In a pitch to private investors, Elon Musk once predicted that one of his companies would quintuple its revenue to more than $26 billion and nearly quintuple its customer base by 2028.<\/p>\n
That company was Twitter and those projections<\/a> were made as Mr. Musk prepared to buy the social media company for $44 billion in 2022.<\/p>\n Today, Twitter, which has been renamed X, has fallen far short of what Mr. Musk said would happen. The social media platform\u2019s ad revenue plunged 65 percent last year. And it was ultimately folded into SpaceX, Mr. Musk\u2019s rocket company, this year.<\/p>\n Now as SpaceX readies for a blockbuster initial public offering<\/a>, Mr. Musk and his investment bankers are selling even loftier propositions about what the rocket and artificial intelligence company will achieve. But those proclamations, coupled with Mr. Musk\u2019s history of overpromising<\/a>, have some investors increasingly worried that SpaceX \u2014 which priced its offering at a $1.77 trillion valuation and is set to begin trading on Friday \u2014 may burn them.<\/p>\n \u201cIt really does feel very much a \u2018don\u2019t look at the man behind the curtain\u2019 situation,\u201d said Jim Chanos, the founder of the investment firm Chanos and Company, who predicted the 2001 collapse of Enron, the energy company that was found to have engaged in accounting fraud.<\/p>\n Mr. Chanos and others said they were concerned with SpaceX\u2019s finances. The company lost $4.3 billion in the first three months of the year alone and is spending heavily on A.I. development. Revenue was $4.7 billion and growing, but it was far lower than that of tech giants like Meta, which brought in $56.3 billion in the same period and has a stock market valuation of $1.4 trillion.<\/p>\n At the same time, SpaceX has promised that its total addressable market \u2014 which is its revenue opportunity if it captured all the demand across its various industries \u2014 is the largest \u201cin human history\u201d at $28.5 trillion. The figure, which depends on SpaceX proving that it can put A.I. data centers in space and develop factories on the moon, dwarfs China\u2019s annual gross domestic product by more than $8 trillion.<\/p>\n Michael Burry, a hedge fund investor featured in the book \u201cThe Big Short\u201d for his predictions on the 2008 financial crisis, said in a Substack discussion last month that any increase in SpaceX\u2019s stock after its I.P.O. would \u201cbe on hype and technicals.\u201d<\/p>\n \u201cNothing in that S-1 suggests it is worth $1 trillion let alone $2 trillion,\u201d Mr. Burry wrote, referring to the company\u2019s I.P.O. filing.<\/p>\n Even some SpaceX shareholders have doubts. Ross Gerber, the chief executive of Gerber Kawasaki, an investment firm that owns SpaceX stock, said the company\u2019s projections reminded him of unverified information that young start-ups used to woo investors. He said he was alarmed by SpaceX\u2019s valuation of $1.77 trillion, which would be more than four times the $400 billion that the company was valued at just 13 months ago.<\/p>\n \u201cInvestors are paying an extremely high price for this stock,\u201d Mr. Gerber said.<\/p>\n A SpaceX spokesman did not return a request for comment.<\/p>\n SpaceX\u2019s bankers, including Goldman Sachs, which is leading the I.P.O. process, have added to the sweeping projections. The Financial Times<\/a> earlier reported that Goldman had told a potential investor that it expected SpaceX\u2019s total revenue to reach $474 billion in 2030, up from $18.7 billion last year. Morgan Stanley, which is also working on the I.P.O., said in an analysis shared with investors that it anticipated SpaceX\u2019s revenue would hit $3.4 trillion by 2040, according to The Wall Street Journal<\/a>.<\/p>\n Goldman and Morgan Stanley declined to comment.<\/p>\n Morningstar, an investment research company, issued a more sober analysis<\/a>. The firm said that SpaceX\u2019s I.P.O. price was \u201covervalued\u201d and that the company was worth around $780 billion. Nicolas Owens, a Morningstar equity researcher, gave SpaceX a 7 percent chance of getting its latest rocket, Starship, to a point where it can be used over and over again like a regular plane, and proving that A.I. data centers were cheaper and more effective than their terrestrial counterparts. In the most optimistic scenario, Mr. Owens said, SpaceX could be valued at $1.97 trillion.<\/p>\n \u201cWe\u2019ll know in two to three years if Starship is reusable or a GPU rack in space will be viable or offer some cost savings,\u201d he said, referring to the computer chips used to power A.I. technology. \u201cBut the company is asking everyone to decide on Friday if that\u2019s possible and what it\u2019s worth.\u201d<\/p>\n Mr. Musk has also shown a propensity to change his business goals on the fly<\/a>, analysts and investors said. It was not until last year that he first spoke of data centers in space<\/a>, and he doubled down on the idea in February after merging SpaceX with his A.I. company, xAI.<\/p>\n