Key Takeaways
Elon Musk’s SpaceX is targeting a historic initial public offering on June 12 at a valuation of up to $2 trillion, but S-1 filings reveal the company lost $4.9 billion on $18.7 billion in revenue last year while spending billions on artificial intelligence.
"The valuation isn't really supported by the fundamentals," David Wagner, Aptus Capital Advisors' head of equity, said, adding that even after baking in 14 years of growth, "SpaceX is vastly more expensive than the top 6 most valuable US public companies are today."
The filing shows losses accelerating, with a $4.3 billion deficit in the first quarter of 2026 alone as capital expenditures surged to $10.1 billion. The prospectus also details a dual-class share structure that gives insiders 10 votes per share, concentrating control. In contrast to the losses, shares of listed space companies like Rocket Lab and Redwire are up over 78% year-to-date ahead of the landmark offering.
The IPO forces investors to weigh the promise of future markets like satellite internet and orbital computing against a governance structure controlled by insiders and a cash burn rate that includes nearly $20 billion in payment guarantees for hardware leased from a director's firm.
The IPO is set to create historic returns for a small circle of early backers and executives. Antonio Gracias, founder of Valor Equity Partners and a longtime Musk ally, holds a 7.3% stake in the company's Class A shares, valued at between $91 billion and $140 billion. President and COO Gwynne Shotwell holds shares and options that could be worth over $2 billion.
However, the prospectus also sheds light on complex financial arrangements. SpaceX's auditor, PricewaterhouseCoopers, flagged a series of hardware leasing deals between Musk's xAI and Gracias's Valor Equity Partners. SpaceX provides a full guarantee on nearly $20 billion in payments from xAI's subsidiary to Valor. PwC declined to treat the deals as a standard lease, forcing SpaceX to carry a $9 billion debt on its balance sheet related to the transactions.
The company's staggering valuation is built on investor belief in its future business segments rather than its current financial performance. ARK Invest, an early backer, identifies the Starlink satellite internet business as the "financial engine" that makes the entire vision viable. The firm estimates the satellite connectivity market could reach $160 billion annually.
Beyond Starlink, the company's launch services have already reduced launch costs by approximately 95% since 2008, according to ARK's research. The most forward-looking component of the valuation is tied to orbital data centers and the recently acquired xAI. Musk has stated a goal of launching 100 gigawatts of AI compute capacity per year, a plan some analysts have questioned but which underpins the bull case for the stock. For investors in the IPO, the question is whether that future potential justifies a valuation that dwarfs established profitable giants.
This article is for informational purposes only and does not constitute investment advice.
