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Ashley Murphy, CFP® GFP Fellow

Ashley works with clients to bring strategy, structure, clarity and confidence to their global financial lives and keep it that way. In 2013, Ashley founded Arete Wealth Strategists, a fee-only financial planning and investment management firm for Australian/American expatriates.

June 17, 2026

The SpaceX IPO: Hype, Fast-Entry Rules, and Skepticism

The SpaceX IPO is going to dominate the financial press for the next couple of weeks, and there is already a bit of hand-wringing over it. The largest initial public offering in human history aims to collect $135 a share from investors who want to get in on the ground floor of SpaceX as a public company—making the company’s valuation a whopping $1.5 trillion. Every financial publication is offering opinions, but one opinion that might offer the best insights is SpaceX’s own AI agent, called Grok.

Grok is not a fan. It notes that the offering price is roughly 100 times the company’s annual revenue—for a firm that has consistently posted multi-billion dollar losses. And it references a report by the Morningstar organization estimating that the company’s true value is closer to $780 billion, less than half of the IPO target.

The Morningstar report Grok references manages, in a subtle way, to question whether SpaceX will even be a true public company, since company founder Elon Musk plans to retain 85% of voting control through a dual-class share structure. Some of the concern focuses on how companies going public are supposed to, in exchange for the general public’s money, make themselves accountable to the shareholders who have invested in it. SpaceX founder Elon Musk slammed the door on accountability. Even though he’ll hold just over 40% of the company’s post-IPO equity, he’ll maintain 85% voting control, which means no mere shareholder will be permitted to challenge his decisions. The prospectus also mandates that investors cannot initiate a class-action lawsuit. If Chairperson Musk decides to put all of the company’s profits into his own pocket, there is no mechanism to challenge the decision. He cannot be fired as CEO unless he agrees.

Other areas of concern focus on the fact that the company is going public at a valuation that is more than 100 times revenues—for a company that happens to have been unprofitable since inception. (By comparison, the average multiple of stocks in the S&P 500—most of which tend to generate actual profits—is roughly 20.)

But a more interesting concern is how the stock is elbowing its way into the Nasdaq 100 index at a valuation that is almost certainly inflated. Somehow, Musk or the brokerage team selling SpaceX shares in the IPO market convinced Nasdaq to change its inclusion rules this one time—from a 12 month waiting period after the IPO (to prove its price stability) to a new ‘fast entry’ rule that allows the new publicly-traded stock into the Nasdaq club after just 15 trading days. Nasdaq also waived a less well-known rule that required at least 10% of a company to be sold to public investors before it can be listed. The SpaceX IPO will sell just five percent of its total shares; in fact, one could argue that, even after it raises $75 billion from the general public, SpaceX won’t be a true public company for the reasons listed above.

SpaceX will soon become the one of the largest components of the tech-related index—an estimated 7.4% of its total value based on the current IPO valuation. That means other stocks will have to ‘move over’ in order to make room for it. In practical terms, an index fund that tracks the Nasdaq 100 would have to sell proportionate shares of the other stocks in order to buy SpaceX shares at the current price. By one estimate, Apple computers, which make up roughly 9% of the Nasdaq index at the moment, would have to be trimmed down to 8.3%—meaning index funds will drop billions of Apple shares on the market over the next week or two. This is not because Apple did anything wrong or reported earnings issues; it is simply because the index math demanded a reallocation. All of the other companies in the Nasdaq index will experience the same stock dump, which could depress share prices of other tech firms.

One index that has held its ground on its rules of inclusion is the S&P 500. The widely-covered index requires that companies show a profit before they can join its club. That might not happen with SpaceX until and unless it has constructed data centers in the sky and has employees walking around the surface of Mars.

While the hype machine surrounding the IPO talks about colonizing Mars—decades away, at the most optimistic assumptions—SpaceX does have some unique business components. One of them is the launch architecture—reusable rockets that send satellites into space. The current Falcon 9 space ships carried 51% of all the orbital payloads in 2025, far ahead of the Chinese Space Agency, which is in second place. The next-generation Starship rockets (still in the testing stages) have significantly larger payload capacities.

Most of the Falcon 9 launches carried Starlink satellites, which offer Internet and mobile phone capacity to rural areas around the world. This is the source of most of SpaceX’s revenues: $11.3 billion last year. The IPO registration statement might exaggerate a bit when it suggests that Starlink’s mobile and broadband services have a combined market of $1.6 trillion in revenue—the Morningstar report dryly notes that this figure exceeds all current global spending on these services. The word ‘overhyped’ might come to mind.

The prospectus suggests a new revenue model: floating, orbiting data centers, with the components ferried into the sky by the (remember, still being tested) Starship rockets. These orbital data centers (the first is to be called Colossus) are, at this point, entirely hypothetical, but they would have the advantage of access to unlimited solar power. At the same time, they would be a bit slow (the industry calls this ‘latency’) since the communications back and forth to/from the ground take precious instants. Is the world ready for slightly slow AI response times?

X, aka Twitter, is also part of the SpaceX package, but the Morningstar report views it as somewhat inconsequential; its advertising revenues are minuscule compared with the space-related businesses. And revenue dropped by 50% since Elon Musk’s takeover in 2022.

And then there’s Grok, the AI skeptic about this whole investment ‘opportunity.’ SpaceX has invested $50 billion in its AI agent, and is paying an estimated $2.8 billion a year on gas turbines to power its data centers. SpaceX plans to invest $20 billion in a data center in Mississippi, in addition to a $3.4 billion investment in data centers in Tennessee. What kind of market share did this buy? An analysis of Apple App store downloads notes that the most-downloaded AI agent is ChatGPT, followed by Anthropic’s Claude, followed by Google’s Gemini. Grok failed to make the top 25. In all, Grok lost $2.47 billion in the first quarter of this year, compared with $818 million in revenues.

Last year, SpaceX generated $18.67 billion in revenue, but posted a net loss of $4.94 billion. Buying the company at its initial offering price means that you believe that the Starship rockets will test out successfully (probable), that SpaceX will be able to build Colossus and send data centers into the sky (questionable), that Grok will become a significant AI competitor (unproven to say the least) and that SpaceX employees will be crunching around the Martian terrain in a few years, looking for reasons to be there, and whatever profitable thing they might accomplish on the trip.

If anybody can see through the hype, it’s Grok. Investors would be wise to listen to it.

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