June 12th SpaceX goes public, Musk is just one step away from becoming a "trillionaire"

Author: Bao Yilong, Wall Street Insights

SpaceX will officially go public on June 12, issuing 555.6 million shares, raising $75 billion.

According to documents filed with the U.S. Securities and Exchange Commission on Wednesday, SpaceX plans to issue approximately 555.6 million shares at $135 per share, valuing the company at nearly $1.77 trillion.

The shares are expected to begin trading on June 11, and will be listed on Nasdaq and Nasdaq Texas under the ticker "SPCX" the following day.

Once the IPO is completed, Elon Musk will hold approximately 84.4% of voting rights, maintaining absolute control over the company.

According to Bloomberg Billionaires Index estimates, at an issuance price of $135, Musk’s net worth will reach $988 billion, just one step away from becoming the world’s first "trillionaire." A 2.2% increase in stock price to $138 could make this historic moment a reality.

However, SpaceX’s listing is not without controversy. Investment firm Morningstar believes the company is "seriously overvalued," with a valuation based on discounted cash flow models of about $780 billion, less than half of the IPO target valuation.

The largest IPO in history: a scale surpassing Saudi Aramco

The $75 billion fundraising will easily surpass Saudi Aramco’s 2019 record of a $29.9 billion IPO, making it the largest listing in history globally.

SpaceX is using a fixed-price offering rather than the typical U.S. IPO approach of announcing a price range first and then conducting a roadshow for price discovery. This is a rare precedent in the U.S. market, though more common in European and Asian markets.

Goldman Sachs, Morgan Stanley, Bank of America, Citigroup, and J.P. Morgan are serving as joint bookrunners, with 18 other banks participating in the underwriting, nearly covering all major global investment banks.

This IPO is also expected to pave the way for OpenAI and Anthropic’s IPO plans. Both companies aim to go public this year, with target fundraising of several hundred billion dollars.

Christina Minnis of Goldman Sachs recently stated at the Bloomberg Global Credit Forum that the boom in AI investment is a "fundamental, generational" phenomenon, driving markets and permeating the broader economy.

High revenue growth but expanding net losses, business model to be validated

SpaceX’s financial data presents a stark duality, posing certain challenges for investors.

The prospectus shows the company achieved $18.7 billion in revenue last year, a significant increase from $14 billion in 2024, but net losses turned from a profit of $791 million in 2024 to a loss of $4.94 billion.

The company plans to use the IPO proceeds to expand its AI business, rocket launches, and satellite infrastructure.

According to the prospectus, SpaceX must also use part of the debt financing and IPO proceeds within six months of listing to repay at least part of a $20 billion bridge loan, which was mainly used to refinance high-interest junk bonds for Musk’s social media and AI companies.

Regarding cash flow pressures, the document discloses that SpaceX has signed a contract with Anthropic to provide AI computing power services, worth $1.25 billion per month, which may help alleviate some of its AI funding needs.

Both parties can terminate the agreement with 90 days’ notice. Musk stated on X platform on May 28 that SpaceX has not committed to multi-year leasing but "may" extend it.

The prospectus also indicates that SpaceX’s potential market size is estimated at $28.5 trillion, with AI infrastructure being a core opportunity, including building space data centers.

Governance structure sparks controversy, Musk retains control

SpaceX’s ownership structure grants Musk near-absolute control.

Musk controls 84.4% of voting rights through holding B shares (each with 10 votes per share, compared to 1 vote per A share), owning 93.6% of B shares, enough to decide 51% of board seats and block any resolutions to remove him from leadership.

The nonprofit coalition Alliance to Protect Shareholder Value issued a statement on May 26 criticizing SpaceX’s governance policies as "attempting to severely weaken shareholder protections in a novel and reckless manner, while granting the leadership near-total administrative authority."

In terms of shareholder structure, Valor Equity Partners will maintain its position as the second-largest disclosed shareholder, holding 6.7% of A shares.

Valor founder and long-time Musk ally Antonio Gracias is a board member of SpaceX and has supported the rocket company for over a decade.

Morningstar warns of overvaluation and downward risks

Despite high market enthusiasm for SpaceX’s listing, Morningstar’s analysts offer a more cautious view.

Morningstar believes that the potential profitability of SpaceX’s xAI division involves multiple scenarios, and that "the economic moat is unclear," posing a "substantial value destruction threat" to the company.

Based on discounted cash flow models, Morningstar’s valuation is $780 billion, about 48% lower than SpaceX’s IPO target of approximately $1.75 trillion.

However, Morningstar also acknowledges that multiple factors could support the stock price remaining resilient in the short term after listing, including limited initial float, participation by nearly all major global underwriters, and high investor enthusiasm for AI infrastructure.

Additionally, SpaceX is expected to be included in the Nasdaq 100 index just 15 trading days after listing, a speed unprecedented in history.

Morningstar notes that even so, investors may have the opportunity to enter at more attractive prices after the IPO.