2 weeks after the IPO. market actions suggest that Cramer knew what he was talking about. His warning about the "$37 billion in cumulative debt" was warranted. SpaceX stock down again, shaving off some IPO gains; confirms debt offering Also on Monday morning, SpaceX confirmed its first-ever bond sale in a filing. SpaceX confirmed that it "intends to use the net proceeds from the Notes offering to repay the outstanding borrowings under its bridge loan facility in full" and for other related fees and expenses. suggesting that more debt offerings in the future.
judge a company's financial health by its actions in the debt market Its financial position is so weak that, 2 weeks after it had raised $85.7 billion cash from the IPO, It had to turn to the bond market to borrow an additional $100.8 billion cash Bond Traders Stunned as Losses on SpaceX’s New Debt Keep Growing SpaceX’s blockbuster bond sale is weakening so quickly in the secondary market that traders say they can’t recall another recent deal that widened this sharply. Paper losses on SpaceX’s $25 billion offering have mounted since the debt began trading and totaled roughly $305 million as of late Thursday relative to Treasuries. The longest-dated SpaceX bonds, which drew more skepticism than those with shorter maturities, have effectively erased all the tightening from underwriters that followed as orders swelled to nearly $90 billion.
This is just speculation, but I bet Verizon and AT&T are really regretting AT&T wasn't able to close the sale (and doors) on T-Mobile a few years back. https://www.investors.com/news/technology/spacex-stock-spcx-elon-musk-acquire-tmobile-wireless-firm/
Interestingly, several months ago when when SpaceX announced the Echostar spectrum buyout, I wondered if Verizon Wireless could be the next major spectrum buy. I have been watching the Echostar sage for several years waiting for the government to step in and force Echostar to sell this spectrum off. Years ago before Starlink proved its worth, I knew it would completely obliterate the satellite communications industry. As this is my industry, I have had endless conversations with those in the industry and the vast majority of them dismissed Starlink. Back then I didn't expect Starlink to pursue wireless spectrum at this aggressive of a rate. Since the widespread advent of cell service, back when Sprint commanded the industry (pre-sprint PCS & Verizon), I have watched Sprint fumble the commanding technical advantage over and over. Sprint spun off its coveted 850mhz spectrum for the 1900 PCS allocation. That spin off became 360 degree communication, which became AllTel, which was later purchased by Verizon. This 850mhz spectrum is what allowed Verizon to backstop its commanding lead in coverage over the last two decades (superior building penetration and regulations required full buildout, thus superior rural coverage). And of course, Sprint fumbled its 1900 PCS, 2100 and 2500 mhz spectrum, again, which has allowed Tmobile to vault ahead to become a industry leader. Verizons superior coverage has allowed them to hold the premium customers and provide a premium price. However over the last 5 years or so, I have observed Verizon slowly losing this advantage, mostly due to the same incompetence I have observed with Sprint in years past. Once Starlink announced its Direct to Cell service, i felt this was the first nail in Verizons coffin - They have lost the rural coverage advantage and fumbled it to Starlink's T-Mobile partnership. Verizon now faces the same problem as Sprint did - They have no real supplemental business or partnerships and hold massive amounts of debt. Att and Tmobile will not be allowed to merge for regulatory reasons and Verizon will slowly bleed off their best customers. Their excellent customer service is gone. Starting Monday, Verizon will be removed from the Dow Jones. Currently, Tmobile would be a better acquisition for SpaceX, but both come at a heavy premium. VZW has had a bipolar relationship with Fios, divesting then reacquiring, with the most recent reacquisition with Frontier this year. In 5 years or so once Starlink is very well established, I would not be surprised to see the wireline side get spun off, leaving the wireless side ripe for acquisition at a great price.
According to barchart, In less than 3 weeks, SpaceX Stock Has Already Lost Most of Its IPO Gains. It’s Not Time to Buy Until Shares Fall Below its IPO price of $135. A Nasdaq study indicates that IPOs generally tend to underperform in their first three years, with 64% of them more than 10% behind the overall market's return.
traders heed Cramers' warning about the humongous cumulative debt and unprofitable operation. from a high of 225 on 17 Jun, Space X stock price has dipped another 4+%, closing at ~~149.5, heading toward its IPO price of 135, or even lower
IMO, the merger will probably happen next year because it must be completed before a new administration takes over. Unlike Elon's previous mergers, it won't be a rubber stamp.
