Former hedge fund manager Whitney Tilson has been bearish on the SpaceX (NASDAQ:SPCX) IPO. Despite shares now trading below their IPO price, Tilson says investors should continue to stay away from the Elon-Musk led space company.

SpaceX Stock Overvalued

SpaceX stock was priced at $135 for its record-breaking IPO. Shares listed at around $150 and quickly traded higher for weeks with strong demand. Last week, the stock came back to earth, and new lows continue to be hit on Monday.

Last week amid the selloff, Tilson told investors they should continue to stay away.

"Don’t even think about bottom-fishing this one, as it still trades at 92 times trailing revenues," Tilson wrote in a daily newsletter. "That means it’s still nearly 10 times overvalued, given that I think a generous multiple for the stock would be 10 times revenues."

Tilson said he predicted many times previously that the stock was overvalued, calling SpaceX "the most overvalued large-cap stock of all time."

Tilson Critical of Analyst Price Targets

While Tilson is critical of the valuation of SpaceX stock, he says he doesn’t recommend that anyone short stocks.

In a recent email, Tilson shared the list of analyst ratings on SpaceX and their price targets. Tilson warns that investors should take the price targets with a grain of salt, given the large number of analysts who split a $500 million fee pool on the IPO and will profit from interest in shares.

Tilson said analysts from big banks and asset management companies could also benefit down the road.

"It will no doubt be seeking to use its stock to make lots of acquisitions – which means more banking and advisory fees," Tilson said.

Tilson said that with the company having quarterly losses, it could issue more debt and equity, which means more fees for bankers.

SpaceX Stock Price Action

SpaceX stock is down 1.2% to $122.52 on Monday versus a $120.10 to $225.64 trading range since going public. The new low was set earlier Monday morning.

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