*Artificial intelligence company crosses over $2trn valuation
Kayode Tokede with agency report
Shares of SpaceX jumped 23 percent in their Nasdaq debut yesterday, as investors piled into the world’s largest initial public offering (IPO), betting on Elon Musk’s sprawling empire spanning rockets, internet services, and artificial intelligence. This made Musk the world’s richest man and its first trillionaire.
The stock was last trading at $166 a share after opening for trading at $150, making SpaceX the sixth-largest United States company, with a market value above $2 trillion, Reuters reported.
The company’s debut was widely viewed as a dress rehearsal for a new generation of mega-listings, with market participants watching for signals on investor appetite ahead of forthcoming IPOs for AI heavyweights Anthropic and OpenAI.
Musk commemorated SpaceX opening for trading on Nasdaq by attending a ceremonial bell ringing from SpaceX’s South Texas home, Starbase.
Musk’s net worth also includes stock in his separately-run electric car manufacturer, Tesla, as well as ownership stakes in a handful of other ventures, including the brain implant company Neuralink and the tunneling firm The Boring Company.
He founded SpaceX in 2002 and has revolutionised the space industry with partly reusable rockets and Starlink, a form of satellite internet that provides service to rural areas, airlines and the Ukrainian army. Musk said SpaceX was going public now because it wants to establish satellites and data centers in space, as well as eventually founding a 1 million-person colony on Mars.
He restated his goals to help humanity expand beyond Earth. “Not just a few astronauts, I mean literally you,” Musk said. “Whoever you are watching this, SpaceX wants to be able to take you to the moon, take you to Mars and ultimately beyond.”
SpaceX’s stock performance is being closely scrutinised in part because some bankers said the IPO market could face difficulties if SpaceX shares close below Thursday’s pricing level of $135 a share.
The landmark listing cemented Musk’s status as the first trillionaire ever – even though the firm posted a loss of nearly $5 billion last year and generated only a fraction of the revenue brought in by similarly valued tech giants.
“Elon deserves an extreme premium because of his track record and his vision for calling technology trends early,” a Sequoia Capital partner who led the firm’s investment in SpaceX, Shaun Maguire said.
At the IPO price, its $2 billion investment would be worth over $20 billion, a person familiar with the matter told Reuters.
SpaceX President Gwynne Shotwell and Chief Financial Officer Bret Johnsen rang the Nasdaq opening bell earlier on Friday.
The IPO is a culmination of Musk’s long-held ambitions in space and technology, and has stood out for rewriting Wall Street’s IPOplaybook and drawing legions of retail investors into the market.
At $75 billion, the deal’s proceeds were more than double those of Saudi Aramco’s record-setting 2019 IPO.
The valuation could rise further should underwriters exercise their right to sell additional shares, a decision typically made within 30 days after the offering.
Although SpaceX may have to wait for entry into the S&P 500 (.SPX), opens new tab, its expected fast-track inclusion in the Nasdaq 100 will soon make it a major holding for passive funds and ETFs that track the index, creating a fresh source of demand for its shares.
“We have to go back 100 years to get comparable entrepreneurs. He’s a visionary unlike others, and he executes extremely well,” CEO of ERShares, which manages an ETF that has an exposure to SpaceX, Joel Shulman said.
It will take about a month before it gets added to that index under Nasdaq’s new fast-entry rules, as opposed to a typical wait of as much as a year.
Some analysts expect SpaceX’s debut to trigger a reshuffling of investor portfolios, creating selling pressure on other technology heavyweights as funds rotate into the stock.
Yesterday, shares of other space firms and satellite companies declined sharply, reversing gains spurred by SpaceX’s April IPO filing, with Planet Labs (PL.N), opens new tab down eight percent and EchoStar (SATS.O), opens new tab down 14 percent.
For all the excitement surrounding the IPO, determining what SpaceX is actually worth remains a difficult valuation exercise.
SpaceX said its market opportunity spans $28.5 trillion, a figure it called the largest in human history. With its leading position in space – the firm says its operation is responsible for more than four-fifths of the mass launched into orbit over the past three years – and revenues from Starlink, some investors said it has a strong foundation upon which to build.
John Belton, portfolio manager at Gabelli Funds, said the best comparable to SpaceX is Musk’s electric vehicle company Tesla (TSLA.O), opens new tab, as each has an established business and “a moonshot opportunity on the other side.”
“For Tesla, that’s things like humanoid robotics and other future applications. For SpaceX, it’s the AI business,” he said.
With revenue of $18.7billion in 2025, the company’s market cap puts its price-to-revenue ratio at a lofty 94. Some analysts have already issued positive ratings on the company. Morningstar analysts this month said it is more fairly valued at around $780 billion, and CFRA on Friday started coverage with a sell rating.
“This is not a name you’re buying based on fundamentals. For me, the analogy is Amazon. This was a company that changed the way we live,” said Nancy Tengler, CEO and CIO of Laffer Tengler Investments. “If the stock drops to $100, that’s not ideal, but it wouldn’t change our long-term view. We want to participate.”