Author: Shen Chao TechFlow

Shen Chao Guide: On April 1, SpaceX submitted a confidential IPO registration document to the SEC, targeting a valuation of $1.75 trillion and planning to raise up to $75 billion. If successfully completed, it will break the record for the largest IPO in history at $29 billion for Saudi Aramco. Following the news, the aerospace sector surged, with Rocket Lab, Intuitive Machines, and others rising nearly 10%, and ETFs tracking the aerospace industry soaring nearly 5%.

However, market controversies are also intense: In February of this year, SpaceX completed a stock merger with its AI company xAI, which had annual losses exceeding $6 billion. Nasdaq's "tailored" 15-day fast inclusion rule has raised questions about forced buying by passive funds.

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The countdown to the public listing of Musk's space empire has officially begun.

According to reports from Bloomberg, CNBC, Reuters and other media on April 1, SpaceX has submitted a confidential draft of its IPO registration document to the U.S. Securities and Exchange Commission (SEC), targeting a valuation of over $1.75 trillion, with plans to go public on Nasdaq in June. This deal, internally codenamed "Project Apex", is expected to raise up to $75 billion, which would be more than 2.5 times the $29 billion record set by Saudi Aramco in its IPO in 2019, and it is anticipated to become the largest IPO in the history of human capital markets.

SpaceX has assembled a rare underwriting team of 21 banks, with Goldman Sachs, Morgan Stanley, JPMorgan, Bank of America, and Citigroup serving as lead underwriters. According to Reuters, Musk is considering allocating as much as 30% of the IPO shares to retail investors.

$1.75 trillion valuation anchored by Starlink, xAI merger boosts entity size

SpaceX's $1.75 trillion valuation target is primarily supported by its satellite internet business, Starlink. According to data from Teslarati and Spaceflight Now, Starlink is projected to have 9.2 million users by the end of 2025, with over 10 million users reached by February 2026, generating more than $10 billion in revenue for the entire year 2025, with analysts expecting this figure to potentially reach $24 billion in 2026.

In February of this year, SpaceX completed a stock merger with Musk's AI company xAI, with SpaceX's valuation at around $1 trillion at the time of the merger and xAI's valuation at approximately $250 billion; post-merger, the entity's valuation is about $1.25 trillion. According to estimates from Bloomberg Intelligence, the merged company is expected to have revenues close to $20 billion in 2026, with xAI contributing less than $1 billion.

The $500 billion premium from a $1.25 trillion merger valuation to a $1.75 trillion IPO target valuation reflects the market's optimistic outlook on the combination of space and AI. However, there is also significant skepticism. Benzinga cited insiders indicating that xAI was burning cash at a monthly rate of about $1 billion at the time of filing, and all 11 co-founders had left the company. One user on Hacker News bluntly pointed out that xAI has an annual net loss of about $6 billion, while SpaceX's good years showed a net profit of about $8 billion, meaning retail investors are essentially being forced to take over a heavily loss-making AI company.

Nasdaq's "tailored" rules: 15-day rapid inclusion into the index

Behind SpaceX's listing process, a rule modification by Nasdaq has sparked widespread controversy.

According to Bloomberg's report on March 30, Nasdaq announced new rules to take effect on May 1: Newly listed companies with a market capitalization ranking within the top 40 of the Nasdaq 100 index will only need to trade for 15 days post-listing to be included in the index; previously, the waiting period was at least 3 months. Nasdaq has also removed the 10% minimum free float requirement and will allow unlisted shares to be included in total market capitalization calculations.

According to Rio Times, SpaceX had previously listed "rapid inclusion in Nasdaq 100 post-listing" as one of the conditions for choosing Nasdaq over the New York Stock Exchange. Inclusion in the index means that ETFs and index funds tracking that benchmark (with Invesco QQQ managing over $300 billion in assets alone) will be forced to purchase stocks of the new member. Over $30 trillion in global assets are linked to major U.S. stock indices that are adjusting their rules.

Ross Gerber of Gerber Kawasaki Wealth Management criticized the practice of a company requiring index inclusion from the IPO as "extremely unusual," essentially using passive funds to prop up stock prices. Hedge funds can accurately predict institutional buying waves within the 15-day window, positioning themselves in advance for profit. Notorious investor Michael Burry calculated on the X platform that if SpaceX goes public at a $1.75 trillion valuation and only issues 5% of its shares, the publicly traded stock would be about $87.5 billion, but the Nasdaq would calculate it with a 5x multiple, meaning indexing funds would allocate weight as if SpaceX had a market capitalization equivalent to $437.5 billion.

Aerospace stocks surge, but geopolitical risks overshadow the listing window

On the day the news broke, the aerospace sector surged widely. According to CNBC, AST SpaceMobile and Rocket Lab rose nearly 10%, Firefly Aerospace, which just went public last August, surged 16%, and York Space, which went public in January this year, increased by 5%. According to Reuters, ETFs tracking the aerospace sector also rallied, with Ark Space & Defense Innovation up 2.9%, Procure Space up 4.9%, and the Destiny Tech100 fund, which invests in non-listed tech giants, rising 4.9%.

Peter Andersen, founder of Andersen Capital Management, stated that it is not uncommon for a large IPO to lead to a repricing of the entire industry, as investors typically interpret the IPO as a positive signal for the industry. Tuttle Capital Management CEO Matthew Tuttle bluntly noted that retail investors would be wildly chasing SpaceX's first-day trading, but he also warned that SpaceX has been private for much longer than most public companies, and most of the value appreciation has already been captured by private equity investors, leaving questionable space for public market investors.

Reena Aggarwal, a finance professor at Georgetown University and IPO expert, pointed out that even if a company has strong fundamentals and sufficient investor interest, an IPO could still fail in a poor market environment. The current U.S.-Iran war and soaring oil prices have led Nasdaq to recently experience its largest weekly drop in nearly a year, with market volatility remaining high. She expressed hope that the geopolitical situation would ease before June. Data from Polymarket shows a 63% probability that SpaceX will go public before June 30, which has risen by 10 percentage points after the news.

The big three AI giants cluster for IPOs, signaling the start of a super cycle of IPOs in 2026

SpaceX is not an isolated case. According to Bloomberg, SpaceX is expected to be the first among the three major super IPOs this year to go public, with OpenAI and Anthropic also preparing for their public listings within the year.

According to Gizmodo's analysis, the combined valuation of the three companies approaches $3 trillion. If they list closely together in time and are quickly included in the index, it will place immense pressure on market liquidity. SpaceX's IPO is not just about the aerospace industry, but also a barometer for whether the AI investment frenzy can continue. Nvidia's March GTC conference only caused slight stock price fluctuations, indicating the market's enthusiasm for the AI concept has begun to show signs of fatigue. The market response to these three IPOs will largely determine the next phase direction of AI trading.