Prominent short seller Jim Chanos has expressed doubts about the highly anticipated initial public offering (IPO) of SpaceX, warning that the Elon Musk-led space company’s offering is fueled by ‘hopes and dreams’ that do not justify its astronomical valuations.

Valuation Concerns

SpaceX is set to go public in New York, seeking to raise $75 billion at a valuation of $1.75 trillion, which would make it the largest initial public offering, dwarfing the 2019 Saudi Aramco listing by nearly threefold. Chanos stated that the company is not worth $1.75 trillion based on any reasonable assumptions over the next five years.

Chanos also voiced concerns about the governance of the company, which has led some analysts to view it as a logical short. However, several short sellers are wary of betting against SpaceX, adopting a wait-and-watch stance, especially after a recent rally in trillion-dollar technology heavyweights.

Data Center Sector

Chanos also cast doubt on the economics of the data center sector, calling it a ‘bad business’ with low-single-digit returns on capital. He argued that traditional operators and emerging neocloud firms resemble real estate investment trusts (REITs) or equipment leasing companies rather than high-growth technology plays.

Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.