant entrepreneur of all time. It's got a ton of investment from people like Google, et cetera. I think Google owns 7%. It's likely to print. I'm like, sure. But what do the competitors look like in the next 10, 20 years? What is the return on capital of those investments they make? Because if you think about what they're going to spend money on, rockets, fuselages,

missions to Mars stuff, it's going to burn through a ton of capital. So this company might rely on multiple share raises, so where they can sell more shares. And just doing that all the time to afford this mission to Mars is going to dilute the current shareholders more and more

and more and more. Because if they keep selling more shares and more shares to raise more capital to burn to get to Mars, which they look like they're going to, there may not be a commensurate return for you, but also you're going to dilute the current shares that are outstanding. There's going to be so many of them. So you could see this $2 trillion valuation, it may not fall, but certainly with dilution it

may not also grow. So you may keep your money in there for quite a long period of time until there's good long-term net profits and it really commands and owns its market space. It's very difficult to know, which is also why It doesn't really get my attention to deploy capital because there are too many unknowns. And I want to impart this lesson to you. The objective of investing is not to punt. There's this great metaphor that Warren Buffett uses. He says, he's

not looking for 10-foot bars to jump over. Meaning he's not looking for something very complex like this to figure out. What he's looking for is one foot bars he can step over. So an example would be he's looking for say, let's go throw this up there, a company that's worth a trillion that's selling for a hundred billion. He's looking for a company you can buy, where they've mispriced their real estate assets, and you can get it for free. He's

looking for basically to buy dollar bills for 50 cents with no risk. That's what he's looking for. And he did that recently with these Japanese companies. He bought them for, you know, probably a third of what they're worth, if not more, and they've been around since 1850. He's looking for that, because he's looking for certainty. and he's looking for certainty at a cheap price. And this is the

opposite of that. There's a lot of uncertainty and a very rich price. So this is the opposite of what Warren Buffett, the greatest investors ever lived, does. And I think that just imparting this wisdom to you will help you understand why this type of thing doesn't get my attention, but also why it does get a lot of people's attention, because they get emotionally brought into the mission, they want to be part of it. And they see a chance

to make considerable amounts of profits in the future. And they have seen that happen in Tesla, even though Tesla is about Hunt 100 it's probably you know 20 times overvalued It

really shouldn't be at the valuation. It's a it's like a the peer multiples about 200 which means it takes 200 years to earn back its its market cap and income and They've but they've seen that this is cult following with Elon where the public doesn't care they just pumping money into the stock price and I think that the house cards will fall on that at some point and That's a very difficult investment journey to go on because you're trying to ascertain the future with

a crystal ball and you can't, and you're going to watch this stock price go up and down and it's going to send you insane and you're just not going to find this rhythm in building capital. Just out of my experience, okay? It's not a new story. This has happened before. It happened with Cisco in 2000, as I said, with the dot-com bubble. It happened with railroads. It's happened with cars. This is an industrial evolution for humankind. It doesn't necessarily dictate good idea or

good way to certainly compound my capital. The same can be said for many, many other examples that I won't go into. So what we have to understand is, is it a good company? Yes. Is it a great company? Yes. Is it insanely good for humankind? Absolutely. Is it a company that's really set up for good investment? I don't think so. So you can be 100% right on a good company, but you can be 100% wrong on whether it's deserving of your capital. Does that make sense?

So let me finish with this question. Should you participate? Should you bother? This is why you watch this channel, to get an idea of really what goes on with why don't I touch that, right? So here's my absolute honest take on it, right? I personally don't touch IPOs, period. It's just a rule. So I don't even consider it. So like when there's an IPO, I go, stripe IPOs, this IPO, that, doesn't matter. It just doesn't even, it doesn't

make it through that first litmus test. So straight away, boom, right? And you can look at other things and say, well, Google owns and so forth. Well, if you want to have some exposure to SpaceX, what you could do is you could hold Google. Now, if you look at Google, even though it's priced at about 26 times current earnings, which is not cheap, for a company that owns like the Android phone market and has market leading positions in like four to five big categories, and

it owns a bit of SpaceX and Anthropic and so forth. So if you look at that, and Warren Buffett owns it, he's got like four billion or five billion in Google stock. So if you have a look at that, You can get exposure to SpaceX for Google. Now that's a more intelligent approach. That's

how I would get it. If I wanted any exposure to SpaceX, I'd consider it through a Google exposure because you're getting some there but you're getting a broad base of wonderful businesses under the one banner of Google and it's selling for a fairly reasonable price based on its current ability to print profits. And it's got great leadership. So I think that's a more sensible approach to it. Don't get caught up in this whole hype. Well,

I don't have my own rocket company. Well, just know that you're on the losing end of that deal when an IPO is, just so you know, okay? The crowd will follow and rush, institutions will go with it too, and you'll get caught up in the fray and you'll probably get killed. And if you do make money, you're trying to repeat it, thinking you're smart, and then you'll lose money in the next IPO. So I actually don't think there's a win-win outcome here.

I think there's actually a lose-lose. I don't think it bodes well. It's not what I'd approach. It's not how I'd do it. So where I land on this is, magnificent company, one of the great companies of our era. I want it to succeed. It will succeed. Starlink will succeed. It will succeed. Optimus, I mean, well, let's say Elon's doing anything, it'll succeed, right? I want to go to Mars too. But I would not buy SpaceX in an IPO

just because of that. So I hope that makes sense. I hope that gives you a bit of an understanding of how I come to that decision and how you can too. Because part of this channel and our podcast is to just give you some some boundaries to play within that's gonna not wreck you because wealth building is a long game and we wanna keep you moving and growing. So I hope that makes sense. I'd love to know, what do you think about the SpaceX IPO? Are you buying any? What's your alternative position on

that? What did you take away from this episode the most? I'd love to know in the comments. Leave me a question or a comment below. I'll come back and reply. And of course, if you haven't done so, boom, boom, hit the subscribe button so you get notified straight away and share