SpaceX’s IPO Challenge
Break out the oxygen masks. The number of breathless headlines is about to soar. SpaceX is expected to file its initial IPO paperwork with the Securities and Exchange Commission any day now. It will be the confidential version, so we won’t get to see it. But what is usually a procedural nonevent for the public has turned into a carnival thanks to the sky-high numbers bankers are throwing around regarding SpaceX’s offering.
Last week, for instance, we scooped the news that SpaceX’s bankers were saying the company could try to raise more than $75 billion. That’s a bonkers number. All of the companies that went public in the U.S. last year raised $77.5 billion between them, according to Dealogic. (And that was a big increase on the $41.4 billion raised in U.S. IPOs in 2024.) And SpaceX isn’t the only company expected to go public this year.
As we reported separately last week, Anthropic is discussing an IPO as soon as the fourth quarter and bankers think the AI company could raise $60 billion. OpenAI’s IPO is also on the horizon. Is there enough money sloshing around in the market to supply all three in the same 12-month period?
Never say never. In 2021, the boom year fueled by ultralow interest rates, investors poured $316 billion into IPOs. Then again, we haven’t been in that interest rate environment since 2022. And if markets remain as volatile as they are now, at least one of these companies will likely be disappointed.
OpenAI and Anthropic at least have the benefit of phenomenal growth—Anthropic’s annualized sales more than doubled in the first two months of this year, according to our report last week. SpaceX is a different story. Details of its financial performance aren’t readily available, but Reuters has reported that revenue hit around $16 billion last year. In 2022, The Wall Street Journal has reported, SpaceX’s revenue was $4.6 billion. Those two numbers suggest a far more sedate level of growth than the AI firms are enjoying.
It also means SpaceX might have a hard time going public at the valuation of $1.25 trillion Elon Musk put on the company when he combined SpaceX with his xAI. It doesn’t help that the biggest source of SpaceX’s revenue is its Starlink satellite internet service, which is hardly the kind of business one associates with stratospheric valuations. (This story provides a broader reality check.) On the other hand, the Musk following among public investors is enormous. So nothing can be ruled out.
Even so, until investors can see SpaceX’s financial statements—which probably won’t be for a couple more months—we won’t know what a realistic valuation or offering size will be. Banker-driven hype ahead of an offering is standard, but lots can happen to upset bankers’ wishful thinking.