SpaceX will become publicly traded on Friday after nearly two and a half decades as a private company. Executives are slated to ring the bell on Wall Street with the rocket ship maker’s historic stock market debut. If all goes to plan, the company’s initial public offering (IPO) will mint a valuation of $1.77tn – earning it the designation of the world’s largest ever IPO.
Elon Musk, the founder and CEO of SpaceX, has a large stake in the company as majority shareholder, so if investors’ enthusiasm validates the eye-popping valuation, he would take the title of the world’s first-ever trillionaire. Musk is also the CEO of Tesla, which is valued at $1.2tn.
SpaceX’s IPO comes in what is predicted to be a banner year for public offerings of artificial intelligence companies, a group the rocket maker is part of as the acquirer of Musk’s startup, xAI. Rivals OpenAI and Anthropic have also filed to go public sometime this year and are predicted to raise record sums nearing $1tn, which would orient the US stock market heavily towards AI companies.
Musk has said that the reason SpaceX is seeking to go public, raising enormous sums of money, is to be able to obtain the capital necessary to further explore space and create human colonies on other planets.
“Our mission is to build the systems and technologies necessary to make life multiplanetary, to understand the true nature of the universe, and to extend the light of consciousness to the stars,” SpaceX said in its investor prospectus.
SpaceX is a conglomeration of several of Musk’s businesses, including the satellite maker and internet service provider Starlink, xAI, social media platform X and the SpaceX rocket business.
While expansive, the company is not profitable. Last year, SpaceX pulled in a revenue of $18.7bn, while recording an operating loss of $4.3bn. For comparison, social media company Meta generated revenue of more than $200bn last year with a net income upwards of $60bn.
An untypical IPO
SpaceX’s highly anticipated IPO comes with an unusual set of terms. The company has offered an accept-it-or-leave-it share price of $135 instead of providing the customary range of prices to investors. So, buy-in has largely been based on investor enthusiasm on that set price, rather than demand based on an array of prices. SpaceX reportedly stopped taking orders on Wednesday.
Earlier this week, reports from various news outlets indicated that investor demand was up to four times oversubscribed, meaning that the $75bn SpaceX was seeking to raise with its IPO could jump to $250bn in investment. This drew the ire of the Massachusetts senator Elizabeth Warren, who called on the Securities and Exchange Commission (SEC) to delay the company’s IPO over potentially “inaccurate or misleading accounting or valuation”.
SpaceX’s IPO has market watchers on high alert. Along with the lack of profitability, some analysts say such a big valuation for a company that’s burning cash on its AI buildout – xAI is spending big on datacenters – and is predominantly governed by one person – Musk, who commands roughly 85% of SpaceX’s voting shares – potentially makes for a volatile asset.
The company’s debut on Wall Street could also bolster its grip on the financial system. Its shares will reportedly be distributed into index funds shortly after its IPO, far quicker than most companies going public, though notably not into the S&P 500. Those funds hold people’s retirement savings and pension plans, meaning individual investors could be unwittingly exposed to financial risk if SpaceX’s share price plummets.
For SpaceX employees, however, the record-shattering valuation means they are about to get a lot richer. More than 4,400 current and former employees are expected to become millionaires with the IPO, according to the New York Times, with 400 of them each securing $100m or more.
Gabriel Zucman, a French economist who studies extreme wealth, said the consolidated capital brought on by the SpaceX, OpenAI and Anthropic IPOs could have profound effects on the economy and society – the like of which hasn’t been seen since the last century.
“There is a fundamental tension in democratic societies between extreme wealth … and the very possibility of a well-functioning democracy,” Zucman said. “After World War II, it looked like extreme wealth belonged to the past,” but now, he said, “the AI boom is minting billionaires by the day” and the first trillionaires are coming into view.
