The SpaceX IPO Will Set a Record. Will It Deliver Value?

SpaceX is making headlines once again. However, this time it is because of a different kind of launch. SpaceX is going public, with its Initial Public Offering, or IPO, set to launch on Friday, June 12th. The company is pricing each share at $135 and looking to generate $75 billion. The IPO is also targeting a $1.75 trillion valuation, which would make it the largest IPO in history. While the large valuation and media buzz may seem enticing to investors, much of the financial world remains skeptical of this record-breaking event. To get a better understanding of this IPO, we must look at how SpaceX is structured, the numbers backing the company, and how large IPOs have performed in the past.

SpaceX currently operates in three distinct sectors: space, connectivity, and AI. In the space sector, the company focuses on developing reusable rocket boosters to increase the efficiency of space travel. Some of their recent notable launches include Falcon 9 and Starship V3. Through their satellite network Starlink, SpaceX has established a significant position in the sector of global connectivity. Starlink allows people to access satellite internet in remote and underserved locations. Since its launch in 2019, Starlink has grown its global userbase to over 10 million people. Finally, SpaceX has also begun operations in the field of AI with its acquisition of xAI. Together, these three sectors make up SpaceX’s core business operations and serve as the primary drivers of the company’s growth and valuation. While SpaceX has done well in positioning itself in three of the fastest-growing industries in the world, its $1.75 trillion valuation is yet to be backed by actual output.

With such a large valuation, many would expect SpaceX to be producing large profits year after year. However, SpaceX operated with a revenue of $18.67 billion and a net loss of $4.94 billion in 2025. This makes the IPO’s valuation of $1.75 trillion nearly 95 times larger than its 2025 revenue. Such a large valuation accompanied by a relatively small total revenue is difficult to make sense of. One explanation for the company’s massive valuation may be a “fear of missing out”, or FOMO. SpaceX’s involvement in three of the largest up-and-coming industries can make investors fear missing out on the future potential of the company, despite its current performance. However, future potential alone may not be enough to justify a valuation of this size. To support a valuation of $1.75 trillion, SpaceX will need to translate this future potential into actual performance through continued revenue growth and increased profitability over the next decade.

Another reason why the valuation may be so high is because of Elon Musk’s previous IPO, Tesla. When Tesla went public in 2010, it began trading at $19 a share. Today, it is trading around $400 a share. The Tesla IPO turned out to be a very positive long-term investment. Because Tesla and SpaceX are both under the leadership of Elon Musk, many investors are hoping that SpaceX will follow a similar path. However, Tesla’s IPO success does not guarantee that SpaceX will follow in its footsteps. When Tesla entered the market, it was also not yet profitable. Its valuation was about 15x revenue, and it still trades at about 15x revenue today. This is a relatively high multiple, justified by the tech-heavy growth potential of the company, but it is nowhere near the 95x revenue multiple priced into the SpaceX IPO.

The performance of large IPOs has been mixed over the past 20 years. While some IPOs, such as Meta and Visa, have been able to live up to their high valuations, many have failed to generate meaningful returns relative to their valuation in the long run. These performances suggest that bigger does not always mean better when it comes to IPOs.

Large valuations demand equally large business performances. Whether SpaceX can provide the performance needed to back its valuation is difficult to say.