On June 12th, SpaceX went public. On that day, the closing market value reached $2.1 trillion. Musk's personal net worth has directly surpassed one trillion US dollars, the first time in human history.

On the same day, Nobel laureate Paul Krugman wrote an article in his column, with the title being blunt and referring directly to Musk as the "Human Ponzi Scheme".

One claims to be a god, while the other claims to be a fraud.

What do you think?

Welcome to leave comments and discuss in the comment section.

01. What did the Nobel laureate say?

Let's start with Krugman's criticism. He's not actually cursing blindly.

He drew a scene and said that he was taking the Hyperloop super high-speed railway when he went out, walking through the underground tunnel of a boring company, and calling a Tesla Robotaxi. The problem is that these things either have no impact or have not been commercialized at all. Over the years, less than 20% of Musk's impressive achievements have been completed on time, and more than one-third are basically unfinished.

Then he spoke with the data. SpaceX had a revenue of $18.7 billion last year and lost $4.9 billion. We lost over 4 billion yuan in the first quarter of this year. Since its establishment, it has accumulated a loss of 41.3 billion US dollars. Apple earns over 100 billion yuan annually, with a market value of just over 3 trillion yuan. SpaceX has a revenue of over 10 billion yuan, but still suffers huge losses, with a market value of 2.1 trillion yuan. The market sales rate is over 100 times higher. According to traditional valuation, this is indeed outrageous.

Krugman's logic is actually not complicated. A company looks very successful because there are people constantly investing money, and the reason why there are people constantly investing money is because it looks very successful. Isn't this the taste of Ponzi scheme. He believes that Musk's greatest strength is not building rockets, but playing financial magic, relying on "genius designs" to make money and support valuations.

Why would anyone be willing to pay?

But the other party doesn't see it that way at all.

The investors on Wall Street are not fools. A $75 billion IPO, with real money pouring in. What are they looking for?

You see, SpaceX has tangible things flying in the sky. Starlink had a revenue of 11.3 billion US dollars and a profit of 4.4 billion US dollars last year, making it a profitable business. More than 10 million users and over 9000 satellites in orbit, this is not a PPT. Rocket recovery technology has indeed been developed, and the cost has indeed been reduced.

Looking at it again, they linked these three businesses together. Rockets are transportation, Starlink is communication, plus space AI computing power. This is equivalent to repairing the infrastructure of space. Some investment banks have calculated that the potential market for space AI alone is 28 trillion yuan.

Another thing is that although Musk has a big mouth, he has indeed accomplished several seemingly impossible things. In 2002, he spent all the money from selling PayPal on rockets and electric cars, and everyone thought he was crazy. The rocket exploded several times, and the company almost died. As a result, he successfully recovered the rocket and Tesla also succeeded. Investors are betting that he can do it again.

03. Scammers or geniuses? Not that simple

Ultimately, this matter is not as simple as a "scam" against a "genius".

Is Krugman right? From a financial perspective, yes. SpaceX is indeed suffering huge losses, and Musk has too many unfulfilled promises. This valuation is outrageously high by any traditional metric.

But the prices offered by the market are also true. 2.1 trillion US dollars, that's money piled up. The first two groups of people here are not even talking on the same channel. One group is looking at the current profit and loss statement, while the other group is looking at the future space economy.

There is one more thing that may have been overlooked. Americans have a obsession with space, starting from the Apollo moon landing and generations venturing into it. Musk himself was driven by this belief. Some people dare to bet their entire fortune, while others dare to follow.

So, this is more like a story about 'what to believe'. Musk has indeed turned many impossibilities into possibilities, but there are also a bunch of unfilled pits. In SpaceX's market value, there are rewards for real achievements and early overdrafts for the future.

Krugman is afraid that if one day this overdraft collapses, it will be very tragic. And those who invested money believe that Musk will turn things around like he did a few times before, when he is about to die.

Who is right and who is wrong? I don't know

But there is a question you can ask yourself: "Do you have anything you believe in so much that you are willing to bet your entire fortune on it? And, even though you know you will stumble in the middle, do you still dare to continue doing it

The answer to this question may be more worth pondering than determining whether Musk is a fraud.

*The image is from the internet and has been hacked and deleted