Elon Musk's reusable rocket company, Space Exploration Technologies (SPCX), has officially launched the largest initial public offering ever, aiming to raise $75 billion by selling 555.6 million shares at $135 each, according to a filing with the U.S. Securities and Exchange Commission. This transaction values the company at $1.77 trillion, making it the seventh most valuable company in the U.S., surpassing Musk's electric vehicle maker, Tesla.
The company is set to begin trading on the Nasdaq on Friday, marking the first opportunity for the public to invest in the 24-year-old firm. Betting on SpaceX at this price is largely a bet on Musk himself, as the company is burning through cash and its revenue is significantly smaller than any of its trillion-dollar-valued peers.
Traders on prediction markets assign a very high probability to SpaceX's market capitalization exceeding its $1.77 trillion valuation on its first trading day. According to forecasts on Polymarket, there is an 84% chance the company's market cap will close above $1.8 trillion on day one, and a 69% chance it surpasses $2 trillion.
Starting from a $1.77 trillion valuation, reaching a $2 trillion market cap would imply a first-day stock price gain of approximately 13%. Pre-IPO perpetual futures contracts on the Hyperliquid platform suggest the stock could surge more than 20% on its debut.
Retail investor demand for SpaceX's U.S. IPO is reported to have exceeded $100 billion, surpassing the company's $75 billion fundraising target. SpaceX will allocate at least 20% of the IPO shares to retail investors and less than 10% to international orders. Approximately 400 employee shareholders are expected to see their stakes reach a value of $100 million.
The IPO has attracted an order of at least $5 billion from BlackRock, with other large asset managers submitting orders of a similar scale. Bloomberg reported that the offering has generated demand exceeding four times the number of shares available.
In its prospectus, SpaceX stated that first-quarter revenue grew 15% year-over-year to $4.69 billion, up from $4.07 billion a year earlier. For the full year, revenue increased 33% to $18.67 billion. The company recorded a net loss of $4.28 billion in the most recent quarter, following a full-year loss of $4.94 billion.
Beyond its space business, Musk's company also owns the Starlink satellite internet service—which constitutes the majority of its revenue and is its only profitable division—and the artificial intelligence unit xAI, which merged with SpaceX this past February.
SpaceX disclosed in its IPO filing that capital expenditures reached $10.1 billion in the first quarter, more than double the year-ago period. The vast majority of these costs—$7.7 billion—were directed toward artificial intelligence, with the remainder spent on space and connectivity businesses.
Since its founding in 2002, the company has accumulated approximately $41.3 billion in losses. The prospectus cautions investors that it may not achieve profitability in the future.
Last week, SpaceX set a fixed price of $135 per share, removing some uncertainty from the IPO process. While new issuers typically provide a price range to gauge demand sensitivity, SpaceX opted for a "take-it-or-leave-it" pricing approach after holding a series of exploratory meetings before launching its roadshow.
Goldman Sachs is the lead underwriter for the offering, followed by Morgan Stanley, Bank of America, Citigroup, and JPMorgan Chase.
This IPO could position Musk to become the world's first trillionaire. His stake in SpaceX is valued at $866.5 billion, and combined with his roughly $320 billion stake in Tesla (excluding some options), his total wealth approaches this historic milestone. For the 54-year-old Musk, the SpaceX listing comes 16 years after he took Tesla public.
Musk controls over 82% of the voting power at SpaceX, giving him near-total control over the board.
Two Wall Street investment banks initiated coverage of SpaceX on Thursday. Oppenheimer issued an "Outperform" rating with a 12- to 18-month price target of $190, implying a 40% upside from the IPO price. Analyst Timothy Horan wrote that the company's diversified business portfolio makes it attractive to investors.
He stated, "We believe SPCX is positioned to leverage its ground computing expertise as a bridge (and a potential fallback), enabling key scale and cost advantages." Horan described it as "the only vertically integrated AI company with the required capital, data, large language models, hardware, manufacturing, and engineering talent," adding that "its space infrastructure appears structurally advantaged."
Meanwhile, New Street Research set a price target of $165 and stated it values the xAI business at $575 billion.
Although SpaceX's IPO is roughly three times the size of the largest U.S. IPO in history, it may face challenges from later entrants. Less than four years after the generative AI boom began, Anthropic and OpenAI—both privately valued by investors at nearly $1 trillion—have confidentially filed for public listings. These deals could be completed within the year.
The flood of IPOs, combined with Alphabet's $85 billion equity offering and the potential for other large tech companies to follow suit, has sparked discussions about whether there is sufficient investor demand to meet the supply.
Wall Street's Preparations for the Launch
Every segment of Wall Street is operating in a state of high-intensity preparation. Exchanges, market makers, and brokerages are conducting ongoing system checks and capacity expansions to ensure this unprecedented IPO does not descend into disorder due to technical issues.
Numerous institutions began drills weeks in advance. Three sources familiar with the matter revealed that major market makers like Citadel Securities and Jane Street have repeatedly conducted simulations and stress tests, including multiple weekend IPO simulation exercises with clients over the past month.
S&P Global has also subjected its allocation system to intensive testing. The company is responsible for allocating shares to institutional investors and coordinating order processing with the underwriting syndicate. Darren Thomas, head of corporate solutions, stated the firm has used AI to optimize code and expand infrastructure, noting, "We did need to scale the infrastructure to handle larger volumes. We have never seen a deal of this size."
Meanwhile, Morgan Stanley, acting as the bookrunner and stabilization agent for this IPO, will be responsible for determining the opening price and maintaining orderly trading, though the bank has not commented on the arrangements.
The market's heightened vigilance stems in large part from the severe technical glitches during Facebook's 2012 IPO. That episode saw trading system chaos persist for hours, with order execution statuses unconfirmed, leading to hundreds of millions in losses for market makers. Nasdaq later paid nearly $42 million in compensation and was fined $10 million by the SEC.
In the same year, BATS Global Markets was forced to cancel its own platform's IPO due to technical issues. These events remain cautionary tales within the industry.
To mitigate potential risks, Nasdaq has conducted comprehensive upgrades to its core systems, including improvements to its IPO tool Bookviewer and configuring backup trading platforms for emergencies. Similar testing was conducted before Arm Holdings' 2023 listing.
Market makers have also bolstered their preparations. Sources indicate that high-frequency trading firms, including Citadel Securities and Jane Street, have tested their internal systems over multiple rounds to handle the potential influx of massive orders.
Through continuous stress testing over the past six weeks, S&P Global has increased its system processing capacity by approximately 200% while reducing response times. The company noted that this level of preparation is uncommon for previous large IPOs, but SpaceX's scale makes it an exception.
A unique aspect of this offering is the significantly higher proportion of shares allocated to retail investors. One source close to the transaction stated, "No one has ever tried an IPO of this size, and no one has ever tried to allocate this much stock to retail." The source added this could lead to a "messy and volatile aftermarket."
In a standard IPO process, the exchange aggregates buy and sell orders before the opening, with investors continuously adjusting their bids based on market feedback. Underwriters monitor order flow to determine the supply-demand balance and decide on the opening time to mitigate the risk of severe volatility.
Even so, first-day trading remains uncertain. The Facebook case was precisely due to order processing failures, causing a backlog of instructions and execution delays that triggered market chaos.
The current market environment adds another variable. With some investors concerned about overheating in the AI-driven rally and large tech stocks experiencing significant pullbacks, market sentiment is particularly sensitive.
Peter Tuz, president of Chase Investment Counsel, noted, "This is a historic event. For the market's sake, I hope it trades well subsequently. If a stock like this performs poorly after listing, it would not only cast a shadow over the entire market but also affect other IPOs queued up for the rest of the summer."
Jed Ellerbroek, a portfolio manager at Argent Capital Management, said, "Every investment management firm in the country is talking about and considering SpaceX. We all know trading on Friday is going to be absolutely wild."
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