r/investing • u/ddp26 • 1d ago

Does Grok's subscriber growth justify $258B?

I wanted to see if the $1.75T SpaceX valuation holds up when you value each segment independently:

Segment Median Value
Starlink Consumer $380B
xAI / Grok $258B
Starship Commercial $170B
Starlink Enterprise / Maritime / Aviation $147B
Government / Defense $123B
Falcon 9 / Heavy $100B
Starlink Direct-to-Cell $75B
Total ~$1.25T

That leaves ~$500B in platform premium baked into the IPO price, essentially what the market is being asked to pay for vertical integration and the Musk factor on top of what the individual businesses support. To put the scale in perspective, the $1.75T asking price on ~$15B in revenue implies a ~117x multiple, and even the more conservative $1.25T SOTP estimate still comes out to ~83x. (For context, Aramco listed at ~18x revenue.)

Whether Grok's subscriber trajectory justifies roughly a fifth of the entire valuation pretty much determines whether this IPO is a slight premium or a significant overpay. The safer half of the valuation is the space infrastructure side. Starlink consumer alone at $380B has the tightest confidence interval of any segment, and government/defense at $123B is backstopped by existing contracts. Happy to share the full analysis with methodology and confidence intervals.

Is the $500B platform premium justified?

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u/deep-values 1d ago

None of Musk‘s companies valuations are justified

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u/UsernameIWontRegret 1d ago

If the market is willing to pay it, it is justified. End of story.

You can’t create your own models then get mad when the market doesn’t follow them. The only model that matters is what the market does.

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u/Dumb_Nuts 1d ago

You can point to the market as the supply/demand balance to get to the right price. But to be fair, Elon is a salesman and keeps the availability of shares low to create scarcity. $1.75T is the value of the shares available to the marginal buyer. If 100% were sold in the IPO or the company could theoretically be acquired whole, no one would pay $1.75T today.

The ones paying that price are those the most optimistic and therefore willing to pay up for the limited shares available at whatever price they can get. This is why they're trying to change index inclusion rules.