The investment signal to avoid the Procure Space ETF (SPCX) stems from the upcoming public offering of SpaceX, which is being valued at nearly a hundred times its sales, in stark contrast to Amazon's valuation of three times sales. Thebriandecker emphasizes that the critical question is not whether SpaceX is a great company, but rather if there is any upside left at its current price. He estimates that, assuming optimal conditions, SpaceX could reach $100 billion in sales by 2030, which would still equate to an 18 times sales valuation, significantly higher than the typical trading multiple of around 10. Thebriandecker warns that while there is substantial demand from index funds and retail investors, this demand is already reflected in the stock price, and insiders will be able to sell approximately 20% of their shares after the first earnings report, creating a potential oversupply. This situation implies that retail investors may become exit liquidity for early investors, leading to a bearish outlook on SpaceX at its current valuation. For those tracking this investor, it suggests a cautious approach to investing in SpaceX and related ETFs, as the current price may not reflect future growth potential.
Advises against buying SpaceX at its current price due to high valuation compared to potential future sales.