SpaceX Completes Record-Breaking IPO

Elon Musk’s space company SpaceX is making history with a record-breaking IPO. The company, known among other things for its Starlink satellite internet service, sold approximately 555.6 million shares at an offering price of $135—raising $75 billion in the process. The stock will begin trading on Friday. In the previous largest IPO, the Saudi Arabian oil company Aramco raised just over $29 billion in 2019.

SpaceX thus debuts on the stock market as planned with a valuation of $1.77 trillion—and is immediately worth more than, for example, the Facebook group Meta. With the IPO, Musk becomes the first person with a net worth of more than one trillion dollars—at least on paper, based on the value of his SpaceX shares and his stake in Tesla, the electric car manufacturer he also leads.

Billions in losses on SpaceX’s balance sheet

SpaceX’s actual financial figures stand in stark contrast to its market value—investors are paying more for the hope of future success. Last year, for example, the company posted losses of around $4.94 billion on revenue of $18.67 billion (just over €16 billion).

In the first quarter of this year, SpaceX posted a loss of $4.28 billion on revenue of around $4.7 billion. One reason for the losses is the high cost of developing the large Starship rocket.

SpaceX has invested a total of more than $15 billion in Starship. Company management expects the rocket to be able to conduct commercial flights in the second half of the year once all tests are completed. It is expected to significantly reduce the cost of space transportation. Starship will also be used to launch Starlink satellites into orbit, which will make internet from space directly accessible on smartphones.

Better Numbers Thanks to Starlink

Starlink is SpaceX’s main revenue generator and generated $3.26 billion in revenue in the first quarter. The satellite internet service now has around 10.3 million customers in 164 countries.

In the future, artificial intelligence is expected to be the biggest business—including through data centers in space. The idea behind this is that the sun can provide a lot of energy there.

Skeptics, however, point to problems such as the substantial construction costs, cooling challenges despite the low temperatures in space, and radiation that could damage circuitry.

Musk is in charge

With more than 80 percent of the voting rights, Musk will retain full control of SpaceX even after the IPO. This is based on shares with greater voting rights.

Unlike many other IPOs, SpaceX set the offering price of $135 itself in advance. Typically, companies first set a price range—and then determine the price based on investor interest.

For early investors in SpaceX, the IPO will be a windfall. According to financial news service Bloomberg, the investment firm Founders Fund, led by Musk’s longtime associate Peter Thiel, holds a stake of about three percent, which was acquired for approximately $600 million. At the offering price, the stake is worth more than $50 billion.

Venture capital firm Sequoia Capital reportedly invested around $2 billion—and now holds a stake worth more than $20 billion.