The SpaceX IPO share price has been set at $135 per share, valuing the company at $1.77 trillion, according to CNBC, as trading in the company’s shares is set to begin on 12 June. What makes this offering unusual is not just the scale of the valuation: SpaceX has reportedly earmarked 30% of the offering for retail investors, three times the typical allocation for a mega-cap initial public offering (IPO), according to BitMEX.
That allocation matters. UK retail investors are likely to be allocated around £1.5bn worth of shares, and the SpaceX IPO share price will determine whether a new generation of individual investors gets exposure to one of the most discussed companies in the world. Simon Belsham, Chief Client Officer at Hargreaves Lansdown, said: ‘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.’
A Valuation That Dwarfs the Rockets
At $1.77 trillion, SpaceX would rank as the seventh-biggest company in the United States, above Tesla, which carries a market capitalisation of around $1.6 trillion, CNBC reports. That places it comfortably inside the global top ten most valuable companies, a position made all the more arresting given SpaceX lost nearly $5bn last year.
The bankers marketing the offering are Goldman Sachs, as lead, followed by Morgan Stanley, Bank of America, Citigroup and JPMorgan Chase, according to CNBC. The lineup represents the core of Wall Street’s fee-generating engine, and their presence signals the seriousness with which institutional markets are treating the deal, even as questions about the underlying business model remain open.
SpaceX’s own prospectus puts its total addressable market at $28.5 trillion. Of that, $26.5 trillion is attributed to artificial intelligence (AI), with space and communications accounting for less than 10% of the total. That is the central tension in any assessment of the offering: the brand was built on two decades of rocketry, but the valuation rests almost entirely on AI.
SpaceX IPO Share Price Reflects an AI Bet, Not Just a Rocket Programme
Sinead O’Sullivan, an economist who has worked for NASA, is direct about the mismatch. ‘If we look at the business itself, it’s really unclear as to what business or industry SpaceX is even in,’ she says. ‘The logo, the brand is built on two decades of rocketry but most of the capital expenditure is actually on data centres and an AI company that seems to be more about social media than anything to do with space.’ Her conclusion: ‘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.’
Bundled into SpaceX is Musk’s AI company xAI, alongside plans for data centres in space providing computing power cooled by the chill of the vacuum and powered by solar energy, as well as crewed bases on the Moon and eventually Mars. The prospectus acknowledges that delivering on any of this requires ‘building, commercialising and operating products and services at a scale that has not been previously achieved’.
Musk is listed as founder, chief executive, chief technical officer and chairman of the board. He owns 42% of the company, but his shares carry extra voting rights, giving him effective control of 85% of the business. Financial journalist Robert Armstrong asks what that means in practice: ‘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?’ Armstrong has argued investors should get a discount for forfeiting control; the $135 price point suggests the market disagrees.
Even for those who never apply to buy shares directly, pension savings invested in index funds will likely bring SpaceX into millions of portfolios automatically once it joins the major indices. SpaceX is selling only 5% of total shares, worth roughly $75bn, in this first tranche. Since 2020, the company’s estimated value has risen from $40bn to $1.77 trillion, a more than 40-fold increase, and the prospectus’s AI ambitions suggest that story is designed to continue long after 12 June.
