Elon Musk is one step away from becoming a "trillionaire".

Written by: Bao Yilong

Source: Wall Street Journal

SpaceX will officially go public on June 12, issuing 555.6 million shares to raise $75 billion.

According to documents submitted to the U.S. Securities and Exchange Commission on Wednesday, SpaceX plans to issue approximately 555.6 million shares at a price of $135 each, corresponding to a market value of nearly $1.77 trillion.

The stock is expected to begin issuance on June 11 and will be listed on the Nasdaq and Nasdaq Texas under the ticker "SPCX" the following day.

After the completion of this IPO, Musk will hold about 84.4% of the voting rights, maintaining absolute control over the company.

According to Bloomberg's Billionaires Index, with the issuance price of $135, Musk's net worth will reach $988 billion, just one step away from becoming the world's first "trillionaire." The stock price needs to rise only 2.2% to $138 for this historic moment to arrive.

However, SpaceX's IPO is not without controversy. The analysis firm Morningstar believes the company is "severely overvalued," with their discounted cash flow model estimating a valuation of about $780 billion, less than half of the IPO target valuation.

Historic Largest IPO: Scale Surpasses Saudi Aramco

The $75 billion financing will easily surpass the $29.9 billion IPO record set by Saudi Aramco in 2019, becoming the largest public offering in history.

SpaceX has adopted a fixed issuance price method for pricing, unlike the usual practice for large IPOs in the U.S. of first announcing a price range followed by a roadshow to gauge investor interest. This approach is rare in the U.S. market and more common in Asian and European markets.

Goldman Sachs, Morgan Stanley, Bank of America, Citigroup, and JPMorgan Chase are acting as joint lead underwriters, with another 18 banks participating, encompassing almost all major investment banks globally.

SpaceX's listing is also expected to pave the way for the IPO plans of OpenAI and Anthropic, both of which intend to complete their listings this year, aiming to raise several billion dollars.

Christina Minnis of Goldman Sachs recently stated at the Bloomberg Global Credit Forum that the boom in AI investment is a "fundamental, once-in-a-generation" phenomenon that is driving the market and penetrating the overall economy.

High Revenue Growth but Expanding Net Loss, Business Logic to be Verified

SpaceX's financial data shows a stark duality, presenting certain challenges for investors.

The prospectus indicates that the company achieved revenues of $18.7 billion last year, significantly up from $14 billion in 2024, but the net loss shifted from a profit of $791 million in 2024 to a loss of $4.94 billion during the same period.

The company plans to use the funds raised from the IPO for expanding AI business, rocket launches, and satellite infrastructure.

According to the prospectus, SpaceX also needs to use part of the debt financing and the proceeds from this IPO to repay at least part of the $20 billion bridge loan within six months post-listing. This loan was primarily used to refinance Musk's high-interest junk bonds for social media and AI companies.

In terms of cash flow pressure, the documents reveal SpaceX has signed a contract with Anthropic to provide AI computing services, with a contract value of $1.25 billion per month, which is expected to alleviate some funding needs for its AI business.

Both parties can notify at least 90 days in advance to terminate the agreement. Musk stated on May 28 on platform X that SpaceX has not committed to a long-term lease yet, but there is "potential" for continuation.

The prospectus also shows that SpaceX positions its potential market size at $28.5 trillion, with AI infrastructure being a core opportunity, including building space data centers.

Governance Structure Raises Controversy, Musk Maintains Control

SpaceX's equity structure gives Musk nearly absolute control.

Musk controls 84.4% of the voting rights through his ownership of Class B shares (10 votes per share) compared to Class A shares (1 vote per share), holding 93.6% of Class B shares, sufficient to decide 51% of the board seats, and able to block any resolutions to remove himself from leadership positions.

The nonprofit coalition Alliance to Protect Shareholder Value issued a statement on May 26 criticizing SpaceX's governance policies for "trying to severely weaken protections for shareholders in a novel and reckless manner while giving SpaceX leadership nearly all administrative power."

Regarding shareholder structure, Valor Equity Partners will maintain its status as the second-largest disclosed shareholder, holding 6.7% of Class A shares.

Valor's founder and Musk's long-time ally Antonio Gracias is a member of the SpaceX board and has supported the rocket company for over a decade.

Morningstar Warns of Downside Risks Hidden in High Valuation

Despite the market's enthusiasm for SpaceX's IPO, analysts at Morningstar have issued a more cautious assessment.

Morningstar believes that the potential profitability of SpaceX's xAI division has various possible scenarios, and that the "economic moat is unclear," viewing it as a hidden risk that poses a "material threat to value destruction" for the company.

Based on the discounted cash flow model, Morningstar's valuation is $780 billion, about 48% lower than SpaceX's IPO target valuation of approximately $1.75 trillion.

However, Morningstar also acknowledges that multiple factors may support SpaceX's stock price remaining strong in the short term following the IPO, including a smaller initial public float, participation of almost every major investment bank in underwriting, and investors' heightened enthusiasm for demand in AI infrastructure.

Additionally, SpaceX is expected to be included in the Nasdaq 100 index just 15 trading days after its IPO, an unprecedented speed in history.

Morningstar states that even so, investors may have an opportunity to enter at more attractive prices after the IPO.