I’m a long-term investor who doesn’t hold an investment in Tesla, which I believe is a car company. I may be conservative, but I don‘t want to lose money unnecessarily, and that’s why I thought that looking over at SpaceX’s IPO can be an interesting way to test my view of them.The only segment generating income is their Starlink infrastructure – from the perspective of a long-term investor who wants the company to have a favourable position, I don’t like that – the whole company is losing money.I do like some quotes, though:We do not want humans to have the same fate as dinosaurs.I agree with the view that human civilisation should evolve and be smarter; however, what I do think should be stopped is the expansion of AI – it’s a vicious cycle: more content is created by AI, then the AI learns on that content, and essentially it turns into a hallucinating monster which needs more and more energy, which we as humans can’t give. From what I’m reading in their S-1, it seems that they want to take advantage of Tesla’s and Intel’s Terafab to create chips on demand when SpaceX would have a shortage (which can happen).The most important thing from the S-1 filing is how they operate:Leverage our unparalleled launch capabilities to enable massive scale;Identify and create new trillion-dollar market opportunities;Design a solution with world-class engineering and first-principles thinking;Apply “The Algorithm” (make less dumb, delete, optimize, accelerate, automate);Vertically integrate all the way to the end customer;Continuously drive cost down and throughput up; andGenerate significant cash flow and reinvest in the future.This seems like a good example for the existing companies.I see their Starlink has achieved 1, 2, 3, 6 and 7, but now what about their rockets? They need to generate significant cash flow.While they are successful in driving costs down, the second aspect is whether there will be demand to fulfil this. While I know that humans need to expand beyond Earth to exist, I find it hard to believe they can generate cash flow as a whole if they make bold promises like this:We Believe Orbital AI Can Accelerate Time to Power and Reduce Token Costs. The Sun contains approximately 99.8% of the solar system’s energy and offers what we believe is the only truly scalable solution to the challenge of accelerating demand for compute relative to terrestrial energy constraints. The logical path forward is to move power-intensive AI workloads into orbit, where solar energy is near-constant and uninterrupted. With such accessibility to energy, we believe that our launch business will enable us to consistently activate the highest-performing hardware before our competitors without such access, shrinking the timeline to useful tokens on bleeding-edge hardware and sustaining our token cost advantage. We believe SpaceX is uniquely positioned to deploy and operate data centres in orbit that can eventually achieve a lower cost than terrestrial data centres over time due to our extreme vertically integrated approach across launch, satellite manufacturing at scale, network connectivity, and terrestrial data centre expertise.I‘m not in any way against this company – but this begs the question: when will investors expect to get their money back? If they reinvest almost everything, can that really result in profitable growth? Because if we compare that to how Berkshire Hathaway or Amazon works, it’s that they also try to reinvent everything – and that’s very good – the thing is, growth from them comes from scale. While SpaceX is saying that their rockets are reusable, I would need to know the breakeven point and how many years it would likely take to reach it.Orbital AI compute is a mistake in my view – just because you have lots of sun in the atmosphere doesn’t mean that putting AI into space is a good idea – with all the satellites you have there, I would be worried that other satellites would crash it or that such valuable resources could be taken over by a foreign country and be used as a target for warfare – but wait – don’t we have that on Earth? On the other hand, this would require humans on Earth to have high-speed connectivity. But there’s another issue here – what if all of this satellite junk that gets left out there creates a trap for us we can’t escape – what then? because these objects are zipping by very fast.Orbital AI is a high cost that might take years to see a return – but if we even see AI demand, for now, I think that AI growth should be halted. Too much AI content on the internet means that the AI is becoming stupider – but that gets us to the game theory – if we all agree to stop evolving AI, then for anyone it could be beneficial to start expansion again – because they would have an advantage over others. So if AI is becoming stupider, then it’s more beneficial for us to halt new AI models and just make humanity catch up to it – in a way that makes humans analyse data as well – so that the internet isn’t dead.We as humans are lazy, and because of that, I see AI as an ally, yet also a threat in some scenarios – people are worried about AI taking their jobs, yet they are the ones becoming overly reliant on it – they are using AI to think, instead of doing it themselves.Ok, I got carried away – but here is what SpaceX is trying to be in my view – a vertically integrated company that makes humans explore space. I like that, but if cash flow isn’t generated, it’s all empty promises.Future Markets – as said in their report:• Point-to-point terrestrial travel (Nasa likes this)• Space tourism (I would be scared)•In-orbit manufacturing (A strange idea – why not on the moon?) - The atmosphere can be very crowded.•Passenger and cargo transport to the Moon and Mars (9 I agree wioth this)• Energy production on the Moon and Mars (We need Fusion Reactors for helium-3 on the Moon)• Manufacturing capabilities on the Moon and Mars (For the future human colony)• Asteroid mining (Gold prices will suffer, but yes, I agree – crucial for more ASML machines)As I look further on, I see this table, and it surprises me a lot:They had some positive net income in some years – which means they have the option, probably, of investing, so maybe they are barely passing by, but they are?But look how fast their CapEx is growing compared to revenue: CapEx growth Y/Y:2024 to 2025: 85%2023 to 2024: 152%Revenue growth Y/Y:2024 to 2025: 33.24%2023 to 2024: 34.92%That’s not a sustainable trend – revenue growth needs to exceed CapEx growth in order to fund expansion, or else management might need to take on debt or dilute shareholders to continue doing this growth.After that much review, I have all the conclusions: this IPO is not for me.If you become a Founding Member of the NabzdykRatings Software today (€9/mo - 30 day free trial), I will manually grant you Premium Access to this Substack for free.Become a founding memberThis isn’t financial advice.