Elon Musk’s SpaceX is set to shatter IPO records — but experts warn regular investors should be wary
SpaceX plans a record $75 billion IPO with a $1.8 trillion valuation, despite reporting $4.9 billion in losses last year, while experts warn of overvaluation and potential risks for retail investors. Analysts like Morningstar suggest the company is overvalued and highlight uncertainties in future revenue streams such as orbital computing, while historical IPO data shows underperformance for early buyers.
Elon Musk’s SpaceX is preparing for a historic initial public offering (IPO) on the Nasdaq under the ticker SPCX, set to begin trading on Friday. The company aims to raise $75 billion at a valuation of $1.8 trillion, with shares priced around $135 each. Despite this ambitious valuation, SpaceX reported $4.9 billion in losses last year on $18.7 billion in revenue, with expectations of widening losses as Musk pursues high-cost projects like Mars colonization and AI data centers in space. Analysts at Morningstar argue SpaceX is significantly overvalued, estimating its worth at $780 billion—less than half of the IPO valuation. The firm cautions that while novel revenue streams like orbital computing are plausible, their viability and financial outcomes remain uncertain. Morningstar advises investors to wait for more attractive entry points post-IPO. Historical data from University of Florida professor Jay Ritter shows that IPO investors holding shares for three years typically underperform the broader market by about 21%. This trend raises concerns about SpaceX’s IPO, especially given warnings from investors like Michael Burry about a potential market bubble in the AI era. SpaceX has allocated 30% of its IPO shares—approximately $22.5 billion—for retail investors, far exceeding the usual 5% to 10% standard. The IPO marks a significant moment for the AI sector, as SpaceX will be the first major public listing in years, according to Wedbush analyst Dan Ives. It precedes potential IPOs from AI rivals OpenAI and Anthropic, which have filed confidential S-1 documents but have not yet announced timing or valuation details. Collectively, SpaceX, OpenAI, and Anthropic are valued at around $3.6 trillion, with SpaceX targeting $1.8 trillion in its debut.
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