Jim Cramer says SpaceX could be a long-term holding for future generations
Jim Cramer framed SpaceX as a decades-long bet while warning that a lockup expiration could pressure shares in the near term.
By Theo Nakamura · Staff Writer
· 3 min read
Jim Cramer says SpaceX could be a stock investors consider setting aside for their children or grandchildren, but he paired that long-term view with a clear warning about short-term volatility. The CNBC host said Wednesday that the company should be judged over decades, not by the next few quarterly reports.
“SpaceX could be a 100-year piece of paper,” Cramer said on CNBC’s Mad Money coverage. He said investors could potentially put away shares for the next generation or the one after that.
That is Cramer’s opinion, not a prediction about the stock’s return. He said any major payoff could take years or decades, and that he did not know when SpaceX might become a major winner.
Why does Cramer see SpaceX as a long-term investment?
Cramer’s case rests largely on Elon Musk’s record of building companies and attracting capital for ambitious projects. According to CNBC, Cramer said SpaceX will need substantial funding to pursue its plans, but he believes Musk can raise it.
He identified three potential long-run drivers: Starship, the company’s reusable rocket program; Starlink, its satellite-internet business; and its computing operations. CNBC reported that SpaceX has compute-rental agreements with Anthropic and Alphabet’s Google, though Cramer has previously said the durability of that revenue is hard to assess because either side can cancel those agreements with 90 days’ notice.
For investors, the distinction is between the business thesis and the stock’s path. A company can have projects with far-off potential while its shares still move sharply on earnings, spending plans or changes in how many shares are available for trading.
Why did Cramer urge patience on SpaceX shares?
SpaceX shares fell 13.6% Wednesday after the company’s first earnings report since its June initial public offering, CNBC reported. Quarterly revenue exceeded expectations, but the company also disclosed sharply higher capital expenditures, the money it spends on long-lived assets and expansion.
Cramer also flagged an imminent lockup expiration. A lockup is a period after an IPO during which certain early investors and insiders cannot sell their shares. When it ends, those shares can enter the market, potentially increasing supply.
Roughly 911 million previously restricted SpaceX shares were scheduled to become eligible for trading Thursday, according to CNBC. That concern was consistent with Cramer’s July 28 comments, when he advised investors who wanted to buy SpaceX not to commit heavily before the first lockup expiration. CNBC reported then that about 911.5 million shares would become eligible, more than doubling the public float, or shares available for public trading.
Cramer’s latest comments therefore describe a very long holding period, while acknowledging that the nearer-term share price could remain unsettled. His reasoning depends on execution in businesses that may take a long time to mature, rather than a claim that results will arrive on a fixed schedule.
This story draws on original reporting from CNBC.
