Veteran hedge fund manager Doug Kass says he plans to short SpaceX after record IPO debut
Here is my honest take on how I think a SpaceX Initial Public Offering (IPO) plays out. Day one opens with a massive pump. Retail investors rush in chasing the hype. Early holders and insiders sell into that demand.
Why do I think so? It's fair to say that's how most IPOs have played out for decades.
Then comes the part nobody likes talking about. When all the excitement and hype fade, the stock spends months bleeding lower while day-one retail buyers wait and hope for the next leg up. Months later, day-one investors are underwater, and the headlines have moved on.
That's when I'll start paying attention.
Not when everyone is talking about SpaceX. Not when FOMO is at its peak. When the hype is gone, the volume dries up, and institutions quietly begin accumulating shares at the price they actually wanted. Not at a $2.1 trillion valuation, but at whatever price the market ultimately decides is fair.
I see two ways to play it. Buy at the launch and give insiders the perfect exit, or wait until nobody cares anymore and buy from the people who bought from the insiders.
Warren Buffett's golden rule has always been this: Be fearful when others are greedy, and greedy when others are fearful.
Veteran hedge fund manager Doug Kass isn't waiting for either option. He's going shorter. Now.
I will not be buying the SpaceX IPO.
"At some point, I will be shorting it," Kass continued to write in his Daily Diary on TheStreet Pro. Kass has been navigating markets since the 1970s, including a stint as research director for Leon Cooperman's Omega Advisors.
He correctly warned investors in December 2025 that stocks could retreat 15% to 20% - a call that proved prescient. Now he's turning that same analytical lens on the biggest IPO in stock market history.
SpaceX (SPCX) closed its Nasdaq debut on Friday, June 12, at $160.95, up 19% from its $135 IPO price, valuing the company at approximately $2.1 trillion, according to Yahoo Finance. The stock continued climbing in after-hours trading to $166.76, pushing the market cap toward $2.2 trillion.
Also Read: SpaceX Latest News and Stories
The cold SpaceX IPO data Wall Street isn't showing you
Before getting to SpaceX's financials, the historical record on major tech IPOs deserves a full reading. Because it is honestly brutal.
My review of post-IPO performance data across major tech listings of the last decade reveals a pattern that has held without a single exception.
According to a market analysis report published by the financial investment advisory firm RS Capital, the median year 1 maximum drawdown sits at -54%, while the average year 1 maximum drawdown stands at -55%.
Even the legendary names crashed in year one:
- Facebook: Down 54%
- Shopify: Down 52%
- Snowflake: Down 52%
- Palantir: Down 53%
- Airbnb: Down 39%
- Uber: Down 68%
Source: RS Capital
The speculative ones were far worse. Robinhood fell 90%, Rivian dropped 88%, and Lyft lost 79% from its peak in the first 12 months. Not a single major tech IPO of the last decade escaped this gravity.
Now consider the scale of what's coming. SpaceX, OpenAI, and Anthropic. The three largest potential IPOs in stock market history are all approaching the public markets within the same window.
Their combined valuation exceeds $3.5 trillion. In fact, that's more than every dot-com IPO from 1995 to 2000 combined.
Related: Franklin Templeton CEO sends strong message on SpaceX
History also notes a darker pattern. The two of the largest IPOs by American companies - Visa in March 2008 and AT&T Wireless in April 2000 - both occurred near major market cycle peaks.
What followed? A global financial crisis, as reported by the Bank of England, and the dot-com collapse, as reported by Goldman Sachs, respectively.
SpaceX at 94x revenue: what the valuation actually requires
Kass cited an X post from Vlad Bastion that put SpaceX's IPO price at approximately 94 times revenue, according to TheStreet Pro. Bastion's analysis of 45 years of IPO data found that companies debuting above 40 times sales underperform the market by 58% over the following three years, and by 76% on a style-adjusted basis.
In a CNBC report, SpaceX reported $18.7 billion in revenue for 2025, up 33% year over year, but posted a net loss of $4.9 billion. The company has accumulated a total loss of $41.3 billion since its founding in 2002. In Q1 2026, revenue hit $4.7 billion, but net losses deepened to $4.3 billion as AI data center scale-up costs intensified.
More AI:
- Micron sits at the center of a red-hot chip rally
- IBM CEO sends blunt message on AI and quantum computing
- Anthropic CEO makes shocking admission about AI
If you don't know this already, The Motley Fool report shows that the only profitable part of the business today is Starlink, which generated roughly $4.4 billion in earnings before interest and taxes (EBIT) in 2025 from its satellite internet business. Meanwhile, the AI business lost $6.4 billion. The rocket business is also losing money.
The $28.5 trillion total addressable market (TAM) cited in the prospectus drew sharp pushback.
Aswath Damodaran, who is widely known as the "Dean of Valuation," called the figure a "hallucination" during IPO coverage, according to a CNBC interview.
Morningstar published an analysis suggesting a more reasonable valuation of roughly half the IPO price - $63 per share.
To justify the current valuation, the X post Kass mentioned noted that SpaceX would need to grow by approximately 600 times over the next decade. Musk himself has said the company could be worth $10 trillion to $30 trillion. Kass, plainly, called that claim what he believed it to be.
The governance risk nobody is pricing in
Beyond the valuation debate, SpaceX's governance may give some investors pause. Elon Musk retains majority voting control, leaving retail shareholders with limited influence over major decisions.
The company also absorbed xAI, X, Grok, and related assets without a shareholder vote capable of blocking the deal, the BBC reports.
Related: 'The Big Short' investor describes SpaceX in three words
SpaceX carries $29 billion in long-term debt and raised a record $75 billion in its IPO, with Musk saying the funds will help expand its satellite network and pursue ambitious space-based AI data center projects.
For investors, the biggest risk may be key-man dependence. Much of SpaceX's future remains tied to Musk's leadership, attention, and decision-making. What if SpaceX's biggest asset, Elon, suddenly becomes its biggest uncertainty? Or his attention gets split across half a dozen companies at the exact moment SpaceX needs it most?
What the IPO day means and what comes next
SPCX opened at $150 on June 12, above the $135 IPO price. The intraday high hit $176.52. More than 500 million shares changed hands, according to Yahoo Finance.
That number approached Facebook's first-day volume of roughly 580 million shares in 2012, CNBC noted. Banks also collected approximately $500 million in fees, according to CNBC coverage.
SpaceX allocated 30% of shares to retail investors. That's three times the industry norm. That's an unusually large retail allocation for a company of this scale, and it matters for understanding who is likely holding the most Day 1 exposure.
My final take is that the IPO day is the wrong moment to buy a great company. That's not a knock on SpaceX's technology or Musk's vision but a recognition of how markets work, and how they have worked in every comparable situation on record.
Kass has also made his position clear. The data on post-IPO drawdowns has also made its position clear. The valuation math, at 94 times revenue with $41.3 billion in accumulated losses, validates his take. What happens next is what always happens. Time tells.
Related: Morningstar drops bombshell message on SpaceX IPO
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This story was originally published June 14, 2026 at 3:33 AM.