Analysts Question SpaceX's $1.75 Trillion IPO Valuation

SpaceX is preparing for a highly anticipated public debut on June 12, targeting a massive $1.75 trillion valuation. However, the move has drawn skepticism from market analysts, including Morningstar’s Nicholas Owens, who estimates the company’s true value is closer to $780 billion. Despite the company’s dominance in launch services and the rapid growth of its Starlink satellite internet division, the firm remains unprofitable, reporting a $4.95 billion net loss last year driven by heavy investments in AI and experimental infrastructure.

The discrepancy between the company’s market valuation and its actual revenue—which would rank it 200th among U.S. firms despite a top-ten market cap—suggests that the IPO price is heavily influenced by speculative future projects and the personal brand of CEO Elon Musk. Analysts warn that the stock is likely to be overvalued at launch, particularly given the limited float of only 3% of shares and the artificial demand created by its inclusion in the Nasdaq 100.

For potential investors, the primary risk lies in the company’s unconventional lockup structure. Unlike the standard 180-day restriction, SpaceX is allowing early shareholders to offload portions of their holdings in staggered intervals starting just weeks after the IPO. This mechanism is expected to increase market volatility as long-term investors seek to realize returns after a decade of holding. Experts suggest that waiting for these early insiders to sell may provide a more favorable entry point for those interested in the company’s long-term prospects.