SpaceX is preparing for one of the largest initial public offerings in Wall Street history, though the valuation has been adjusted downward. According to a report from Bloomberg on Friday, the company now expects a valuation of at least $1.8 trillion, a reduction from the over $2 trillion figure cited in April. The news comes as the rocket and satellite firm, led by Elon Musk, gears up for its IPO roadshow.
The roadshow is scheduled to begin on June 4, Reuters reported, with the company targeting a share sale on June 11 and a Nasdaq debut as early as June 12 under the ticker symbol SPCX. The roadshow will involve management and bankers pitching the deal to major institutional investors before the final pricing is set.
In a significant boost to its business prospects, SpaceX secured a $4.16 billion contract from the U.S. Space Force on Friday for the Space-Based Airborne Moving Target Indicator project. The satellite system is designed to track airborne threats from orbit. Colonel Ryan Frazier emphasized that the project aims for "sustained battlespace awareness" but noted that the Space Force is not relying on any single provider.
Earlier in the week, SpaceX also received a $2.29 billion firm-fixed-price award for the Space Data Network Backbone, a secure satellite communications system. Under this contract, SpaceX bears more of the cost risk, with a requirement to deliver a working prototype by the end of 2027.
The company's valuation has drawn scrutiny from some investors. Danish pension fund Akademikerpension quickly added SpaceX to its exclusion list on Friday, citing the $1.8 trillion valuation as incompatible with its own threshold of over $1 trillion. The fund also criticized what it called "extremely deficient" governance, noting that Elon Musk is set to hold over 80% of voting rights while simultaneously serving as CEO, CTO, and chair. SpaceX did not respond to a request for comment from Reuters.
Analysts have raised concerns about the valuation's justification. At a $1.75 trillion valuation, SpaceX's price-to-sales ratio would be close to 100, compared to Nvidia's ratio of 24. University of Florida IPO expert Jay Ritter told Reuters that companies with such high multiples typically demonstrate significant growth potential, but he cautioned that "stuff could go wrong."
SpaceX's financials also present challenges. The company reported an accumulated deficit of $41.31 billion as of the end of March, with AI business losses totaling $2.47 billion for the March quarter. SpaceX has warned that its growth is "highly dependent on Starship." eToro's Josh Gilbert noted that the question is not whether SpaceX is "a real business," while Greg Martin of Rainmaker Securities argued that the valuation cannot be justified on "traditional fundamental metrics alone."
Meanwhile, a major competitor has hit a setback. Blue Origin, Jeff Bezos' space firm, suffered a significant delay after its New Glenn rocket exploded during a test, as reported by Reuters on Saturday. This incident knocks the heavy-lift rocket out of competition for several months and could stall Amazon's Leo satellite launches, leaving SpaceX in a stronger competitive position. However, Seraphim Space CEO Mark Boggett emphasized that the industry still requires a "multi-provider ecosystem."
FTSE Russell has indicated that SpaceX could qualify for fast entry into major U.S. and global equity indexes, potentially opening the door to index-tracking funds that automatically buy stocks to match benchmarks. This could provide additional support for the stock's price after listing.
As the IPO approaches, investors face a complex picture. The coming week will serve as a price test rather than a celebration, with a new defense contract angle, a weakened competitor in Blue Origin, and potential index buying. However, governance concerns from a pension fund and questions about the appropriate valuation for Musk's ambitious but not yet realized businesses remain key uncertainties.
