For about a week, many media outlets have reported rumors that the largest and most profitable private space company in the world is considering an initial private stock sale at an $800 billion valuation (“to provide liquidity to employees and investors,” according to Elon Musk), followed by a full-scale initial public offering (IPO) that would make SpaceX a public company valued at $1.5 trillion.
The price will be 800 billion dollars twice SpaceX’s private market capitalization at the time of its most recent capital raise.
The $1.5 trillion price would be almost 4 times that.
Image source: SpaceX.
Ars Technica’s Eric Berger confirmed the rumor, or at least the IPO part, in a column last week. He could also guess From where SpaceX is going public. (And Elon Musk He confirmed that he had guessed correctly.)
“Raising large amounts of money over the next 18 months will allow Musk to have significant capital to deploy at SpaceX,” Berger wrote. What Musk plans to do with this money is “develop a modified version of the Starlink satellite that will serve as the basis for building data centers in space.”
After all, SpaceX’s CEO wants to build “satellite factories on the Moon” and build an “electromagnetic rail gun” there to “accelerate AI satellites to Moon escape velocity without the need for rockets.” This will allow SpaceX to launch “>100TW/yr AI” data center satellites into space to provide artificial intelligence (AI) services to everyone on Earth (just like SpaceX provides internet services to Earth via Starlink satellites).
So SpaceX’s IPO is a way to end SpaceX’s dominance of AI on Earth.
As business plans go, this seems like a bit of a long shot, perhaps even a “monthly shot.” But this is far from the only arrow in SpaceX’s quiver.
With only a few weeks until 2025, SpaceX has already launched Falcon 9 rockets more than 160 times; This is more than half of all launches by all companies (and nation states) in the world. The company reached a milestone of 500 successful landings in October; this was the most of any company in the world. (No. 2 is Blue Origin, which has landed once.) A special Falcon booster called “B1067” has made an incredible 32 takeoffs and landings, with turnaround times between flights as short as three weeks.
SpaceX launches a rocket approximately every two days, and the vast majority of those launches carry satellites for the company’s Starlink satellite internet constellation.
Starlink currently has more than 9,000 satellites in orbit; Most of these provide satellite internet, but many are tasked with providing direct-to-cell mobile communications for cell phones, and others perform missions for the military as part of Starshield. Starlink deployment will accelerate once SpaceX fixes bugs on its even larger Starship rocket.
And SpaceX has a number of other projects in the works, from building landers to sending astronauts back to the moon, sending space tourists into Earth orbit, and now potentially building AI data centers in space.
last time I tried to put a valuation on SpaceXIn 2019, it was a much smaller company, generating about $2 billion in annual revenue and had a private market capitalization of about $30.5 billion. Six years later, SpaceX is estimated to be doing $15 billion in annual business (mostly from Starlink). Analysts at Payload Space predict revenue is growing at a pace of 50% or more and will likely reach $22 billion to $24 billion next year.
Compared to that revenue, a $1.5 trillion IPO would value SpaceX at between 62 and 68 times sales; This is significantly more than the 12.2 times sales the shares achieved in the private market in 2019.
On the other hand, SpaceX increased its annual revenue by approximately 33% per year between 2018 and 2025. But 2026 projections (assuming they’re accurate) show the company’s revenue growth actually exceeds 50% today. This suggests a higher valuation may be justified, although I must admit that “68 times sales” may be a bit of an exaggeration.
As a general rule, I don’t value most space stocks at more than four times sales. Let’s face it, “most space stocks” are out-of-the-money against SpaceX, which says its earnings before interest, taxes, depreciation, and amortization (EBITDA) are at least positive and its “cash flow has been positive for years.”
Again, a good argument in favor of SpaceX deserving of this award. some a kind of premium valuation. But my hunch is still that when this IPO happens, it will be at a valuation that is very difficult to defend.
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