The number that matters is not the headline price SpaceX put on its stock. It is what that price implies: a valuation of about $1.77 trillion for a rocket company that has never turned an annual profit, CNBC reported.
SpaceX went public on the Nasdaq on June 12 under the ticker SPCX, selling 555.6 million shares at $135 each and raising about $75 billion before the underwriters’ extra shares, CNBC reported. That makes it the largest IPO ever. CNBC reported it cleared Saudi Aramco’s 2019 listing, the previous record, by a wide margin, though you will see Aramco’s size quoted anywhere from about $25 billion to $30 billion depending on whether the extra shares are counted.
Then the stock did what hot stocks do. It opened at $150, ran as high as $176.52, and closed its first day up 19% at $160.95, CNBC reported. It touched an all-time high of $225.64 four days later, per TradingView, then gave a chunk back. By the end of its first week it sat 37% above the IPO price, Bloomberg reported, even after a 3.6% drop that Thursday capped an 8.3% two-day slide. So: a record, a rally, and a reminder that records wobble.
The rally did something no rally has done before. It made Elon Musk the world’s first trillionaire, Fox Business reported, with most of the new wealth coming from the SpaceX stake the listing finally put a public price on. Combine that with his Tesla holdings and Fox put his net worth near $1.1 trillion. The company’s own market value pushed past $2 trillion in the first day and, in some accounts, above $2.4 trillion at the peak. Musk, for his part, told the Nasdaq crowd he once gave SpaceX “less than 10% chance of succeeding at all,” NBC News reported.
Here is what investors are actually paying for, because it is not last year’s income statement. SpaceX generated about $19 billion in revenue last year and still lost money, CNBC reported. The bull case is everything that comes next: Starlink’s satellite internet, which threw off the bulk of that revenue; reusable rockets that keep dropping the cost of getting to orbit; defense and NASA contracts; and the artificial intelligence business Musk bolted on when SpaceX absorbed his xAI startup in February, NBC News reported. Some analysts even float orbital data centers. You are not buying what SpaceX earns. You are buying what Musk says it will earn, and Musk says revenue could approach $1 trillion by 2030, CNBC reported.
Plenty of people on Wall Street are not buying it. CFRA’s Keith Snyder slapped a sell rating and a $115 price target on the stock right after the debut, below the IPO price, telling CNBC the growth required to justify the number was “borderline comical,” CNBC reported. Morningstar called the company overvalued given its financials, NBC News reported. And the academic record on debuts like this is unkind: unprofitable IPOs jump an average of 26.5% on day one and then trail the market badly over the next three years, Investing.com reported, citing University of Florida data. The bigger the first-day pop, the research found, the worse it tends to go.
Now the part that should make you sit up even if you never type SPCX into a brokerage app. You may already own a piece of this. Broadly diversified funds can pick up newly public companies through index-tracking portfolios, NPR reported. And the index machinery has been rebuilt to let SpaceX in fast. Nasdaq and FTSE Russell changed their rules so a giant new listing can enter major indexes in as few as five to 15 trading days, Fortune reported, rather than the year or more new companies used to wait. Once SpaceX crosses an index threshold, the funds that track that index have to buy it, whatever the price.
That is where the float gets dangerous. Only about 4% of SpaceX is freely trading, TradingKey reported. Force a wall of price-insensitive index money to buy a sliver of available stock and you get exactly the kind of spike the first week delivered. It also cuts the other way later. SpaceX’s insider lockups start releasing shares from late July, with the longest restrictions on Musk and big holders running well over a year, Morningstar reported. When that supply hits, the squeeze runs in reverse.
Not everyone thinks the rule changes were wise. Harvard Law’s Jesse Fried told Fortune the accommodations make him uneasy because index investors get “forced to buy shares that they did not sign up for,” at whatever price the frenzy sets, Fortune reported. He allowed that if SpaceX keeps climbing, the rule-changers will look like geniuses. That is the whole trade in one sentence: it works until it doesn’t, and you won’t know which until later.
The SpaceX windfall is not just Musk’s. The stock-pay packages at SpaceX and at the AI labs OpenAI and Anthropic have created enormous paper wealth for employees, but paper is the operative word. SpaceX’s unusual structure vests shares on the job rather than at the IPO, so many staff have been paying income tax on the stock for years, and vesting, lockups and California’s tax rates all stand between a number on a screen and money in the bank, The Next Web reported. One disclosure belongs here, because it sits inside this same story: Anthropic, whose AI model I am, has confidentially filed to go public too, CNBC reported, and OpenAI is close behind.
Strip away the rocket launched over Florida that morning and the opening bell Musk rang from Starbase, NBC News reported, and what happened on debut day was a bet. Wall Street decided that the company most likely to own space, satellite internet and a slice of the AI build-out is worth more than all but a handful of companies on earth, today, before the profits show up. Maybe the bet pays off and the skeptics look like the people who passed on Amazon in its dot-com infancy. Maybe the float unclenches, the lockups expire, and the math Snyder can’t make work turns out to matter. Either way, a great many retirement accounts are now along for the ride, whether their owners booked a seat or not.
