Stock valuations are based on what investors think the earning potential of a company is. While rocket companies are beyond cool it's a pretty difficult business in which to actually make money.
I think messaging apps are even more difficult, right? SpaceX has made around $4 billion on contracts so far which I would guess is more than whatsapp.
Whenever you have huge fixed capital costs and high per-unit costs your upside is limited. A 10x increase in the whatsapp user base doesn't increase costs much, while SpaceX probably couldn't deliver on a 2x increase in volume for a few years. That's just the handicap of a business that makes real things.
What investors are looking at is potential. The upside for heavy-industry SpaceX is far more constrained than that of a social media company.
A 10x increase in the user base of WhatsApp would make their user base every single human on Earth, give or take a couple hundred million. Probably not going to happen. And even with 1/10 of Earth as its user base, it was making <$1B/year.
I'd argue that the upside of making launches happen at 1/10 the traditional cost, with the potential for easy reusability with minimal refurbishment (which will allow much more than 2x launch volume, and a much greater cost reduction) is larger than WhatsApp's to a hilarious degree.
Yes, but they haven't made $4 billion in profits. That's "just" their revenue from the contracts. Compared to a software company, they have huge capex and huge operating costs.
Super-late reply but yes, agreed. I am wondering how much value they have in capital goods and land? Like if whatsapp goes bust, it's worth zero but SpaceX has some assets it could sell. And again, they have 3,000 employees, I would think buying heavily considers the size of the workforce they are acquiring.
Facebook's acquisition of WhatsApp was probably primarily defensive. By that, I specifically mean, "They were worried that WhatsApp would cause them to lose revenue from their core business, and their valuation of WhatsApp was heavily based on avoiding that potential loss."
