SpaceX made a spectacular entrance to the public markets on Friday, closing at $160.95 per share, a 19% gain from its $135 initial public offering price. The milestone debut propelled the company's market capitalization to approximately $2.1 trillion, making it one of the most valuable U.S. companies by market cap. The surge also pushed founder Elon Musk's net worth past the trillion-dollar mark, a historic first for any individual.
The IPO, which priced 555,555,555 Class A shares, raised $75 billion, surpassing the previous record set by Saudi Aramco in 2019. Shares began trading on the Nasdaq Global Select Market and the newly launched Nasdaq Texas exchange under the ticker symbol SPCX. Underwriters have a 30-day option to purchase an additional 83,333,333 shares, according to the pricing statement.
While SpaceX's debut dazzled Wall Street, the broader space sector experienced a sharp sell-off. Smaller space stocks, including Virgin Galactic, Rocket Lab, AST SpaceMobile, Intuitive Machines, and Planet Labs, all declined as investors rotated capital into the newly listed giant. Virgin Galactic dropped nearly 28%, while Rocket Lab and Planet Labs each fell about 8%. Intuitive Machines slid 11%, and AST SpaceMobile lost more than 12%.
Space-focused exchange-traded funds also suffered, losing between 1% and 6% after months of gains fueled by anticipation of the SpaceX listing. Analysts attributed the downturn to profit-taking and portfolio rebalancing. Chris Beauchamp, chief market analyst at IG Group, suggested that some investors may be concerned that the hype surrounding SpaceX cannot be sustained. Talley Léger, chief market strategist at The Wealth Consulting Group, described the rotation as "capital recycling," with funds moving out of smaller names to accommodate SpaceX.
SpaceX's valuation reflects more than its launch business. During its roadshow, the company pitched itself as a player in reusable rockets, Starlink satellite internet, artificial intelligence, and xAI, targeting a combined addressable market of $28.5 trillion. Despite this ambitious vision, SpaceX is not yet profitable. Reuters reported 2023 revenue of $18.7 billion, translating to a price-to-sales multiple of roughly 112 times. The Guardian noted an operating loss of $4.3 billion for the same year.
The listing also highlights governance concerns. SpaceX's filing outlines a dual-class share structure: Class A shares carry one vote each, while Class B shares have ten votes. Class B holders will have the power to elect most of the board, keeping control tightly held. Analysts are closely watching how Musk's influence will evolve, the company's AI ambitions, and the timeline for potential inclusion in index funds, as noted by The Guardian.
SpaceX's journey to the public market spanned more than two decades. Founded by Musk in 2002 after the sale of PayPal, the company achieved its first orbital launch with the Falcon 1 in 2008, becoming the first privately funded liquid-fuel rocket to reach orbit. The Dragon spacecraft docked with the International Space Station in 2012, and Starlink launches began in 2019. In 2021, NASA awarded SpaceX the Artemis lunar lander contract. This track record of innovation has kept investors engaged, but Friday's trading suggests Wall Street is now differentiating SpaceX from less proven space stocks.
With its massive market cap and ambitious growth narrative, SpaceX's public debut reshapes the investment landscape for the space sector, potentially drawing more capital to the industry while raising the bar for smaller competitors.
