SpaceX IPO is Musk ‘referendum,’ say market watchers
Elon Musk at SpaceX in Brownsville, Texas, on May 27, 2025.
Marvin Joseph | Washington Post | Getty Images
SpaceX’s highly anticipated IPO on Friday could be a defining moment for capital markets and a “referendum” on Elon Musk’s leadership, market watchers say.
Musk’s eye-popping $1.75 trillion valuation target reflects a price-to-earnings ratio of almost 100x, compared to around 20-25x for the chip giant Nvidia and about 10 times Apple.
Nasdaq recently introduced rule changes to make it easier for SpaceX and other firms planning mega IPOs to list. Nasdaq 100S&P Global refused to make exceptions that would allow the group to enter the market early. S&P 500.
What voting rights will Elon Musk retain?
But investors are also being asked to make exceptions for both the valuation and Musk’s insistence that he will retain an estimated 80-85% of SpaceX voting rights; This often acts as a deterrent. Investors are weighing stocks, even those of companies that, unlike SpaceX, have a stable profit history.
Matt Calkins, CEO of enterprise software company Appian, told CNBC’s “Squawk Box Europe” on Thursday that the IPO was “a referendum on how much confidence Elon and investors have in this individual entrepreneur.”
“I think they have a lot on their plate because he has done a lot and they are betting that he can open new markets, but that is highly speculative.
“I don’t want to invest [and] “I wouldn’t want to make predictions either way about an IPO like this.”
“We are at an early stage where there is tremendous uncertainty and most investments will be based on personal beliefs. It is too early to be financially wise on such matters.”
Ben Ritchie, head of developed markets equities at Aberdeen Investments, said in a note on Thursday that the IPO will test investors’ “willingness to embrace a new model of public equity ownership: high valuation, limited management rights and belief in a founder-driven vision.”
He added: “This combination has worked before. But at this scale?”
Will SpaceX shares reach $330?
However, many investors are bullish and think SpaceX shares will continue to rise in the near and long term, despite their skyrocketing debut.
Analysts at New Street Research said in a note on Thursday that they expect the company’s shares to reach $165 within 12 months of the IPO, reflecting a 22% upside and a $2.3 trillion valuation given the group’s proposed acquisition of code editing company Cursor.
Analysts said: “The space opportunity is large and diverse and will expire in more than a decade.
“With this in mind, we propose an alternative top-down approach to estimate the enterprise value the space opportunity could represent in 2040 and extrapolate this back to today.
“Based on our low-end market growth assumptions, our $2.3 trillion valuation assumes: [SpaceX] Win 75% of this market.
“If… the entire opportunity hits our top estimate and SpaceX earns 50% of the shares, that would imply a fair value of $330 per share.”
But James Dow, a professor at London Business School’s finance school, called for caution in assessing SpaceX’s long-term space orbit.
“SpaceX’s valuation depends on what it does in 20 years,” he told CNBC’s “Squawk Box Europe” on Thursday.
“But in 20 years Musk will be quite old and I don’t know what he’ll do.” SpaceX’s valuation “is inevitably very tied to it, so I think that’s maybe one of the biggest risks,” Dow added.
