Is SpaceX Overvalued? + What to Do When You're Not Getting Promoted

0:00This Monday.com ad was created by a team of people and AI agents. Reese, our content agent, wrote the copy based on our best practices, like mentioning Monday.com three times. That was the second. Johnny, our coordination agent, built the timeline and kept everyone aligned. Olivia, our human creative director, stayed in the loop. Because agents are great, but they don't always know when a joke lands. She had one note. Tell listeners it only takes minutes to build an agent. So, minutes. Create your own AI agent today on Monday.com. Hey Chicago, class it up with Crocs You know back to school is coming in fast So why wait to find your new fave footwear?

0:39Step into a local Crocs store and step into your new look Try it, style it, make it yours Because the right pair doesn't just show up, it shows off First day fits, handled Walk out ready for whatever's next Visit your nearest Crocs store today When you need to build up your team to handle the growing chaos at work, use Indeed Sponsored Jobs. It gives your job post the boost it needs to be seen and helps reach people with the right skills, certifications, and more. Spend less time searching and more time actually interviewing candidates who check all your boxes. Listeners of this show will get a$75 sponsored job credit at Indeed.com slash podcast.

1:22That's Indeed.com slash podcast. Terms and conditions apply. Need a hiring hero? This is a job for Indeed Sponsored Jobs.

1:36Scott Galloway:Welcome to Office Hours with Prof G. This is the part of the show where we answer questions about business, big tech, entrepreneurship, and whatever else is on your mind. If you'd like to submit a question for next time, you can send a voice recording to officehours of profgmedia.com. Again, that's officehours of profgmedia.com or post your question on the Scott Galloway subreddit and we just might feature it in our next episode. Our first question comes from Reddit user gulliblead37-85. Is Musk a great financial engineer? I don't see how screwing over institutional retail investors with mispriced stock valuation helps with the share price when he wants to sell.

2:09Scott Galloway:And for his SpaceX employees, it's far worse to let them think they are going to be rich and then take it away from them. Not great for morale. Okay, so just some data. SpaceX priced at$135 a share at a valuation of about$1.8 trillion, and the largest IPO in history, bigger than Saudi Aramco. That put the stock at roughly 94 times revenues on 18.7 billion in sales, which was richer than any company in the S &P 500. The next priciest is Palantir, which trades at about 67 times. Only about 4 % to 5 % of the company trades. That's the float. Everything else is currently locked up. The stock zoomed to 225 and then has fallen about 45 % from its peak to 123, which is, you know, so it's technically now a broken IPO, but I wouldn't describe it.

2:54I mean, you could say it's a collapse from its peak. But by the time this airs, just some fine prints, SpaceX will have reported its first earnings and the first big lockup will have come off. So the numbers probably will move again. Now, the lockup, Musk and a group of unnamed big investors are locked up for 366 days until June of next year with no early release. The 366-day term itself is longer than the standard 180 days. So on that narrow point, Musk is the most restricted, not the least. I think to your point, Musk will go down as the greatest engineer of our

3:26Scott Galloway:time, but as a financial engineer, I mean, essentially what you have is he convinced the SEC and Trump and NASDAQ to include him in the 100, which no IPO has ever been included before, meaning trillions of dollars of funds are mandated to put whatever percentage of a weighted index that SpaceX represents that amount of their capital into SpaceX shares. No company right out of the gates has enjoyed that incremental demand. In addition, they were able to go public with just 5 % of the float. Traditionally, in the past, you needed more than 10%. So smaller supply, greater demand, you know, disco, and that is huge demand right out of the gates, which make no fucking sense from a valuation standpoint.

4:10Scott Galloway:And as the lockups come off and people can take advantage of that rich, irrational valuation. They sell. That's what they've been doing. Now, sure, the people who bought in are going to be angry. I don't know what the lockups are on the employees, but his ability to manufacture that type of valuation. I had lunch with a guy here a couple of weeks ago, a nice guy, and a friend of his told me he's made a billion dollars on SpaceX stock. So there are a lot of people out there who will always invest with Elon because he has a habit of getting shareholders a return, or at least most of his shareholders.

4:48Scott Galloway:So I don't, I fail to see how this is a bad thing for Elon Musk that he was able to engineer a pop. Now look out below. One of my failings as an investor is I tend to anchor off what it recently traded at. Yeah, it's 45 % off its peak, but it's only what, five or 10 % off its IPO price. and it's still crazy overvalued. I think this is a$10 to$30 stock. And you want to see creative writing. Look at the analyst reports from Morgan Stanley and JP Morgan. And I forget, there was someone who put an$800 price on this. God, I would, I mean, those people really, it's like, okay, put down the mushroom chocolates.

5:25Scott Galloway:And if you believe that investment banking and wealth management fees don't influence analyst reports, this makes Henry Blodgett in 1999 look responsible. By the way, I think Henry was totally unfairly prosecuted for something everyone was doing and still continues to do by a zealous idiot called our Attorney General Spitzer. or anyways, I wouldn't get near this thing because I wouldn't even short it either because it's a meme stock and he has an ability to fool people into thinking, oh wait, it's about data centers in space or the Reboven or robots or I've got another rabbit I'm stuffing into it.

6:04Look over here, don't look at Tesla. It's an automobile company wrapping steel around an axle. No, it's a software, it's a robotics, it's autonomous. Oh wait, we wanna go to the Carmen. And he has all, literally reading that prospectus was like, we work minus the charm. It was just so insane, all of the bullshit and the pictures of rockets and this flowery talk about becoming an interstellar species. That's just buy my company for an irrational number.

6:34Scott Galloway:And that benefits him in a lot of ways, their ability to go buy companies and backfield evaluation. situation. So I don't, you know, I don't, I think this is a win for them. Two weeks after the IPO, they borrowed$25 billion, the biggest investment grade bond deal of the year with debt running out to 2056. It did this sitting on$100 billion in cash, which tells you the AI build out is just extraordinarily expensive. And he's anticipating that. Management said future money will come from borrowing, not stocks. So the IPO was a one-time sale. The plan was always to lever up. So in sum, the bond, the credit markets are always more telling, but they're less interesting, so they don't get as much coverage.

7:13Scott Galloway:The bond sale clarified the version of the company that people are actually buying, not a rocket company that got profitable and then is layering on AI, but an AI infrastructure bet that happens to own the best launch business ever built. And carrying debt, it won't finish paying off until 2056. The whole thing now rides on not rockets or being an interplanetary species or even Starlink. It's basically going to work or not work based on his AI CapEx bet. So the strategy, inflate the equity, sell 5 % of it once at the peak, then borrow against that valuation while the business is still losing money.

7:55So your employee morale point is interesting. Employees still can't sell a single share. I The first window opens August 6th, two days after the company's first earnings. And even then, only 20%. The rest unlocks in pieces through December. Keep in mind, people always think once the unlock happens, it'll flood the market. But keep in mind, the market knows those unlocks are coming and usually prices them in.

8:20Scott Galloway:Some data on Musk's financial engineering track record. He bought Twitter for$44 billion, then sold it to his own AI company, folded that into SpaceX and all-stock chain, where he sets the price on both sides. And in November 2025, Tesla shareholders approved a pay package worth close to$1 trillion, lifting a stake from about 13 % to 25%. So, yeah, unbelievable financial engineering. His co-conspirators are Trump, J.P. Morgan, and Goldman Sachs, who manufactured a pop. We did call this perfect—I mean, we called this perfectly. We said it would be a 20 % pop out of the gate and then get cut in half.

8:54Right now, it had a 23 % pop, and for a 50 % decline from the IPO price, it would need to be at$65. And I think it's headed there pretty crisply.

9:05Scott Galloway:Anyways, I think on the whole, sure, there's some people going to be angry, but on the whole, a lot of people made a shit ton of money here. Someone told me there's 14 new billionaires in Texas just from SpaceX stock. The capital markets in the United States are a marvel. I think this is low-grade corruption getting to see above artificial scarcity with artificial demand but you know it's legal and he did it but I would stay away from the stock personally both on the short side and the long side because I'm a meme stock and go to 200 bucks if he announces that oh I'm putting quantum computing on the moon that's his latest bullshit look over here not my actual shitty business here anyways thanks for the question Question two.

9:52Scott, Travis here from New York. So I want to say it was a pleasure to meet you and Ed after the live recording you did in New York. Thanks again for signing my book. I've been in my corporate job for almost nine years now, and one of my peers was recently promoted to become my boss. Things have been a little uncomfortable since then. He seems to favor some of my coworkers, giving them the better projects while I often end up with the less desirable ones. I'm not really in a position to look for a new job right now because my wife is currently job hunting, so we need the stability of my income.

10:23So two questions here. One, how do you build a good relationship with a boss when you're clearly not one of their favorites? I worry that trying to get close to him will come across as fake and maybe make things worse. And two, how do you handle office politics when they conflict with your core values? Where do you draw the line between adapting and compromising too much? Thanks for your perspective. You've helped me to become the man I am today, and I'm truly grateful. Thank you.

10:51Scott Galloway:Thanks for the kind words, Travis. So a few thoughts. The American corporation is the greatest wealth generator in history. There's no better way to get rich slowly than working at a good company. And they not only will remove that mole off your back with the health insurance plan, but they're generally good at investing in human capital. They're incredible platforms. I'm shocked at how shocked people are when they leave an Alphabet or a Goldman and they find that they're not as, they don't get their calls returned as crisply. The platform of these companies is really powerful. Now, the downside is corporate bullshit and injustice are just part of the game.

11:30Scott Galloway:That's just something you got to put up with. And part of being successful at a corporation, quite frankly, is learning how to handle what is real or perceived injustice. I would try and scan your own emotions and say, is he really favoring other people or are you a bit jealous or envious and notice things and perhaps maybe are sensitive to the fact that he's cognizant of your friendship or I don't know if your peers or friends and is just trying to be more equitable. I mean, quite frankly, how much of this is your perception in you versus him being unfair? Now, the way out of this is through it, and that is to do your job, be really good at what you do.

12:12But also in your year-end review, when you sit down with him, I think it's fair to say, you know, look, this is, I want to discuss this with you. This is what I perceive. I feel like, I mean, just be very transparent. It's a little bit awkward for me and a little bit disappointing that one of my peers got promoted over me. I think that vulnerability is powerful and that type of honesty. And say also, and tell me if I've got this wrong, I sometimes perceive that I'm not getting the better work here. And I realize that, you know, is that incorrect? I would wait till the appropriate format for that.

12:50But I think being very honest and authentic is the way to approach this.

12:55Scott Galloway:I think the best relationships are open and honest ones. Do not be a squeaky wheel and a pain in the ass through the year. Just do your job. Be a good soldier. Try and be really helpful and thoughtful to other people. you know, all the stuff that makes you a successful team member. But I do think it would be appropriate if this continues to bring it up in your review and just be very open and honest about what you're sensing and say, is there something I can do? Or how do I, in fact, get on this better assignments? Is there a reason? Am I imagining this? Is there a reason I haven't been getting this type of work, which I perceive as better?

13:30If it continues, then I would think about, A, the way through this is through it.

13:37Scott Galloway:If you continue to do good work, try and find other opportunities where you have a different boss. Sometimes people just don't jive. I remember saying to some of the people that were working with me, I remember saying, you're really talented. We don't jive. I get the sense that generally speaking, we're just kind of oil and water. So what I want you to do is I want you to report to someone else because I think you're going to be more successful because humans are emotional beings. And there's some people we warm to and others that we don't. What you don't want is to get in the way of someone's economic livelihood and reduce the quality of their good work because of some weird fucked up personal dynamic.

14:18So one, some self-analysis here, boss.

14:22Scott Galloway:How much of this is on you? to at the end of the year in review, be very open and honest and try and be constructive. What can I do to try and get on this better work that I perceive as being better and be very open and honest about the way you're feeling? And if it continues, see if there's a way to find another team and work for another team and see if you can, you know, quite frankly, just get out of this weird dynamic that quite frankly might not be either of your fault. It just, it might be awkward or strange for him or her as well. And sometimes it just makes sense to get to a different environment.

14:54Scott Galloway:But congratulations. It sounds like you have some nice things in your life and you got a good job or it sounds like you have a good job. And so, yeah, I don't, you know, try and look at the more positive side of this. Anyways, thanks for the kind words and good to see you at the show. We'll be right back after a quick break.

15:26Support for the show comes from Built. There's a whole system in your brain nicknamed the reward system. So why not take a page out of your brain's book and create a reward system for your housing payments? That's exactly what Built did. You can redeem Built points for flights, hotels, lift rides, Amazon.com purchases, future housing payments, and more. Built also gives every member access to its agentic neighborhood concierge in the Built app. It's basically an assistant that's connected to both your home and over 50 ,000 merchant partners. So, you can ask it to pay for your rent, make a dinner reservation, book a fitness class, schedule a lift, and more.

15:59It can help you out while automatically applying your member benefits along the way. Benefits aside, if you've been curious about what a Gentic AI actually looks like in practice, this is an example of just that. It's not just for renters. Build works for mortgages as well. When your housing payment is one of your biggest monthly expenses, you might as well earn points on it. You can download the Build app and join the membership for where you live at joinbuild.com slash propg. That's J-O-I-N-B-I-L-T dot com slash propg. Use our links so they know we sent you.

16:34Support for the show comes from Shopify. If you've been sitting on a business idea, Shopify makes it easy to make it happen. Everything you need to start selling is included and ready from the moment your first customer is ready to pay. You'll get tools, including Shopify Checkout, which helps more of your customers finish their purchase. And when they come back, their details are already saved. One tap and they're done. Because the hard part should be coming up with a great idea, not processing a transaction. When the time comes for someone to check out, you want to make things as easy for your customers as possible.

17:06With Shopify handling the setup and checkout, you have more time for the important things, whether that's planning your next campaign, developing your newest offering, or taking a well-deserved nap. Shopify powers millions of businesses worldwide, which means you'll be using the same selling platform as some of the biggest names in the game, including Mattel and Gymshark. With Shopify, nothing stands between your idea and a real business. So go make it one. Start your free trial at shopify.com slash prop G. That's shopify.com slash prop G. Shopify.com slash prop G.

17:45Support for the show comes from LinkedIn. If you're a small business owner, you don't need me to tell you how much hiring great people matters. But the time and resources you have to spend to get it right are precious commodities. Sourcing, connecting with, and screening candidates can quickly eat into time better spent on your customers. That's where LinkedIn Hiring Pro comes in. It's designed to be your hiring partner, helping you source the right candidates faster. That way, you can hire with confidence without making it feel like a full-time job. LinkedIn Hiring Pro simplifies the entire process, all the way from writing your job post to shortlisting candidates and running AI-powered initial interviews.

18:19Plus, it does it all through a conversational interface where you can just describe what you're looking for in plain language. LinkedIn says nearly 60 % of hirers find someone to interview within a week. With Hiring Pro, you spend less time searching and more time connecting with the right talent. So instead of sifting through piles of resumes, you get a tight, high-quality shortlist that actually moves things forward. Join the 2.7 million small businesses using LinkedIn to hire. Get started by posting your job for free at linkedin.com slash prof. Terms and conditions apply.

18:56Scott Galloway:Welcome back. Question number three comes from RelativeTrouble299 on Reddit. Hi, Scott. You've talked about the huge advantages of moving to a major city when you're young to capture opportunity and network effects. This was my path. I moved to London right after university, built a solid career in finance, and met my fiancée here. We love the city. The problem is we both want a large family. Living in a tier one city with multiple kids feels like the biggest display of wealth short of owning a private jet. While I know we're fortunate to even have that option, it's a massive commitment, and lately the call to move to the countryside for space and a lower cost of living is getting much stronger.

19:28Scott Galloway:I'd love to hear your take. Do the benefits of big city living naturally drop off as you get older and start having kids, especially relative to the insane expense? Or is giving up the city a mistake in the long run? Boss, you just answered your own question. I was forced out of Manhattan. I love Manhattan. I had two kids under the age of three. We were looking, my oldest, we were looking at pre-K or whatever it's called. It was going to be$48 ,000 for him to play with blocks. And by the way, we applied to seven schools, and because it was speech delayed, he got into none of them. And I was so upset that I said, we're moving to Florida.

20:03And it was just an incredible move because the bottom line is we couldn't afford to live in the city.

20:09Scott Galloway:It was just—and I'm not saying we couldn't pay our rent. I'm saying it was taking an emotional toll on us. And what you're talking about is welcome to the work week in life. And that is when it's just you and you're spending all your money on drinks and Ubers and you don't need to worry about a kid and life insurance and preschool, you can get a 500 square foot apartment. And once you have kids, the majority of people leave the city because they want a yard. They want a pool. Maybe they want to join a country club. Maybe they want good public schools, whatever it might be. but the strain, and there's always that family that kind of figures it out, that stays in the city, that dances between the raindrops.

20:51Scott Galloway:And then the other side is the ultimate wealth flex is having three kids in Manhattan. That means you're making a few million dollars. No, it sucks to be a grownup. You move. And I mean, obviously try and maintain professional trajectory, but having a backyard where your kids can play and walk to school. And yeah, that's 90 % of us do that. We eventually leave the city, move to the suburbs, move to the geographic arbitrage, lower cost of living, better lifestyle. Probably means dad and mom might have to commute more or maybe do one or two days a year remote. Fine. But this is what we do. And your priorities change.