The Numbers
SpaceX filed confidentially with the SEC on April 1. The company initially targeted a valuation around $1.75 trillion. Bloomberg reported last week that Musk's team has pushed that number above $2 trillion.
At $2 trillion, SpaceX would trade at roughly 130 times revenue and 250 times EBITDA (a measure of operating profit). For comparison, Nvidia trades at about 30 times forward revenue. Even in the most generous reading, this is an extreme valuation.
The company plans to raise up to $75 billion from the offering. That would be more than three times the size of the biggest U.S. IPO ever. SpaceX is setting aside 30% of shares for retail (non-institutional) investors, banking on Musk's popularity to drive demand.
The xAI Factor
Much of the valuation jump comes from SpaceX's February merger with xAI, Musk's artificial intelligence company. That all-stock deal valued the combined entity at $1.25 trillion. xAI, which operates the Grok chatbot, became a wholly owned subsidiary of SpaceX.
The stated reason for the merger is building AI data centers in space. Specifics remain thin. Critics argue the deal was designed to inflate SpaceX's valuation ahead of the IPO by folding in a fast-growing AI business.
What History Tells Us
Motley Fool analysts published a piece today examining whether mega-IPOs at extreme valuations tend to reward early investors. The historical record is not encouraging for buyers at the open.
Companies that debut at sky-high multiples often struggle to grow into those valuations in the first one to two years. Early investors in the most hyped IPOs of the past decade frequently saw their shares trade below the IPO price within 12 months.
That does not mean SpaceX is doomed. Starlink alone generates real, growing revenue. But paying 130 times sales is a bet on perfection, and perfection rarely happens.
Timeline
SpaceX must release a public filing at least 15 days before its roadshow. Prediction markets give a 65% chance the IPO happens in June. Expect the public prospectus in late May, which will be the first time investors see full financials.
The Takeaway
SpaceX is a real company with real revenue. But a $2 trillion valuation at IPO would be priced far beyond what the fundamentals currently support. If you are thinking about buying at the open, know what you are paying for and what has to go right to justify that price.
