Space X IPO: The Good and the Bad

The Good

1. Starlink Is a Genuine Growth Engine Starlink is expected to be central to the SpaceX investment case. The satellite internet service passed 10 million subscribers in February 2026, after doubling its customer base in 2025 from 4.5 million to 9 million. Starlink accounts for an estimated $10 billion of total revenue in 2025 and generates around $6 billion in EBITDA from its core launch and satellite operations. This is a real, scalable business.

2. Unrivaled Launch Dominance SpaceX builds the Falcon and Starship rockets, runs the Starlink satellite internet network, and controls roughly 90% of the commercial launch market worldwide. It has dramatically lowered the cost of space access, undercutting rivals and winning long-term contracts from NASA, the Pentagon, and commercial satellite operators. That kind of structural moat is rare.

3. Public Access Will Fuel Growth For years, SpaceX was largely accessible only to venture capital firms, institutional investors, and a small group of private shareholders. Ordinary investors will have their chance to buy into SpaceX for the first time, which will likely fuel early price appreciation. SpaceX is targeting a retail allocation of 20-30%, which is a much higher percentage than the typical IPO, which reserves only 5% to 10% for retail investors. Tesla has similarly shown that it can grow it’s stock value for decades, based solely on public demand.

The Bad

1. The Valuation Is Untethered from Profitability (and Reality) SpaceX is targeting a $1.77 trillion market cap for a company that generated $18.7 billion in revenue last year and recorded an operating loss of $4.2 billion. At a $135 IPO price, SpaceX prices at roughly 94x its 2025 revenue, a multiple that has no precedent among the world's most valuable companies. Morningstar's analysts put fair value at approximately $780 billion, roughly 55% below the IPO price. This valuation mismatch suggests private SpaceX shareholders are going to benefit at the expense of the initial retail buyers.

2. Automatic Index Inclusion Forces Passive Investors In Recent changes made by major stock exchanges mean newly public companies can be added to passive index funds such as the S&P 500 and the Nasdaq 100 almost immediately, meaning trillions of dollars of retirement savings and pensions could end up buying into these companies despite overarching questions around their financials. At the time I’m writing this, the S&P 500 index reversed course on this decision, and won’t initially include SpaceX, but the Nasdaq will, which is not a normal procedure for new IPO’s.

3. Elon Musk Concentration Risk According to the company's listing prospectus, Musk will retain a tight grip on the company by controlling the board and holding more than 80% of stock voting power. That is a genuine governance and business risk, as public companies tend to have their voting power spread among a much larger pool of owners. While Musk has made Tesla the most valuable car company in the world, Tesla's share price and profits took a massive hit when Musk turned his focus on political issues. A single person's attention, reputation, and political actions are going to be “baked-in” to the stock price of a $1.77 trillion company. This is not normal for a public company of this size.