SpaceX is going public and retail investors are trampling each other to buy shares that even they admit might be overvalued. Some are calling the valuation "stupid." They're still buying.
This is the investing equivalent of ordering the fish at a highway rest stop. You know it's a bad idea. The guy behind the counter knows it's a bad idea. You're eating it anyway because you saw a picture on the menu and it looked fine.
The alarm bells are ringing so loud that retail investors can hear them through their noise-canceling headphones. They're interpreting the alarm as a dinner bell. When your own team is saying the price is stupid before the thing even trades, that's not a red flag. That's a f*cking air raid siren with a PowerPoint presentation attached.
But small investors are scrambling. Scrambling implies urgency and desperation, which tracks. Nothing says sophisticated capital allocation like rushing to overpay for something because you're worried you'll miss your chance to overpay for it.
SpaceX builds rockets that land themselves. Impressive. Their investors are about to learn that portfolios also land themselves, just usually at zero.
The beauty of this setup is that everyone involved knows exactly what's happening. The valuation is stupid. They want in anyway. It's not ignorance. It's not naivety. It's pure, distilled FOMO with a brokerage account and a dream of telling people at parties that they own SpaceX shares.
Elon Musk convinced the world he could build reusable rockets. Now he's convinced retail investors they should pay stupid prices for the privilege of funding his Mars colony. One of these achievements is more impressive than the other, and it's not the rockets.
Photo by Sven Piper on Unsplash
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