Trading begins Friday in SpaceX’s initial public offering, the largest stock sale of its kind in history, in a milestone that is expected to make founder Elon Musk the world’s first trillionaire and open one of the most closely held private companies to ordinary investors for the first time.
The $1.75 trillion valuation represents more than a 40-fold increase from the company’s estimated $40 billion value in 2020, according to the BBC. Banks selling the shares set the target price at $1.75 trillion, placing SpaceX among the ten most valuable companies on Earth.
MSI previously reported that SpaceX had set its IPO share price at $135 per share, with the company filing for a public offering of roughly 5% of its equity.
Musk, the company’s founder, chief executive, chief technical officer and chairman of the board, is worth over $700 billion according to estimates cited by the BBC. The IPO is expected to push his personal fortune past $1 trillion, making him the first person to reach that threshold.
UK retail investors are expected to be allocated around £1.5 billion ($1.9 billion) worth of shares, according to the BBC. Simon Belsham, chief client officer at Hargreaves Lansdown, said in a statement: “While we recognise this IPO might not be right for everyone, it’s an exciting moment for many of our clients. We’re expecting this might be a first foray into investing for many.”
The company lost nearly $5 billion last year, according to financial filings cited in the BBC report. The profitability of its Starlink communications network — which has played a role in Ukraine’s defense against the Russian invasion and won multibillion-dollar contracts from the U.S. Space Force — accounts for less than 20% of the $1.75 trillion target valuation, according to analyst estimates cited by the BBC.
The vast majority of SpaceX’s valuation depends on investor confidence in Musk’s artificial intelligence ventures. SpaceX’s prospectus identifies a total addressable market of $28.5 trillion, of which $26.5 trillion is attributed to AI services, according to the BBC. The company says that market includes data centers in space powered by solar energy and cooled by the vacuum of space, alongside human-crewed bases on the Moon and Mars.
Sinead O’Sullivan, an economist who has worked for NASA, expressed skepticism about the valuation. “If we look at the business itself, it’s really unclear as to what business or industry SpaceX is even in,” she told the BBC. “All of these are just in a kind of conglomerated business under Elon Musk’s name.” She added: “When we look at the massive share price that they are trying to get here, you’re buying a share of the Elon Musk brand more than any kind of space industry.”
The prospectus itself acknowledges that SpaceX “requires building, commercialising and operating products and services … at a scale that has not been previously achieved,” according to the BBC.
Musk’s control over the company has also drawn scrutiny. Despite owning 42% of the company, his shares carry extra voting rights giving him effective control of 85% of shareholder votes, according to the BBC.
Financial journalist Robert Armstrong, quoted by the BBC, questioned the nature of public ownership under such an arrangement: “What is holding shares in a company? It’s ownership — but what kind of ownership is this? Do you really own something you can’t control?”
One large institutional investor told the BBC: “The cult of Elon Musk requires disciples to pay a premium for the questionable privilege of having no real say in how the company they own is run. But people seem happy to do that.”
Musk has used his wealth and control in ways the BBC described as controversial: spending nearly $300 million on Donald Trump’s second presidential campaign, securing billions in U.S. government contracts, and supporting right-wing political figures in the UK and elsewhere.
O’Sullivan characterized the IPO as “an Elon Musk ego project,” according to the BBC.
One large investor quoted by the BBC compared Musk to the 19th-century showman P.T. Barnum rather than to industrialists like John D. Rockefeller or Warren Buffett, citing Musk’s ability to pivot from stalled car production at Tesla to promises of one billion humanoid robots.
SpaceX is initially offering only 5% of the company — about $75 billion in shares — selling a sliver of the total equity to test public demand. The BBC reported that AI competitors Anthropic and OpenAI are expected to conduct similar partial public offerings in the coming months. The combined flow of new shares from these offerings could total trillions of dollars, raising concerns about a supply glut reminiscent of the dot-com bust, though the BBC noted that index funds that automatically buy shares in stocks entering market indices may absorb some of the supply.