Boom! Elon Musk personally writes: SpaceX's biggest risk is himself! The deadly gamble behind the $1.25 trillion IPO

Here's the deal, Wall Street recently released a 330-page IPO prospectus, and SpaceX, valued at $1.25 trillion, is about to go public.

But guess what? The document starts by listing its own CEO, Elon Musk, as the "biggest risk factor."

The prospectus is very straightforward: the company is "highly dependent" on Musk, whose leadership and technical expertise are its moat. But in the next moment, the tone shifts—Musk is also running Tesla, Neuralink, The Boring Company, and has served as a senior advisor to the U.S. President. If he gets distracted, SpaceX's business could face "significant adverse effects."

More importantly, the prospectus admits that Musk is "unrestricted" in engaging in activities that directly compete with SpaceX. To put it plainly: this person is both a shield and a dagger.

Looking at related-party transactions, they are all substantial. SpaceX paid $131 million to buy Tesla's Cybertruck, with actual purchases exceeding the 1,279 units previously disclosed by Bloomberg. It also spent $697 million on Tesla's Megapack energy storage batteries to stabilize power for data centers in Memphis, Tennessee. Tesla, in turn, holds about 19 million Class A shares of SpaceX, accounting for less than 1%. Interactions with The Boring Company are minimal—tunnel company rented office space from SpaceX for $1.2 million, and SpaceX commissioned the company to dig tunnels in Texas at a cost of $1 million.

The real big move is the merger with xAI. The prospectus mentions "xAI" 356 times, "Grok" 243 times, and "X" 267 times. By 2025, SpaceX plans to invest about 60% of its capital expenditure—around $20 billion—into xAI. Last year, xAI was still operating at a loss, with revenue growth of only 22%. The prospectus itself admits that Musk's various companies competing for AI chips, memory, and other scarce resources could either collaborate or cannibalize each other.

Legal risks have already surfaced. In 2024, Tesla shareholders filed a class-action lawsuit accusing Musk of deliberately transferring talent and resources from Tesla to xAI. The case is still under review. The prospectus also adds a warning: Musk and his related companies have long been in the media spotlight. Every word he says and every decision he makes—whether related to SpaceX or not—can directly impact the company's stock price and customer relationships.

The final point is quite straightforward: betting on SpaceX is essentially betting on Musk himself. This is both the most exciting part of the investment and the riskiest, as it’s hard to quantify.

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