Opinion: SpaceX increases pre-IPO valuation through non-GAAP metrics, making true value difficult to accurately estimate

BlockBeats News, May 23 — SpaceX recently filed for an IPO, with its mission statement: "To build the systems and technologies necessary for making life multi-planetary, understand the true nature of the universe, and extend the light of consciousness to the stars." Behind this grand narrative, business ultimately still needs to be measured in terms of value, and retail investors are often the target of the first share sales after an IPO launches, with insiders who acquire shares at a fixed price hoping to drive up the stock price through market hype and sell some shares for profit.

According to Nasdaq disclosure data, since the 1980s, the proportion of loss-making companies among IPOs has increased from 20% to 80% annually. Nearly two-thirds of companies perform worse than the market three years after IPO, with most (64%) lagging by more than 10%. While some companies perform well in the long term and some loss-making companies eventually turn profitable, accurately pricing new IPOs and assessing their investment value is very difficult. Many companies increasingly use non-GAAP terms that do not comply with US GAAP accounting standards.

Although non-GAAP metrics can sometimes be useful, they are often used to make a company appear more valuable, and SpaceX also uses "Adjusted EBITDA" (Earnings Before Interest, Taxes, Depreciation, and Amortization). This means that in financial disclosures, only net income or loss is considered, excluding depreciation and amortization, share-based compensation, impairments, restructuring costs, interest expenses and income. The result is a figure that is much higher than the actual GAAP net profit. This allows the company to present an image to investors that "if you ignore these disturbances, our operations are actually very healthy and strong," especially suitable for asset-heavy, early-stage growth companies like SpaceX that have made large initial investments and have not yet achieved high profits, making it easier to gain market recognition and higher valuations during IPO.