Steve Eisman, the investor who became famous for his prescient bet against subprime mortgages ahead of the 2008 financial crisis, says he wants no part of SpaceX’s upcoming initial public offering — and the company’s own prospectus is his key piece of evidence.
Eisman, host of the podcast “The Real Eisman Playbook” and former senior portfolio manager of Neuberger Berman, told CNBC’s “Squawk Box” on Monday that he is ordinary “not a fan” of the offering, which is expected to price as early as Friday.
According to Eisman:
“Let’s see. If you read the prospectus, I mean there are some funny things in the prospectus. For example, my favorite part of the prospectus is that one of the things that SpaceX wants to do is mine asteroids. I thought that was kind of funny.”
His more substantive concern is the company’s transition to AI. Eisman noted that capital expenditures as a percentage of revenue increased from 42% in fiscal 2023 to 215% in the most recent first quarter, driven by spending on AI infrastructure. He called Grok, SpaceX’s AI product, “not a world-class AI company” and warned that AI manufacturing overall is “highly commoditized,” with “no moats.”
Eisman pointed to the SpaceX S-1’s total addressable market figure of $28.5 trillion, 85% of which is attributed to AI, noting that “the entire company is betting on AI in terms of its future, not on SpaceX and not on Starlink.”
According to Eisman:
“What I like about the S-1 is that it reads like a science fiction novel. It really does.”
He clarified that he has no interest in shorting the stock. “I have no interest in shorting this. I’m just not playing,” he said.
Eisman previously bet against Tesla before exiting the short position in 2020. “If you’re short, you should walk away. There’s no glory in losing money,” he said at the time.
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Featured image: Shutterstock/Rana Ali Hasan Arif/Nikelser Kate