This is the first time SpaceX has made a concerted effort to enter the public market, with a three-day tour of closed-door briefings to Wall Street top analysts this week – the first of its kind, and the kind of event that suggests the company is considering taking a serious step toward launching what could otherwise become the largest initial public offering in financial history.
Three individuals close to the issue, said the briefings cover the most strategically important assets of the company, its Starbase rocket and satellite launch complex in Boca Chica, Texas, and its massive Colossus data center in Memphis, Tennessee. The meetings are being conducted under very high secrecy conditions under which the participants are reportedly expected to hand over their electronic devices prior to entering the meetings; a move which highlights just how sensitive the kind of information being shared is deemed to be.
The magnitude of what SpaceX is trying to un attach can hardly be overestimated. The company of Elon Musk is said to be planning to raise $75 billion with the help of the offering, aiming at reaching a valuation of about 1.75 trillion. Assuming such numbers, the IPO would be the largest initial public offering of all time, topping even the historic 2019 IPO of Saudi Aramco, which had long been the largest initial offering. The executives are currently working towards a late June trading debut, although no official date has been announced publicly yet.
The schedule of the briefing itself is structured in a series of phases which are meant to provide analysts with a different aspect of the business. A one day meeting and an on-site tour got organized on Tuesday at the Starbase plant in Boca Chica, which is the same site where SpaceX has been developing its Starship program and perfecting its reusable rocket technology. Wednesday saw a second meeting at Starbase, but this time with a different group of analysts who represent institutional investors, including some of the largest mutual funds and pension plans, whose capital would be key to an offering such a scale.
The session on Thursday changed all that. SpaceX had analysts visit its Macrohard project at the Colossus data center in Memphis – a project that is an indication of a larger ambition that extends far beyond the launches of rockets and constellations of satellites. The presence of a massive data center operation is a clue that SpaceX plans to establish itself not only as an aerospace business but as a vertically aligned technology and infrastructure business. The satellite internet service of the company, Starlink, already has high recurrent revenues, and the data infrastructure around it is obviously being developed in the direction of the same trend.
The secrecy and spectacle that accompany this specific conversation about the IPO is what makes it so peculiar. The typical aspect of the pre-IPO process is analyst days – companies regularly bring institutional buyers and their research teams to know the business prior to a roadshow. Not many companies have such sensitivity in their operations as SpaceX. The complexity of its government agency contracts, its work related to defense, and the competitive nature of the commercial space industry all contribute to it being a more complex affair than it would otherwise be a typical technology company going public. The fact that phones have to be handed over prior to entering such sessions is not just a show; it is a real concern that the information leaks out that may compromise national security interests or market positions.
The fact that Musk plans to distribute about 30 percent of the shares of the offering to retail investors, including international investors, is another factor that makes this IPO unusual when compared to traditional large-scale offerings. The access of retail customers to marquee-sized offerings has traditionally been restricted, and the majority of shares had been allocated to institutional clients of underwriting banks. When SpaceX does so, it would be a significant break with the historic structure of blockbuster IPOs, and would probably create an enormous amount of public attention to the stock as soon as it is listed.
The company has been one of the most monitored private businesses in the world in the last few years due to its track record. Its Falcon 9 rockets have become the workhorse of commercial and government launch contracts. Starlink has expanded to become an international broadband network with millions of subscribers in dozens of countries. And the Starship program, which is currently under development, is regarded as a possible platform of missions not only up to lunar logistics but also towards interplanetary exploration. Combined, the business is, in fact, a difficult investment case – a combination of short term cash returns on satellite services and launches with long term and high risk investments in the future of human space activity.
There are, of course, open questions, which cannot be answered completely by any analyst briefing. SpaceX is a secretive business and has little disclosure of its finances to the public, meaning investors will take whatever comes out of these sessions with a grain of salt. Decision-making has long been viewed as a governance issue at Tesla with decision-making power concentrated in the hands of Musk, who also heads xAI and other projects, which would otherwise make institutional investors eager to adopt the technology and market position of Tesla. And the regulatory landscape of the two satellite communications and commercial spaceflight is still developing in manners that are hard to predict accurately.
