Short seller Jim Chanos on Wednesday criticized the valuation underpinning SpaceX's planned public offering, saying the company’s $1.75 trillion price tag rests on optimistic expectations rather than demonstrable fundamentals.
SpaceX has scheduled an initial public offering in New York for Friday that seeks to raise $75 billion. If completed at that scale, the deal would be the largest IPO on record, nearly three times larger than the Saudi Aramco listing in 2019. The company plans to trade under the ticker SPCX.
Speaking at an iConnections conference in New York, Chanos said: "The company is not worth, in my opinion, $1.75 trillion based on any reasonable assumptions over the next five years."
He pointed to the valuation level and governance matters as reasons the stock could attract short interest. At the same time, Chanos acknowledged reluctance among some short sellers to take positions against the company, noting recent rallies in large technology stocks have inflicted losses on bearish bets.
Asked about the difficulty of shorting such a highly priced debut, Chanos said: "We really can build whatever stories we want - colonies on Mars, factory tunnels, data centers in space - to justify the valuation. In bull markets, you put a premium on promises and in bear markets, you put a discount on reality."
Chanos contrasted SpaceX’s valuation metrics with those of Tesla, observing that SpaceX trades at roughly 90 times sales while Tesla trades at about 14 times sales. He also cited estimates from S3 Partners that short sellers wagering against Tesla have shown paper losses of $27 billion since June 2021, and he noted Tesla shares have risen more than 2,500% over the past decade.
Beyond SpaceX, Chanos reiterated his negative view of the data center industry. He described the sector as a "bad business" that produces low-single-digit returns on capital. He has maintained a bearish stance on data center operators since 2022, arguing these businesses behave more like REITs or equipment-leasing firms than growth-oriented technology companies.
Chanos added that firms which purchase chips from suppliers such as Nvidia and then lease that hardware to hyperscalers face significant depreciation risk and limited pricing power, reinforcing his caution about the economics of that business model.
His remarks underscore the debate around how to price a debut from a high-profile private company with wide-ranging ambitions and complex governance arrangements, and they highlight continuing scrutiny of capital-intensive infrastructure plays in the technology ecosystem.