CNBC’s Jim Cramer said Friday it’s not too late for investors to buy. space x After a blockbuster debut, but only if they agree to view the stock as a long-term bet on the future rather than a traditional investment.
“Is it too late to join SpaceX?” said the “Mad Money” host. “If you can think of this as a different type of stock rather than a short-term or medium-term investment, we’d appreciate it.”
SpaceX went public on the Nasdaq on Friday, opening at $150 per share but rising to $176. Elon Musk’s rocket company closed with a market capitalization of $2.1 trillion. The strong rally quickly reignited concerns that the stock’s valuation exceeded its current financial performance. But Cramer said investors aren’t buying SpaceX solely for its current profits.
“This is a long-term imperative for space exploration,” Kramer said.
Rather than focusing on current losses and cash outflows, Cramer argued that many investors support Elon Musk’s long-term vision and pipeline of projects that could take years to fully realize.
“I think they considered the risks and recognized that there was potential for loss as far as the eye could see,” he said.
That focus on looking beyond short-term results helps explain the stock’s strong debut, Cramer said. Although skeptics question the company’s valuation, shareholders are focused on the possibility that SpaceX’s future opportunities are much greater than what is currently reflected in the business, he said.
Mr. Kramer told investors who share this outlook that they should view falling stock prices as an opportunity, not a reason to exit stocks.
“If it goes down, you should buy more, because the upside is immeasurable,” he said.
Cramer also praised the handling of the IPO by Goldman Sachs and Morgan Stanley, saying the two banks leading the deal balanced institutional and consumer demand while avoiding a disruptive first-day surge that could cause problems later. Cramer’s Charitable Trust, a portfolio used by CNBC Investing Club, owns Goldman stock.
“The stock opened at a reasonable price relative to its public offering price. Not high enough to prompt a reversal, but not low enough to incite panic,” he said. “That’s amazing.”
