Musk's SpaceX IPO could break the record for most money raised

Elon Musk's SpaceX is preparing what could be the largest initial public offering in history, seeking to raise a reported $75 billion at a valuation of roughly $1.75 trillion. The numbers are staggering. The implications for ordinary investors are sobering. And the historical record for mega-IPOs is, to put it mildly, not encouraging.

Let's start with what SpaceX actually is, financially speaking. The company reported under $19 billion in revenue last year and a net loss of $5 billion. That revenue would rank it around 226th in the Fortune 500, sandwiched between Newmont Mining and International Paper — two companies worth a combined $140 billion. SpaceX is reportedly seeking a valuation roughly 12 times that.

The valuation math gets even more striking in historical context. Google didn't reach a $1.8 trillion market capitalization until after it reported $258 billion in sales and $76 billion in profit. Nvidia, the hottest company on the planet right now, had $130 billion in revenue and $73 billion in profit before hitting that valuation. SpaceX is asking investors to pay $1.75 trillion for $19 billion in revenue and negative $5 billion in earnings.

The business itself is three distinct units bundled together. Starlink, the satellite internet service with more than 10 million subscribers, generates over half of total revenue and is reportedly profitable. The launch services division — putting satellites into orbit — could be profitable on its own, but SpaceX is pouring money into developing Starship, its massive next-generation rocket. And the AI division is losing what the S-1 filing reveals to be nearly $13 billion annually on data center construction.

The S-1 filing itself reads more like science fiction than a regulatory document. It mentions building a Mars colony for "species-level redundancy" and a fleet of orbital data centers powered by the sun. It claims a total addressable market of $26.5 trillion for AI services — roughly one-quarter of global GDP. And it includes the candid admission that "several of our anticipated market opportunities do not currently exist," a line you don't typically find in IPO prospectuses.

The proposed $75 billion raise would be nearly three times the previous global IPO record of $26 billion set by Saudi Aramco in 2019, and more than four times the $18 billion Visa raised in its 2008 offering, which was the largest US IPO at the time. Both of those predecessors carried warnings: Visa went public months before the Great Recession market crash, and Saudi Aramco debuted two months before COVID sent markets into freefall.

The historical pattern for mega-IPOs is not kind to early investors. Facebook dropped 24% in its first year. General Motors lost 34% in the year after its post-bankruptcy IPO. Rivian plummeted 73%. Uber fell 13%. The pattern is consistent: companies going public at extreme valuations tend to underperform the broader market over the next several years as reality sets in.

University of Florida IPO researcher Jay Ritter, whose work on post-IPO performance spans four decades, points to a specific warning sign. Companies going public at more than 40 times sales — already a rare and lofty multiple — have historically gained just 3% on average from their IPO price over the following three years, trailing the broader market by 15 percentage points. SpaceX is seeking to go public at more than 90 times sales.

Michael Burry, the hedge fund manager famous for predicting the 2008 housing crash, has been blunt: "Any move up will be on hype and technicals. Nothing in that S-1 suggests it is worth $1 trillion let alone $2 trillion."

Ritter also noted that starting as one of the world's most valuable public companies means most of the expected upside is already priced in. Nvidia, now worth over $5 trillion, went public at under $1 billion — allowing public investors to capture nearly all of its growth. SpaceX is essentially asking investors to buy at the finish line, not the starting gate.

"Anthropic, OpenAI, and SpaceX are all great companies," Ritter acknowledged. "There is a very plausible story for how they could be making huge amounts of money in the future. But starting out at such a high valuation, the upside is limited, and a lot of things have to go according to plan."

What This Means For You: If you're a retail investor considering buying SpaceX at IPO, understand that you're paying a premium that assumes virtually everything goes right. At 90 times sales, the company needs to execute flawlessly on Starship, Starlink expansion, and AI infrastructure simultaneously. If you're an institutional investor, the question isn't whether SpaceX is transformative — it clearly is — but whether the current valuation leaves any room for your limited partners to see returns. If you're a SpaceX employee with equity compensation, this IPO could be a liquidity event that locks in gains — but the historical pattern suggests patience may be rewarded more than buying on day one. And if you're watching the broader market, a SpaceX IPO at this scale could create significant capital flow dynamics, pulling money from other sectors into what will instantly become one of the most traded stocks on the planet.