- Jim Chanos, founder of the well-known short-selling firm Kynikos Associates, has publicly questioned the scale of SpaceX's upcoming initial public offering in New York, stating that its valuation target of $1.75 trillion lacks fundamental support and relies mainly on future expectations.
- The IPO aims to raise $75 billion, and if successful, it will become the largest listing event in global history. However, the price-to-sales ratio of up to 90 times has sparked widespread debate in the market regarding high valuations and corporate governance logic.
- Chanos also expressed a bearish view on the asset returns of the data center industry, believing that the sector faces high hardware depreciation risks and limited pricing power, making it more akin to low-return equipment leasing companies.
Astronomical Valuation Sparks Market Fundamental Disputes
SpaceX plans to list on the New York Stock Exchange this Friday, aiming to raise $75 billion at a valuation of $1.75 trillion. This scale not only surpasses all previous tech companies but also reaches nearly three times the size of Saudi Aramco's 2019 listing. However, Chanos pointed out at an industry conference in New York that under any reasonable assumptions for the next five years, the company's true value is difficult to match with the current valuation level. Market participants' acceptance of premiums for narratives like Mars colonization and space data centers is being tested, especially as capital market cycles fluctuate, increasing the risk of real performance eroding valuations.
Divergence in Financial Metrics and Lessons from Short Selling History
Although some analysts believe that shorting SpaceX is logically reasonable, most short-selling firms have shown significant caution before this offering. This is mainly due to the pressure of short covering brought about by the continuous rise in the stock prices of trillion-dollar giants in recent years. According to relevant data institutions, investors who have directly or indirectly shorted Tesla (TSLA:US) have accumulated paper losses of $27 billion since June 2021. Chanos emphasized that SpaceX and Tesla belong to completely different asset classes, with Tesla's current price-to-sales ratio at about 14 times, while SpaceX's ratio in this offering is as high as 90 times, indicating that its valuation has overdrawn growth expectations over an extremely long time period.
Heavy Asset Depreciation Pressure in the Data Center Industry
In addition to criticizing aerospace valuations, Chanos further elaborated on his pessimistic outlook for the data center operations industry, defining the field as an inefficient business with single-digit capital return rates. Since 2022, he has consistently been bearish on traditional data center operators and emerging cloud service entities, believing that these companies are essentially more akin to real estate investment trusts or heavy asset equipment leasing companies rather than high-growth tech enterprises. These companies purchase expensive advanced chips from semiconductor suppliers like Nvidia (NVDA:US) and lease them to hyperscale cloud service providers. Due to the rapid pace of technological change, companies must bear significant asset depreciation risks.
Lack of Pricing Power Limits Valuation Recovery in Sub-Sectors
In the transmission mechanism of the industry chain, data center operators are essentially price takers. Chanos pointed out that these companies' supply chains are heavily dependent on upstream core hardware manufacturers, and while they cannot dominate hardware pricing, their bargaining power with large downstream customers is also relatively limited. Therefore, the valuation multiples of these companies should not exceed those of semiconductor manufacturers that control core hardware supply. As the global demand for computing power undergoes structural adjustments, if subsequent core computing power leasing prices fluctuate, the market's overall pricing logic for the data center sector may face reevaluation, and the liquidity pressure of the heavy asset model will gradually become apparent.
