Jordan Hale: Okay, I'm going to say something that might sound insane — SpaceX is the most expensive mythology purchase in the history of capital markets. Fight me.
Alex Mercer: Bold opener. Where are you starting from?
Jordan Hale: The S-1. Late May 2026, SpaceX files with the SEC for the first time ever — first-ever public look at their books — and buried in there is a $41.3 billion accumulated deficit. Which means, like, net net, since the very beginning, they've lost more than they've made. Every year, added up. And then June 12th they IPO at $135 a share on Nasdaq, raise $75 billion, and the market goes yeah, $1.77 trillion, sure.
Alex Mercer: And swung from a $791 million profit in 2024 to a $4.937 billion loss in 2025. In one year.
Jordan Hale: Which is — yeah, that's the analogy, right? Your friend made a little money last year. They owe $41 billion in lifetime debt. They lost five billion dollars this year. And they're asking you to hand them $1.77 trillion. That's not an investment thesis. That's faith.
Alex Mercer: Okay. Tell me why you think that's wrong.
Alex Mercer: Because almost all of that loss is traceable to one decision. February 2026 — Elon absorbs xAI into SpaceX via an all-stock deal. That single move folded $6.355 billion in operating losses and $12.7 billion in capex into the books. You pull that out, and you have a fundamentally different company.
Jordan Hale: Wait, so the $4.9 billion loss is basically... it's one acquisition?
Alex Mercer: Primarily, yeah. And look — xAI did generate $3.201 billion in 2025 revenue. It's not nothing. But it lost $6.355 billion operating. That capex intensity, $12.7 billion, it suppresses profitability regardless of what revenue does. The math just doesn't close at current burn rate.
Jordan Hale: Okay but — wait, no — so if xAI is the problem, then Starlink is actually... like, genuinely working? Not mythology?
Alex Mercer: Starlink is real. $11.387 billion in 2025 revenue, $4.423 billion in operating profit. Sole profitable division. That's a mature business. The bulls also point to $6.584 billion in adjusted EBITDA — I think that number is doing a lot of work, but it's not fabricated. The problem is the market is valuing SpaceX at roughly 150 times Starlink's annual operating profit. Morningstar runs the DCF, gets to $63 a share — about $780 billion total — and the IPO priced at $135. That's a 59% gap.
Jordan Hale: Sixty-three dollars. And they opened at a hundred and thirty-five. That's not a rounding error, that's a different religion entirely.
Jordan Hale: But like — okay, here's where I think my take actually lands, you know? The 150x thing. That's not me being dramatic. If Starlink is the only thing generating real cash, and the market is pricing SpaceX at 150 times that operating profit, then the entire $1.77 trillion is a bet on things that don't exist yet. Starship. Orbital compute. The AI play. None of it is producing cash right now.
Alex Mercer: Yeah, that's right. You can't justify the number on Starlink alone. Full stop.
Jordan Hale: And then — wait, this is the part that actually got me — the stock hit $2.66 trillion. Peak valuation. June 16th, four days after IPO. And then pulled back roughly 30% within two weeks. The market basically second-guessed itself in real time.
Alex Mercer: That's not a correction. That's the market doing the math it skipped on day one.
Jordan Hale: But was it even analytical demand driving the IPO price up? Because — I mean, the thing was 2x oversubscribed, over $10 billion in institutional orders. And then MSCI confirms SpaceX for the Global Standard Index, which means every passive fund tracking that benchmark has to buy. Like, they don't have a choice.
Alex Mercer: Structural buying. It amplifies momentum that was already there — it doesn't validate the price.
Jordan Hale: So the partial win for my take is basically — yeah, the enthusiasm was real, the demand was real, but if Starship and xAI never actually monetize at scale, the stock has to converge toward what Starlink is actually worth. And nobody agrees on that number — analyst targets run from $115 all the way to $401. That spread alone tells you this isn't analysis anymore.
Jordan Hale: Okay, maybe 'mythology' was too clean a word for it. Like, Starlink is genuinely real, the demand at IPO was genuinely real — I'll give you that. But the story investors are buying isn't Starlink, you know? It's everything that hasn't happened yet.
Alex Mercer: Half-concession accepted. But here's where I won't budge: Morningstar's $63 — that's a DCF, it's not a vibe, it's discounted cash flows — sits 59% below a $135 IPO price. That gap isn't two analysts disagreeing about the timing. That's a fundamental disagreement about whether SpaceX's commercial roadmap ever generates the cash to justify the number. And underneath all of it, the accumulated deficit is $41.3 billion. Since 2002. The company has never, cumulatively, earned enough to offset what it's lost. That's the floor the narrative has to clear.
Jordan Hale: So SPCX might just be the most expensive story ever told.
