With the SpaceX IPO planned for June 11, 2026, you may be wondering if it would be a good idea to buy in at this initial price, estimated at $135 a share, for a $1.7 trillion market cap.
Before you call your broker and sell off other stocks/re-mortgage the house/ cash in your retirement accounts, please do some research. An excellent place to start is the S-1 filing with the SEC: https://www.sec.gov/Archives/edgar/data/1181412/000162828026036936/spaceexplorationtechnologi.htm, which includes a very extensive (34 pages) section about the risks in this investment, as well as their current cash flow, current sales, etc. There are also a rather large number of pictures of rockets blasting off, just in case that stack of Playboys has lost its luster. It’s probably the best source of truth about the company’s health, but you might need to read between the lines.
Some things to keep in mind:
- Morningstar is cautioning that the projected IPO valuation is twice as high as their estimate of the company’s value.
- The Dow and S&P 500 announced on June 4 that they will not be changing their rules for index listing for “Mega Cap” companies like SpaceX, Anthropic, and OpenAI. This is good news in that your IRAs won’t be forced to buy it for their index funds, at least not until it meets certain requirements.
- Fidelity Investments just lowered the minimum account balance for retail customers to participate in the SpaceX IPO. Normally these shares would only be available to customers with over $500,000 in their accounts. However, normally only a small amount of IPO shares (5-10%) are released for retail investors, and SpaceX is going to offer 30% to the retail market. Is it lack of demand from the big investors, a sincere desire to spread the wealth for once, or a desire to cash out on the backs of less-sophisticated investors? Whichever, Fidelity will allow their customers with a minimum of $2,000 to buy shares in the IPO. There are restrictions on selling of these shares, however — Fidelity is enforcing a minimum hold of 15 days before you can sell in order to discourage flipping.
- SpaceX, through a bunch of self-dealing around xAI, owns Twitter, which is essentially a money-pit operating at a loss. The “X: the anything app” has so far not raised its revenue through subscriptions, not launched the promised video/new presence, and not become the next PayPal.
- xAI, which owns Grok, is also operating at a loss, but that hides a bigger risk, and that the company could sustain huge liabilities, regulatory barriers, and criminal charges in the future over Grok’s ability to generate deepfake porn. This is not even the only risk — their data center in Memphis is an environmental disaster for the locals, and it doesn’t take much imagination to foresee lawsuits or criminal sanctions on the facility.
- The S-1 for SpaceX includes a fair amount of information about Starlink: over 9600 satellites in its constellation now, operating in over 164 countries, with a total of 10.3 million subscribers. That’s an average of about 63,000 subscribers per country, which doesn’t seem likely to be covering the costs of launching all that hardware.
- As for the SpaceX launch business, their bread and butter launches are very likely a fairly low-margin business, even if their reusable hardware is cutting costs as expected. The real money is in heavy launch, but they keep blowing those rockets up, and now are endangering future NASA plans. Competition in both areas is eroding their lead, just like Tesla squandered its lead in EVs.
- The Risks section of the SpaceX S-1 goes into some detail about SpaceX governance, and just how much decision making power and voting power is held by Elon Musk. Shareholders are at risk of holding the bag with no way to change course using new leadership.
Frankly, given all these points, I think your gambling dollar is better spent on Polymarket. There are huge risks involved with this company, and like other Musk properties, rather a lot of hype. My advice is always – 1) research carefully and read between the lines, and 2) Don’t invest more than you can afford to lose.
Oh, and always remember, the brokerage gets their commission whether you are gaining or losing money. Be careful out there.