Add hedge funder David Einhorn among the big name investors that are critical of the recent SpaceX (NASDAQ: SPCX) IPO and high valuation for the Elon Musk-led company. Einhorn is no stranger to taking on Musk and his latest quarterly letter targets SpaceX in multiple ways.
Einhorn Criticizes SpaceX IPO
Greenlight Capital founder Einhorn has previously challenged Musk, taking short positions and publicly criticizing Tesla Inc. (NASDAQ: TSLA) stock.
In Greenlight's recent quarterly letter, which also celebrated the company's 30th anniversary, Einhorn took multiple shots at SpaceX and the IPO process.
Einhorn called the IPO "a marker that a speculative top is near," as reported by Business Insider, which viewed the letter.
"We don't know if it is best described as the meme-ification of the market at scale, the latest proof that the markets are 'broken,' a remarkable manipulation of the IPO process."
Einhorn congratulates investors who got into SpaceX in private funding rounds, who have now won big with the new valuation, and also criticizes the stock being included in indexes despite floating less than 5% of the company.
"Just another insult to value investing," Einhorn says, taking a shot at the index inclusion changes made specifically for SpaceX.
Einhorn also takes a shot at rating agencies who gave SpaceX investment-grade ratings despite not having positive cash flow, saying this may have been "even more questionable behavior than the equity holders."
"We can't find any other examples of investment-grade ratings being awarded to a company with a multi-year forecast of negative free cash flow and no history of generating free cash flow."
SpaceX's Path to $1 Trillion Revenue
While most of Einhorn's letter targets the IPO process and the company's high valuation, the hedge funder directly targets SpaceX and Musk's promise that the space company will hit $1 trillion in annual revenue by 2030.
Einhorn recalls in the letter a conversation with an unnamed investor who has billions invested in the Musk-led company and highlighted the $1 trillion revenue as one of the reasons to invest.
"When we observed that $1 trillion would exceed the annual revenue of either Amazon or Walmart and asked him to support his claim, he offered no explanation and instead pivoted to a rant about short sellers," Einhorn said in the letter.
Einhorn said that it might be fair for this investor to believe in the $1 trillion revenue goal as they're "simply repeating Elon Musk's forecast."
What's Next for Einhorn?
Greenlight stopped taking new investments earlier this year. Celebrating its 30th anniversary, Einhorn channeled rapper Eminem in the letter and at a public anniversary party, according to the report.
"Lose yourself in the Greenlight, the moment you own it, you better never let it go. You only get one shot. Do not miss your chance to grow. This opportunity comes once in a lifetime."
DME Capital Management, the successor to Greenlight Capital, recently unveiled new investments in companies that could be bought out and are subject to spinoffs.