Davis Wilson:

[SPACEX] The Math Is UGLY

You can love a business. You can believe in its future. You can even be right about where the business is going. But if you overpay, you'll still lose money. That's exactly what I'm seeing with SpaceX.

There's no question it's an incredible company. But at a rumored $1.75 trillion IPO valuation, that price tag isn't just ambitious… It's absurd.

To understand why a $1.75 trillion price tag is so jarring, you have to compare it to the market's other large tech companies. SpaceX IPO investors will pay well over 100x sales. Meanwhile, the current most "expensive" mega-cap stock is Broadcom at just 21.7x sales.

But this story gets even worse… PitchBook recently argued that a $1.75 trillion valuation is "not so crazy" if you look far into the future. Their forecast suggests SpaceX could hit $150 billion in revenue by 2040.

As an analyst, this is where I run for the exit. If you buy this IPO at $1.75 trillion, you are paying 12 times revenue on numbers that are 15 years away. 15 years! In the investing world, 15 years is an eternity.

For now, know that I'm urging you to stay AWAY from this IPO.

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Greg Guenthner:

Amazon Hits Sellers With 'Fuel Surcharge' As Iran War Roils Global Energy Markets

The war in Iran has hammered global oil markets, with gas prices in the U.S. spiking significantly. Amid the rise in transportation costs, Amazon has instituted a new 3.5% fuel surcharge for sellers that use its distribution network. 

The policy has the potential to inflict significant new costs on the untold merchants that rely on the e-commerce giant to sell their products.

Amazon said that the surcharge would be in place for the foreseeable future, although the company said it will continue to evaluate a potential policy shift as market conditions evolve.

"Elevated costs in fuel and logistics have increased the cost of operating across the industry," a spokesperson said. "We have absorbed these increases so far, but similar to other major carriers, when costs remain elevated we implement temporary surcharges to partially recover these costs." The spokesperson added that the surcharge was "meaningfully lower than surcharges applied by other major carriers."

The new policy will take effect on April 17 and will impact sellers who use the company's Fulfillment by Amazon service. Amazon doesn't disclose how many merchants use FBA, but the program underpins the vast majority of third-party sales on its platform.

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Ray Blanco:

SpaceX Tries To Convince FCC That Amazon Put Satellites Into Wrong Altitude

Starlink operator SpaceX claims that Amazon violated orbital debris requirements by launching satellites into initial altitudes that are too high, increasing the risk of collision with other satellites and spacecraft. 

SpaceX, which recently reported two Starlink satellite failures that created new space debris, yesterday accused Amazon and its launch partner Arianespace of negligence that "needlessly and significantly increases risk to other operational systems and inhabited spacecraft."

Amazon Leo, formerly known as Kuiper Systems, is launching satellites into low-Earth orbits (LEO) to compete against Starlink's much larger constellation of broadband satellites. Amazon denied that its launch altitudes violate any requirements or impose a safety risk and said SpaceX itself helped Amazon launch satellites into a similar altitude last year when Amazon used SpaceX as a launch partner.

SpaceX only objected to the launch parameters after moving its Starlink satellites into nearby altitudes, Amazon said. Changing the altitude of a recent Leo launch would have delayed it by months, according to Amazon. 

Both Amazon and SpaceX have accused each other of using Federal Communications Commission proceedings to delay the other's satellite launches at various times over the years.

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