Debt Versus Equity: SPCX Bucks The Trend
Three weeks ago, we wrote A Supply Tsunami Is Coming. The article discussed why the world's largest technology companies are choosing equity versus debt to fund their AI infrastructure buildouts. Simply, at 5% interest rates, issuing stock carries no interest expense, no refinancing risk, and no margin pressure. Alphabet raised $80 billion in equity. Meta and Amazon are planning similarly large offerings. SpaceX (SPCX), which just conducted its record-sized IPO, just did the opposite. Late last week, SPCX fell more than 10% after announcing plans to issue debt to finance its AI development…
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