$SPCXB I jumped a bit yesterday, but the earnings report quickly knocked it down:
1. Although business revenue exceeded expectations, cost investment was even bigger. And the company said that costs will increase in the next two quarters, so people were basically scared off by Musk’s boldness.
2. Starlink is now its only cash cow. Revenue is 4.291 billion, accounting for 55% of total revenue. User growth reached 12 million—basically doubled—but average revenue per user fell from 85 to 66, which suggests it has also hit a bottleneck.
Meanwhile, its rocket business—the old mainstay—lost even more money. In Q2 it lost 542 million, with losses expanding by 47%.
Its AI business has become its biggest cash sink. In Q2 it spent 18.3 billion but only earned back 2.5 billion. Even the cash-cow business can’t fill this hole, and Q3 and Q4 are expected to be loss-making too—pretty scary.
3. It seems the strategy of selling $SPCXB in time was the right one. This year should be a low point for its stock price. SpaceX really is a great company, but right now it may not be a great stock price—and it’s likely to dip a bit more.
Starlink may be a money printer, but it can’t support the way the rocket and AI businesses are being built with this kind of approach. Business growth isn’t done like this—seizing market share certainly matters, but you can’t keep adding leverage.
In the end, one more thing: it still has to be $SPCX . Whose earnings report can be so good-looking—feels like watching a sci-fi movie.
1. Although business revenue exceeded expectations, cost investment was even bigger. And the company said that costs will increase in the next two quarters, so people were basically scared off by Musk’s boldness.
2. Starlink is now its only cash cow. Revenue is 4.291 billion, accounting for 55% of total revenue. User growth reached 12 million—basically doubled—but average revenue per user fell from 85 to 66, which suggests it has also hit a bottleneck.
Meanwhile, its rocket business—the old mainstay—lost even more money. In Q2 it lost 542 million, with losses expanding by 47%.
Its AI business has become its biggest cash sink. In Q2 it spent 18.3 billion but only earned back 2.5 billion. Even the cash-cow business can’t fill this hole, and Q3 and Q4 are expected to be loss-making too—pretty scary.
3. It seems the strategy of selling $SPCXB in time was the right one. This year should be a low point for its stock price. SpaceX really is a great company, but right now it may not be a great stock price—and it’s likely to dip a bit more.
Starlink may be a money printer, but it can’t support the way the rocket and AI businesses are being built with this kind of approach. Business growth isn’t done like this—seizing market share certainly matters, but you can’t keep adding leverage.
In the end, one more thing: it still has to be $SPCX . Whose earnings report can be so good-looking—feels like watching a sci-fi movie.