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Crazy. I didn't know you could acquire things worth 20x more than you.
by moralestapia 4mo ago
Crazy. I didn't know you could acquire things worth 20x more than you.
- brookst 4mo agoLook at GameStop’s quixotic attempt to acquire eBay. Which is actually not impossible.
- moralestapia 4mo agoDid GameStop acquire eBay?
- sspiff 4mo agoThey are trying.
- ortusdux 4mo ago5x the market cap!
- zie 4mo agoIt's an interesting way to apply for the eBay CEO job for sure.
- iamacyborg 4mo agoSomeone's been reading Money Stuff.
- zie 4mo agoIt's hilarious reading! :)
- moralestapia 4mo agoSBF admitting crimes on an interview with him as Matt was dumbfounded was an historical moment. His coverage of the downfall of FTX was hilariously good as well. Wrt. to the infamous Excel sheet, he wrote something like "when you're trying to calculate this, Excel shouldn't give you back a number, it should warn you about going to prison", lmao.
- PierceJoy 4mo agoRocket Lab's market cap is 57B and are buying Iridium for 8B. I'm assuming you're implying some other measure of worth, but it's not that crazy based on stock price.
- ericmay 4mo agoAlso folks acquire things "worth" more than them all the time. That's in part why debt exists. There are a lot of folks out there that are overly cynical and so they'll just write things like the OP from time to time which just don't make much sense or have much to do with how the real world works. What's more interesting is looking at or trying to understand strategically why Rocket Lab is making this move, especially if you are an investor.
- pnw 4mo agoRocketLab market cap is 57b. Iridium market cap was 5.5b and this transaction values it at 8b.
- sspiff 4mo agoI'm guessing they acquired it mostly exchanging stocks. Which I guess is an indication that their stock is overvalued right now if they're willing to overpay by that much.
- xgbi 4mo agoHow is Rocketlab valued 57B? They made $500M of revenue in 2025. This is 100x their entire balance sheet.
- wateralien 4mo agoThis is a good question for SpaceX too.
- saberience 4mo agoWhy was Uber valued in billions for years while making zero profit? Why was Amazon valued at billions while making zero profit? The stock market prices companies by many factors, revenue and profit are factors but so is growth. Utilities companies make lots of profits but they are valued badly because they don’t grow at all! Markets are forward looking and space is seen as a huge growth driver for the future, also RocketLab has been growing their top line revenue massively over the last few years.
- wongarsu 4mo agoUber and Amazon made zero profit, but a lot of revenue. That's very different from losing money on fairly little revenue But RocketLab did have five years of strong revenue growth. And they have a lower PS ratio than SpaceX. So at least compared to industry-rivals the valuation is justified
- pavon 4mo agoYeah, that seems grossly unrealistic. They are growing. Neutron is almost complete, and I'd expect significant growth in their launch revenue from that, and their space services are also doing well. So I could easily see their revenue increasing 5x over the next 5 years, maybe 10x. But that market cap can only be justified by the space market as a whole growing 100x, and RL maintaining a significant portion of it with strong competition from SpaceX, Blue Origin, and others.
- bitwize 4mo agoThis is one of those times you actually get to use "leverage" as a verb without sounding turbo cringe: a leveraged buyout is an acquisition with borrowed money; the hope is that you will be able to pay back the debt with the money you make off the acquired assets. Doesn't always pan out but sometimes it does.
- malfist 4mo agoDell bought EMC for 67b when they were worth 24b
- panick21_ 4mo agoThat never made sense to me, why not the other way around. Wasn't EMC the better business?
- elzbardico 4mo agoThat's this thing called credit. People do this all the time, that's how they buy their first house (or at least used to...). Your net worth is basically zero beyond what you saved for the down payment, but the bank advances you the money to buy the house because it believes your future income streams will allow you to pay the principal plus an interest.
- dylan604 4mo agobeing able to foreclose on the house/property is a pretty decent protection for the bank that doesn't exist for a business though
- elzbardico 4mo agoHigher risk, higher premium.
- kps 4mo agoRemember when NeXT acquired Apple for negative 400 million?