As SpaceX prepares to begin trading on public markets, investors are grappling with a question that extends well beyond the company’s blockbuster IPO: can a business valued at almost $1.75 trillion justify creating the world’s first trillionaire?
The listing, expected to be one of the largest in market history, has generated extraordinary demand.
Reports suggest the offering is up to four times oversubscribed, while Betashares said 30,000 Australian investors participated in the raising, representing an unprecedented level of local retail demand for a US listing.
The enthusiasm has been fuelled by SpaceX’s position at the intersection of several of the market’s most popular themes, including artificial intelligence, satellite communications and space infrastructure.
Yet the company’s valuation has sparked growing debate about how much investors should be willing to pay for future growth.
Anton du Plooy, 4Factor analyst at Ninety One, said the valuation was difficult to justify using traditional measures.
“Let’s start with what everyone is thinking but few may want to say plainly. The valuation being ascribed to SpaceX is, by any conventional measure, extraordinary. There are currently only 13 publicly listed companies worth more than $1 trillion.
“SpaceX would arrive at a multiple well above what comparable businesses trade at today, and the mental gymnastics required to justify that number on fundamentals alone are considerable.”
The valuation debate comes as a broader wave of AI-related listings gathers momentum. OpenAI and Anthropic have both filed confidentially for IPOs after securing private market valuations of $825 billion and $965 billion respectively, raising questions about whether markets are entering a new phase of technology-driven exuberance.
Research house Morningstar further scrutinised SpaceX’s IPO valuation target of $1.7 trillion, suggesting that Musk’s company is likely to be worth less than half of that at around US$780 billion.
While some investors view SpaceX’s valuation as excessive, others argue the market may be underestimating the breadth of the company’s operations.
Betashares investment strategist Hugh Lam said the business extends well beyond rocket launches, encompassing Starlink’s profitable satellite network and a growing AI operation that has secured more than US$2 billion in monthly revenue from Anthropic and Google.
“The trillion dollar question remains whether Elon Musk can make SpaceX just as successful as he did for Tesla when the latter IPO’d on the Nasdaq stock exchange on June 29, 2010,” Lam said.
Du Plooy also pointed to Tesla as a reminder that markets do not always value Musk-led companies according to conventional fundamentals.
“The Tesla comparison to SpaceX though is worth considering. Tesla has, for years, defied the gravity of its own delivery record relative to its Magnificent 7 peers, and yet its valuation has remained at a premium, partly due to elevated retail participation. Given Elon Musk is the key figure in both, it may be that this dynamic will apply to SpaceX too.”
Beyond public markets, the proposed valuation has raised ethical and societal implications.
According to Oxfam, the listing is expected to push Musk’s personal fortune above $1 trillion, making him the first person in history to reach the milestone.
The organisation estimates that would leave him wealthier than the poorest 46 per cent of the world’s population combined, equivalent to around 3.8 billion people.
“Elon Musk’s rise to trillionaire status marks a new pinnacle of oligarchy and a dark day for democracy,” said Nabil Ahmed, senior director of economic justice at Oxfam America.
“But this moment of dramatically concentrated wealth was not inevitable. Musk will be a government-backed trillionaire whose fortune was fuelled by an era of regressive public policy choices — decisions rigged by a tiny few to fuel their fortunes, and overwhelmingly supported by political leaders.”
Despite the excitement surrounding the float, market participants have warned that volatility is likely once trading begins.
Lam said the combination of a fixed offer price, exceptional retail demand and uncertainty around fair value could produce sharp price swings in the early days of trading.
“That said, investors should note that price action following the IPO is likely to be volatile as markets try to determine what the fair price of the stock should be upon listing. With a fixed offer price and a larger than usual retail allocation, the early float is also likely to be held by a more diverse and potentially less patient investor base, which could amplify near-term volatility.”
While the market will ultimately decide whether SpaceX deserves its trillion-dollar valuation, the listing is already shaping up as a test of investor appetite for transformative technologies and the premium they are willing to place on Elon Musk’s track record.
Lam noted that investors should resist the temptation to make concentrated bets on a single company, regardless of the excitement surrounding its debut, and instead view the space industry as part of a broader diversified portfolio.
