Some business news will stop you in the middle of scrolling. That’s exactly what Monday’s selloff in SpaceX was. Elon Musk’s estimated paper wealth dropped by about $150 billion in just one trading session. That’s a number big enough to beat Warren Buffett’s total net worth, and Buffett spent sixty years building one of the best investment records in history. By almost any measure, that’s a huge number. Still, Peter Schiff‘s answer was basically, “Calm down, he’s fine.”
Schiff is an economist and co-founder of Echelon Wealth Partners. He often talks about Musk’s wealth in blunt, and sometimes uncomfortable, ways. Schiff wrote on X that SPCX fell 16.5% during the session. He talked about how big the loss was and then said something so clear that it almost seemed dismissive: Musk is still the only trillionaire in the world. Schiff wrote, “Don’t feel bad for him.” It was the kind of line that speaks for itself because it’s true.
It’s worth thinking about what Schiff also said. He said that SpaceX shares had hit an all-time low of $108.66 on Monday, which was about 18.5% below their IPO price of $135 and more than 50% below their post-listing high point of about $225. “This is an example of why it’s so dangerous to rush into buying a heavily hyped IPO during its first few days of trading,” he wrote. This line seems so clear now that I look back on it. It does that almost all the time.
In June, SpaceX had the biggest IPO ever. The excitement was real, and it didn’t just happen in traditional markets. It also spread to crypto platforms, like Bybit, Bitget Wallet, and Binance Wallet, where tokenized versions of SPCX shares were in high demand, fetching over a billion dollars. All three eventually ended their campaigns on the day they were supposed to go live and gave refunds because demand was higher than supply. For investors who are new to crypto who watched Monday’s drop from the sidelines, not being able to get into the IPO may have felt like a narrow escape.
It’s not the first time Schiff has used Musk’s money to make a bigger point. After the IPO, he compared Musk to John D. Rockefeller, saying that Musk was now the richest private citizen in history by that measure. But he added that Rockefeller’s wealth was based on real income, like about $2 billion a year in inflation-adjusted terms, which he earned and not just held as cash. Musk does not get paid by the companies he runs. This difference doesn’t make him poorer, but it does make us think about how long-lastingly we measure wealth in a time of paper empires.
Since then, investors have had different thoughts. Gary Black of The Future Fund made it clear that the only people who were surprised by the drop in value were those who had never thought SpaceX was worth that much. Ross Gerber went in the opposite direction. He reaffirmed his faith in the company and used Tesla’s early volatility as an example that people should remember. It’s still not clear which book will hold up better over time. SpaceX is really doing amazing things. The Starship program is unlike anything that has ever been tried before. However, impressive and reasonably priced are not the same thing. On Monday, the markets spent a lot of time reminding investors of this difference.
CNBC says that SpaceX’s market value has dropped about $1.2 trillion since its high point. To give you an idea of how big that number is, Tesla’s market value is currently around $1.22 trillion. To put it another way, SpaceX took away the same amount of value as Tesla in just a few weeks, not years.
Schiff has said the same thing over and over again, and it’s nice of him to say it: the math on overhyped IPOs rarely works out for the people who jump in first. The very rich person at the center of it all will be okay. People who bought in for more than $200 may need more time.