SpaceX: The Largest IPO in History

A Fiduciary Examination of Valuation, Scarcity, and the Risks Facing Public Investors

The financial media is saturated with stories about SpaceX’s proposed initial public offering. Most of those stories focus on rockets, artificial intelligence, Elon Musk, and the possibility that the stock may surge after it begins trading.

What receives far less attention is the valuation.

As fiduciaries, our responsibility is not to determine whether a company is innovative or whether its products may shape the future. Our responsibility is to determine whether the price investors are being asked to pay is justified by the risks they are assuming. In the case of SpaceX, that question deserves far more attention than it is currently receiving.

The $75 Billion Raise and $1.75 Trillion Valuation

According to SpaceX’s United States Security and Exchange Commission filings, the company intends to offer approximately 555 million shares at an anticipated offering price of $135 per share. If completed at those terms, the offering would raise approximately $75 billion and imply a valuation approaching $1.75 trillion.

$18.7 Billion of Revenue, a $2.6 Billion Operating Loss, and a $4.9 Billion Net Loss

To place that number into perspective, SpaceX generated approximately $18.7 billion in revenue during 2025 while reporting an operating loss of approximately $2.6 billion and a net loss of approximately $4.9 billion. The company is losing money “hand over fist.” It certainly appears that all the money raised in this unusual public offering will be used to fund other speculative adventures that Elon Musk wants to pursue. 

Why SpaceX Has No Meaningful Price-to-Earnings Ratio

Because the company is not currently profitable, investors cannot evaluate the offering using a traditional price-to-earnings ratio. There are no positive earnings from which to calculate one.

Instead, investors are being asked to value the company primarily on revenue and future expectations.

Wow! A 93x Revenue Valuation?

At the anticipated valuation, SpaceX would trade at approximately 93 times annual revenue. Put another way, investors would be paying approximately $93 for every dollar of revenue the company currently generates.

Whether one ultimately believes SpaceX becomes a dominant force in commercial space travel, satellite communications, artificial intelligence infrastructure, or industries that do not yet exist is not the issue. The issue is that investors are paying today for growth that has not yet occurred.

How SpaceX compares to other valuations & Initial Public Offerings: Google, Facebook, Amazon, Nvidia, Taiwan Semiconductor

The magnitude of that valuation becomes clearer when compared to other well-known public offerings and major publicly traded companies.

Google entered the public markets at approximately 10x revenue.
Facebook, now META entered the public markets at 10x revenue.
Amazon’s valuation at its IPO was closer to 2x revenue.

These companies were all profitable at IPO.

Today, the S&P 500 trades at approximately 3x revenue overall, a figure many analysts already consider historically elevated. 
Meta trades around seven times revenue. 
Taiwan Semiconductor trades approximately 15-17x revenue. 
NVIDIA, one of the most successful growth stories in modern market history, generally trades somewhere in the 15-20x range on a price-to-sales basis.

Against that backdrop, 93x price-to-sales is not merely expensive. It places SpaceX among the most aggressively valued and MOST SPECULATIVE major offerings ever brought to public investors.

This is an unprecedented valuation level for an initial public offering.

Why Future Expectations Are Driving the Valuation

Supporters of the offering would argue that these comparisons miss the point.

SpaceX is not being valued as a traditional company. Investors are not simply evaluating a rocket launch and retrieval business.

Many people don’t realize that Investment in SpaceX the rocket company also includes Starlink satellite internet communications, the only profitable componet, plus X, the social media successor to Twitter, and XAI Elon Musk’s artificial intelligence initiatives. The rocket company operates at a loss. It’s burning cash faster than rocket fuel, has government contracts, in pursuit of commercial space transportation, and numerous future opportunities that supporters believe may emerge over time. Meanwhile, we are familiar with a patern of big gaps between historic promises made by Elon Musk and actual delivery. 

There’s bizarre language in the SEC filing. SpaceX repeatedly frames its mission in terms of extending or preserving “the light of consciousness” beyond Earth. This is highly unusual language for an SEC filing, which typically focuses on products, markets, and financial performance rather than philosophical objectives. Reasonable people can disagree about the ultimate value of such ambitions and opportunities.

However, the broader and more ambitious the vision becomes, the easier it becomes to justify almost any valuation. Would you like to purchase some Snake Oil, anyone?

History teaches us that investors should be particularly careful whenever future possibilities begin carrying more weight than present financial results.

Traditional IPO Structures and Public Float

The structure of the offering itself introduces another consideration.

Traditional IPOs often place fifteen to twenty percent of a company’s shares into public hands. SpaceX is expected to make a considerably smaller percentage available to public investors.

How Scarcity Can Influence Share Price

Supply and demand influence prices regardless of whether underlying value changes.

When demand is high and supply is limited, prices often rise. Investors frequently interpret those price increases as evidence that a company is worth more than they originally believed. Sometimes investors are correct. Sometimes rising prices simply reflect a shortage of available shares.

A limited public float of 5% of SpaceX shares can create substantial competition among buyers and produce dramatic price appreciation immediately after an offering, even when the underlying economics of the business remain unchanged.

NASDAQ Rule Changes & Index Inclusion

Recent NASDAQ rule changes may add another layer to the story.


Historically, newly public companies often waited months before becoming eligible for inclusion in major indexes. NASDAQ has modified certain requirements affecting large newly public companies, potentially allowing companies such as SpaceX to become eligible for inclusion in the NASDAQ 100 after only 15 trading days. By comparison, Standard and Poor’s requires a year of trading prior to inclusion in its index of 500 stocks. 

How Indexes like the NASDAQ 100 Create Automatic Demand

Why does this matter?

Index funds do not make valuation decisions. If a company enters a major index, index funds purchase shares because they are required to own the securities represented by that index. This can yield notable effects downline on 401k and other mass-participation invesetment arrangements.

The purchase decision is not based upon profitability, earnings, cash flow, or valuation. It is automatic. As a result, billions of dollars may flow into a company regardless of whether professional investors believe the stock is attractively priced. In a situation where public share availability is already limited, additional demand from index funds can place further upward pressure on prices.

Potential Risks Introduced by Whales & Early Investors

The obvious risk is that enthusiasm rarely moves in only one direction.

Market history is filled with examples where public excitement reached its highest level after substantial price appreciation had already occurred. At that point, early investors, insiders, institutions, and other large holders often begin evaluating opportunities to reduce exposure and start selling realize gains. The main street retail investor speculators wind up “holding the bag.” Bad news.

The investing community frequently refers to these large institutional participants as “Whales.”

Genuine Risks Facing Retail Investors

If substantial selling emerges after a period of intense enthusiasm, investors who purchased shares at elevated prices may discover that demand is not nearly as permanent as they assumed.

Nobody knows whether that outcome will occur with SpaceX. Nobody knows where the shares will trade six months or two years from now.

What we do know is that investors are being asked to pay approximately ninety-three times revenue for a company that generated $18.7 billion in revenue while reporting a $4.9 billion net loss.

We know that a tiny percentage of shares are expected to be available to the public and that Elon Musk is expected to control 82% of voting share power.

We know that index-related demand may become a significant factor. We know that public enthusiasm is already substantial.

Those are the facts.

The Fiduciary Question

The purpose of this discussion is not to predict failure, nor is it to dismiss the accomplishments of the company.

The purpose is to focus attention on valuation because valuation remains one of the most important determinants of long-term investment returns. A company may execute successfully and still produce disappointing returns if investors paid too much at the outset. Likewise, a company may encounter challenges and still generate acceptable returns if purchased at a reasonable valuation.

As fiduciaries, our responsibility is not to participate in enthusiasm. Our responsibility is to evaluate risk, assess value, and determine whether the potential reward justifies the price being paid. In the case of SpaceX, that question matters far more than whether this becomes the largest IPO in history.