SpaceX has tumbled 45% from its peak, and veteran investor Gary Black says the sell-off should surprise no one. The problem, as he sees it, is that buyers fell for one of the oldest traps in the market — confusing a remarkable company with a reasonably priced stock. “Don’t conflate a great business with a great stock,” Black warned, driving home what he called the number one rule in investing. Even a company launching rockets and reshaping global connectivity can be priced so high that there is simply no room left for investors to make money.
At the heart of Black’s argument is the math. SpaceX’s roughly $1.7 trillion market capitalization translates into a forward enterprise value-to-revenue multiple near 40 times, a figure he described as unprecedented among trillion-dollar companies. He pointed out that even Nvidia, during the height of its AI-fueled surge, only briefly approached a trailing EV-to-revenue multiple of around 45 times while its forward multiple generally stayed between 10 and 25 times as revenue growth accelerated. Comparing SpaceX to other mega-caps like Tesla and Nvidia, Black said no company of similar size has ever sustained the kind of valuation SpaceX is carrying.
Black has been consistent in his skepticism. Last week he argued that the IPO never should have been priced at $135 and that he would not even consider getting interested in the shares until they fall below $100. With SPCX closing Friday at $123.99, down another 5.43% on the day before edging marginally higher in after-hours trading, the stock is creeping closer to his target but is not quite there yet.
All eyes are now turning to SpaceX’s first earnings report as a public company, expected around August 17 or possibly sooner. That report, along with the expiration of the IPO lockup period shortly afterward, could set the tone for the next leg of trading. For now though, Benzinga’s edge rankings show negative price trends across short, medium, and long-term timeframes — suggesting that whatever catalysts lie ahead will need to be extraordinary to reverse the momentum working against bullish investors who bought near the top.