Asger Risom
Elon Musk’s SpaceX could raise around $50 billion in an IPO, potentially surpassing the total amount raised by all IPOs last year and creating one of the largest public offerings in history.
Elon Musk’s SpaceX could soon pull off what analysts are calling the “mother of all IPOs” — raising more money in a single public offering than all U.S. IPOs combined last year.
If current estimates hold, the company’s debut could reshape capital markets and deliver an enormous windfall to Wall Street banks.
A trillion-dollar space company
SpaceX’s potential listing gained momentum after the company absorbed another major Musk venture: xAI, the artificial-intelligence firm behind the Grok chatbot.
Recent funding rounds valued SpaceX at roughly $800 billion, while xAI reached about $230 billion before the acquisition. Combined, investors are already assigning the merged entity a valuation exceeding $1 trillion.
According to reports from Bloomberg and the Financial Times, Musk is now targeting a market capitalization of roughly $1.5 trillion in the IPO — while raising around $50 billion in fresh capital.
If achieved, that would instantly place SpaceX among the most valuable companies in the world.
Bigger than a full year of IPOs
The scale of the offering would be historic.
A $50 billion raise would exceed the $44 billion raised by all 90 IPOs last year combined, according to market data cited by Fortune.
It would also become the largest IPO fundraising ever, surpassing the previous record set by Japan’s Nippon Telegraph & Telephone in 1987 when adjusted for inflation.
In terms of valuation, a $1.5 trillion debut would rank second in history, behind only Saudi Aramco’s $1.7 trillion listing in 2019.
Wall Street’s biggest payday
While investors debate whether the valuation is justified, one group is almost guaranteed to benefit: the investment banks managing the deal.
IPO underwriters typically charge around 2% in fees, meaning a $50 billion offering could generate roughly $1 billion in direct fees alone.
But the bigger profits often come from a phenomenon known as IPO “underpricing.”
In most listings, shares are deliberately priced below what the market will eventually pay. That leads to a sharp jump — or “pop” — when trading begins.
Historically, IPO stocks rise about 19% on their first trading day, according to research from University of Florida professor Jay Ritter.
If SpaceX followed that pattern, early investors could see a paper gain of roughly $9.5 billion in a single day.
Investment banks often capture a portion of that upside through future trading business from those favored investors.
A giant valuation — without profits
Despite the excitement, SpaceX’s financial picture remains opaque.
After more than two decades of operations, the company still does not report net profits, according to analysis cited by Fortune.
To justify a $1.5 trillion valuation over time, analysts suggest the company would eventually need to generate earnings exceeding those of Berkshire Hathaway.
Supporters argue that SpaceX’s growth potential — particularly its Starlink satellite internet network — could eventually support that scale.
Musk may try to bypass Wall Street
Musk is also known for challenging financial conventions, and analysts say he could pursue alternative ways of taking SpaceX public.
One option is a direct listing, where shares begin trading without the traditional underwriting process used in most IPOs. Companies such as Spotify, Coinbase and Palantir have used this method.
Another approach is limit order book building, where institutional investors must state both how many shares they want and the price they are willing to pay.
Both strategies could reduce the billions of dollars typically lost to IPO underpricing and underwriting fees.
“Musk is known as a maverick,” Ritter said. “He fits the profile of the kind of CEO that in the past has gone for this kind of tradition-breaking solution.”
Whether the billionaire decides to follow the traditional Wall Street playbook — or rewrite it — could determine how much money ultimately changes hands in what may become the largest IPO ever attempted.
Source: Fortune
