Key Points
Jeremy Grantham, co-founder of GMO LLC, which manages approximately $70 billion in assets, has expressed skepticism about Space Exploration Technologies Corp. (NASDAQ: SPCX). In a recent interview on the “The Diary of a CEO” podcast, Grantham stated he believes SpaceX will fail to meet its ambitious promises, calling it “a fabulous BS story.” He highlights that while he supports SpaceX’s Starlink internet service, the majority of its valuation is tied to speculative ventures that are unlikely to succeed.
Grantham pointed out that SpaceX, which lost nearly $5 billion last year, may have to navigate a potential bear market that could drop its share price from $160 to an intrinsic value of $63 as predicted by Morningstar. This scenario would make it challenging for the company to raise capital at favorable valuations. Additionally, Goldman Sachs forecasts SpaceX will face negative free cash flow of $105 billion by 2029, raising concerns about its long-term growth prospects and financial stability.
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