SpaceX Set to Launch Largest IPO in History

SpaceX, the brainchild of tech entrepreneur Elon Musk, is gearing up for the largest initial public offering (IPO) on record. The company is looking to raise $75 billion by selling 555.6 million shares at $135 each, valuing SpaceX at an impressive $1.77 trillion. This would make SpaceX the seventh most valuable U.S. company, surpassing even Musk’s own electric vehicle giant, Tesla.

Investors will have their first opportunity to buy into SpaceX when it makes its Nasdaq debut on Friday. However, investing in SpaceX at this price is largely a bet on Musk himself, as the company is currently burning through cash and has lower revenue compared to its trillion-dollar peers.

According to SpaceX’s prospectus, the company saw a 15% increase in revenue to $4.69 billion in the first quarter of this year, up from $4.07 billion the previous year. In 2021, SpaceX’s revenue soared by 33% to $18.67 billion. Despite these revenue gains, the company reported a net loss of $4.28 billion in the latest quarter.

Aside from its space ventures, SpaceX also operates the profitable Starlink satellite internet service and its artificial intelligence division xAI, which merged with SpaceX earlier this year. The company’s IPO filing revealed that it spent $10.1 billion in capital expenditures in the first quarter, with the majority of the costs allocated to AI development.

Since its inception in 2002, SpaceX has accumulated a deficit of approximately $41.3 billion. The company cautioned potential investors that it may not achieve profitability in the foreseeable future.

Goldman Sachs is leading the IPO, with support from Morgan Stanley, Bank of America, Citigroup, and JPMorgan Chase. Musk, who holds an 82% voting power in SpaceX, stands to become the world’s first trillionaire with his stake in the company.

Analysts from Oppenheimer and New Street Research initiated coverage of SpaceX, with price targets of $190 and $165 respectively. They highlighted the company’s diverse portfolio and strong potential in the AI sector.

While SpaceX’s IPO is poised to be the largest in U.S. history, future IPOs from companies like Anthropic and OpenAI, valued at close to $1 trillion, could pose a challenge. These companies have also filed for IPOs and are expected to go public in the near future.

As the space economy continues to evolve, SpaceX’s IPO serves as a testament to the growing significance of the industry.