SpaceX stock opens up 11 percent

This makes Musk, through his stakes in SpaceX and electric carmaker Tesla, the first person with a trillion-dollar fortune—at least on paper. SpaceX’s valuation reached just under $2 trillion at the opening price.

SpaceX, known among other things for its satellite internet service Starlink, sold approximately 555.6 million shares at an offering price of $135—raising $75 billion (€64.8 billion). In the previous largest IPO, the Saudi Arabian oil company Aramco raised just over $29 billion in 2019.

Even at the offering price, SpaceX was worth $1.77 trillion—more than Facebook parent company Meta, for example. With its initial share price, the company ranks among the most valuable U.S. companies—behind Nvidia, Apple, Google’s parent company Alphabet, Microsoft, and Amazon. Nvidia, the chip specialist fueled by the AI boom, is number one with a current valuation of just under $5 trillion.

Billions in losses on SpaceX’s balance sheet

SpaceX’s raw 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 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.

In its IPO prospectus, SpaceX estimated the future total market for artificial intelligence, including infrastructure, at more than $26 trillion—and cited this as justification for the high valuation. New York economics professor Aswath Damodaran, who is known as a valuation expert, sharply criticized this. When he read the figure, he thought Musk’s chatbot Grok had written the prospectus, “because we know that AI is prone to hallucinations,” he said on CNBC.

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. Speaking about the trading debut, Musk said, among other things, that he had given SpaceX a ten percent chance of success when he founded it.

In the days leading up to the IPO, Musk found time to meddle in British politics once again. Through his online platform X, he amplified the voices of extreme critics of Britain’s immigration policy ahead of racially motivated riots.

Starship: An Expensive Hope

In the first quarter of this year, SpaceX posted a loss of $4.28 billion on revenue of approximately $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. The company expects the rocket to be able to conduct commercial flights in the second half of the year once all tests are completed. It is intended 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.

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.

Windfall for Early Investors

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 is turning into 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.