Jim Cramer says it’s not too late to buy SpaceX — under one condition
CNBC’s Jim Cramer said Friday it’s not too late for investors to buy SpaceX after its blockbuster debut — but only if they’re willing to view the stock as a long-term bet on the future rather than a traditional investment.
“Is it too late to get into SpaceX?” the “Crazy Money” host said. “If you’re willing to look at this not as a short- or medium-term investment, but as a different type of stock… then you have my blessing.”
SpaceX opened at $150 per share on Nasdaq on Friday and rose to a high of $176. Elon Musk’s rocket company closed the session with a market value of $2.1 trillion. The strong rally quickly reignited concerns that the stock’s valuation may have exceeded its current financial performance. But investors aren’t buying SpaceX just because of what it earned today, Cramer said.
“This is a long-term call for space exploration,” Cramer said.
Cramer argued that instead of focusing on current losses and cash outflows, many investors are embracing Elon Musk’s long-term vision and a series of projects that may take years to fully realize.
“I think they assessed the risk and realized there could be losses as far as the eye could see,” he said.
A willingness to look beyond near-term financial results helps explain the stock’s strong run, according to Cramer. While skeptics have questioned the company’s valuation, he said shareholders are focusing on the possibility that SpaceX’s future opportunities could be much larger than those currently reflected in its business.
For investors who share this view, Cramer said pullbacks should be viewed as opportunities, not reasons to abandon a stock.
“If it goes down, you should buy more because it’s impossible to understand the rise,” he said.
Cramer also praised the handling of the IPO by Goldman Sachs and Morgan Stanley, saying the deal’s two lead banks struck a balance between institutional and retail demand and avoided the kind of chaotic first-day swings that could spell trouble later. Cramer’s Charitable Trust, the portfolio used by CNBC Investment Club, owns shares of Goldman.
“The stock opened at a reasonable price relative to its IPO price; not so high that it would encourage a flip-flop but not so low that it would cause panic,” he said. “This is great.”
