Opinion | Your SpaceX Odds Are Not in Your Favor

What would you rather own: $135 worth of lottery tickets or one share of SpaceX? “SpaceX I.P.O. likely creating the world’s first trillionaire.” Elon Musk is taking SpaceX public and at such a high share price, it means that SpaceX would have to grow revenues, well, astronomically: 50 percent every year to hit $1.1 trillion in revenue by 2035. That’s to produce a 10 percent return to shareholders, according to one analysis. That’s what someone might call a moonshot. “They’re still operating at a loss, and analysts are expecting them to only continue to spend more money in the coming years.” It’s almost like it might make sense to spend money on lottery tickets instead of SpaceX. “Hi. I want to buy some lottery tickets. So give me $110 worth of scratch-offs. All different. OK, now I want $25 split between Mega Millions and Powerball. Beautiful.” Now, the odds in any lottery are slim. “About one in 300 million.” “You have a better chance of getting struck by lightning.” Some scratch-off games have as much as one-in-12 chances of winning, but the payout is much lower. Thirty bucks down the hole. So we are 0 for scratch-offs, but we still have lotto tickets. Lottery tickets get criticized as being a tax on low-income people because they spend a greater percentage of their income on them. But for people who live paycheck to paycheck, the lottery, despite the staggering odds, may seem like the best path to wealth for them. “I would probably pay off my debts.” And maybe the lottery offers us all better odds than a SpaceX I.P.O. However, investing in SpaceX is a gamble a lot of people are going to take because they own 401(k)s. And if you have an index fund in that 401(k), you will own SpaceX, like it or not. One person is going to win, though. And we’re a loser. Elon Musk. If all his plans come true, he’ll be a trillionaire.