SpaceX IPO: Everything You Need to Know

Added: 2026-06-01

[00:00:00]It's finally happening. SpaceX has officially filed for the biggest IPO in stock market history, aiming for a staggering $2 trillion valuation this June under the ticker symbol SPCX.

[00:00:12]But, if you think this is a pure play on satellites and rockets, you need to read the fine print of the S1. Today, we're looking at five massive warning signs straight out of this SEC filing. We're going to break down the brutal risk-reward, and is the stock actually worth buying? To help me out here, I brought in Lou >> Leightman. Lou, thanks for joining me.

[00:00:31]>> Always glad to be here, Travis.

[00:00:32]>> All right, let's start with the biggest thing that I think probably surprises a lot of investors, and that is that SpaceX is not actually profitable despite potentially being a $2 trillion company.

[00:00:44]>> Not profitable and likely won't be there for a while. And it's not because they're not generating revenue. They generated $18.7 billion in revenue last year, but the company still posted a massive $4.9 billion net loss in 2025.

[00:00:58]That only accelerated in the first 3 months of this year, first quarter 2026, $4.28 billion loss in just 3 months. If you're buying the stock looking for a profit powerhouse, look elsewhere.

[00:01:10]They're burning cash faster than rocket fuel. A lot of that is that AI.

[00:01:14]>> Yeah, what is driving those losses?

[00:01:17]Because there's different segments of the business, there's the rocket business, there's Starlink, and then there's this xAI that they folded in where it was just a few months ago.

[00:01:26]Where's the Where are the big losses coming from?

[00:01:28]>> Yeah, so it's no surprise they added AI and the losses ballooned. We know what's going on with the hyperscalers. They're actually spending less than the hyperscalers, but look, here's the scary thing about that AI business, Travis.

[00:01:39]They would have lost money without CapEx. They would have lost money just revenue versus cost. So, you throw in a couple billion dollars in CapEx, this that AI is the center of the the I don't know, the black hole that's sucking in all the revenue right now.

[00:01:54]>> Now, is that going to potentially change? We have heard about this deal they have with Anthropic. I think it's 1.25 billion dollars or thereabouts.

[00:02:02]Every month they're going to be paying to rent Colossus 1. I think the reports are were that, you know, the data from this from this S1, that was coming from a time when Colossus was underutilized and that was, you know, serving things like Grok, but it was potentially only operating at about 11% capacity. This could bring that to a higher capacity, also generate more revenue. So, is that something we're going to at least see later on this year?

[00:02:25]>> It'll help, right? But I mean, simple math. If they're getting 1.25 billion a month, a quarter is 3 months and they lost almost 5 billion dollars. It's not going to entirely do it. I think maybe ramping that and kind of improving that plus all of the spending they have to do on Grok or what they cuz look, most of the total addressable market they see is also AI. So, it's not like they can stop spending cuz Anthropic is using it. I don't think this makes the problem go away, but yes, it will be shifting in the months to come.

[00:02:52]>> Now, the reality of investing in an Elon Musk company is that you're really investing in Elon Musk. This is going to be now a publicly traded company, which means that we investors can buy a piece of the company, but what are we actually getting?

[00:03:04]>> Yeah, so it was implied with Tesla forever. SpaceX, it is they're just coming out and saying it. The S1 says Elon Musk controls 85.1% of voting power. That's it. He owns over 95% of a special class B super voting share. If you read the fine print, you can only replace the CEO or the chairman Elon it with more than half of the vote of that class B shares. So, Travis, you do the math here.

[00:03:32]Elon is the chairman and CEO. You can only replace Elon if more than half of the class B shares vote for it and Elon owns 96% of those shares. So, unless Elon decides to vote himself out, he cannot be replaced by shareholders. If you are buying SpaceX, you you going along for the ride. You are being the back of that rocket. You're hoping it's going up because you were not in the cockpit.

[00:03:56]>> So, corporate governance, something that we talk about periodically, and something that normal that investors should be thinking about, that is essentially non-existent in this case.

[00:04:05]>> Basically.

[00:04:05]>> Yeah, this is Elon's show.

[00:04:07]>> All right, let's talk about Starlink because I think there's a lot of investors who thought this was really going to be the driver of the business.

[00:04:13]AI is definitely taking over when you look at, you know, the revenue and losses and and even the market potential total addressable market they've talked about, but Starlink is the profit center, it seems like.

[00:04:22]>> Well, it is still driving the business.

[00:04:24]It was 61% of total revenue, 11.4 billion total. Operating margins are really strong. It's actually profitable.

[00:04:30]This is the connectivity business. We'll see how long that lasts because Amazon is coming on. There are other competitors. One thing I'd watch here though, we know they lowered prices and sure enough top line growth is still slowing a bit and operating margins are deteriorating. I think that's at least designed to be temporary. They've talked about raising prices, but it is very expensive to launch satellites in space.

[00:04:54]The whole way this business works is a huge, huge, huge constellation of basically disposable satellites. We're not talking about really, really tough, big things. There's a constant replacement cost, so the unit economics matter. They have wiggle room because this is profitable to make it more cost competitive and try and build the business, but not unlimited wiggle room and competing against terrestrial, it's a lot cheaper to put up a tower than it is a satellite. This is the crown jewel of the business, but it also still deserves to be watched.

[00:05:23]>> Is this where we're going to potentially see those data centers in space that we've heard so much about, you know, and we don't know exactly what that's going to look like, but it seems like the the kind of consensus is now this these aren't going to be giant buildings that we're throwing up into space. These are potentially going to be these smaller satellites just with a a GPU rack inside of them and we're going to kind of connect to them uh through start something like Starlink.

[00:05:48]Is that the right way to think about the potential optionality for Starlink?

[00:05:52]>> I think that yeah, that that's how I think of it. I don't know if I would invest based on it. I think there's a lot to be figured out there, but I don't think the big data centers make sense with what we know of physics right now about heat transfer and vacuum, all of these hard questions that you have to answer. So yeah, if that's going to happen, it's going to more look more like this and if it's cost competitive, kind of still waiting to even see on that.

[00:06:14]>> Could be another case where I think FSD was supposed to be driving us across the country a decade ago. We're still at the point where it's not fully autonomous even with the robo taxis that we have today. Let's talk about the >> time frame, Travis, right? On a long enough time frame.

[00:06:28]>> Let's talk about the balance sheet. This is something we don't necessarily think about as being an issue for companies that are newly IPOing, companies that have a trillion-dollar valuation, but they're in a little bit different case.

[00:06:39]>> This was the biggest surprise for me.

[00:06:41]SpaceX has $29 billion in debt. Now, most of that is tied to the XAI deal.

[00:06:47]XAI, kind of because of Twitter, all of that legacy right there, they were sitting on $20 or so in really, really high high-interest debt, debt you didn't want.

[00:07:00]SpaceX refinanced that with a bridge loan of about $20 billion. They have to repay that. In terms of the loan is, that's where a lot of these IPO proceeds are going to go. The interesting thing here is is that SpaceX does have a cash consuming AI business. They have a lot of investment in the space side.

[00:07:18]Starship has already cost $15 billion.

[00:07:21]It was supposed to cost five, and they still have work to do there. The idea of an IPO is you raise cash to invest in the business. They're still going to have leftover to do that, but I think it would surprise a lot of investors that 20 billion of what they raised is basically going to go out the door to bankers right away.

[00:07:36]>> Is it possible that they're just going to continue issuing shares to raise money for funding some of these operations? I mean, if you have that kind of evaluation, raising 10 or 20 billion dollars here or there doesn't actually dilute you all that much.

[00:07:49]>> No, no, I think that's very possible.

[00:07:50]There's a couple of questions though.

[00:07:51]Much of the existing shareholder base is going to sell out and if so, what does that do to the to the share count? That could limit you. But yeah, I think naturally on a lot of growth companies, the reason they go public is to have access to capital markets. I would assume SpaceX would take take advantage of that and definitely if I was to investing here, I wouldn't assume that the day one share count is going to be your share count forever.

[00:08:14]>> One of the things that I have often heard is that SpaceX is a launch monopoly. Is that true?

[00:08:20]>> Not really though. Okay, look, they are a dominant force in launch. Maybe 80% of the total gross weight that we're taking into space. It's That's a better way to look at it because you could fire off a million tiny rockets and say we, you know, we lead in rockets, but how much weight are you actually putting in?

[00:08:36]About 80% of what goes up there is via SpaceX. And they they have the Falcon Heavy, they kind of dominate the most important launches, but if you look under the hood, a vast majority of these Falcon 9 launches, they aren't for external clients who are paying them.

[00:08:51]They are being used for Starlink. And again, Starlink just has a massive need for launch and massive need for capacity. They're essentially getting that at cost, which helps Starlink and it helps build the business. This is not the revenue center, profit center that perhaps you'd think it would be with 80% market share because again, most of that is just staying in house.

[00:09:13]>> All right, I want to answer I want you to answer whether this is an IPO you're looking at in just a minute. But first, if you're interested in this space economy, what alternatives do you have for SpaceX and this IPO? What exists out there today for investors?

[00:09:27]>> Let's start with the easy one and you I'm I'm going to steal from you here, Travis, cuz you literally called this the easy button for so many of these tech trends and I think you're right.

[00:09:35]Alphabet. Google was an early investor in SpaceX. They have 7 or 8% so it's going to be I don't know, worth 60 billion or so when it comes out. Buying Google gives you a diversified set of bets. Obviously, you have that massive AI business, you have the core search business, you have Waymo, you have so much. You also get access to SpaceX and all and all they might do. You can't go wrong with buying Alphabet. It's boring, but it's safe.

[00:09:59]>> Yeah, I agree. And the the strange thing with Alphabet in this space right now with all these companies that are getting so much hype for potentially disrupting their business is Alphabet actually owns a big chunk of a bunch of them. SpaceX is one of them. Anthropic is another.

[00:10:14]They own a round 14% of Anthropic. I think they participated in their recent round that was announced today as we're recording. So, it is just sort of the easy button with all of these things. It seems like they're the one with the cash. When somebody needs some cash when one of one of these huge startups needs a you know, 10 or 20 billion dollar check, there's Alphabet for you. What else should investors be looking at?

[00:10:34]>> Yeah, let's look at more fun things.

[00:10:36]Less easy maybe, but Rocket Lab, everybody knows the name now, RKLB. This is actually my preferred space stock. I I don't want to I don't want to spoil anything about whether or not I'm buying SpaceX, but with Rocket Lab, you have a nice launch business. And Travis, I can't say enough. We don't have enough people able or enough businesses able to reliably get things into space right now, especially because Starlink is taking so much SpaceX capacity, ability, that that proven ability to get into space. That makes Rocket Lab a winner right there. You throw in the fact that they are trying to be a one-stop shop.

[00:11:10]They will design the satellite for you.

[00:11:11]They will build it. They will launch it and then they will maintain it. If we are going to build out a commercial space economy, all of these businesses that aren't involved in aerospace, they don't want to hire a bunch of rocket scientists. They want to go to one vendor who can do this for them. Rocket Lab has the model that I think works here. It's actually a more diversified space business than SpaceX. The other one I'd throw out there, much more speculative, Redwire or RDW. They are the space infrastructure company. They make a lot of components you need. They are very much tied to SpaceX. SpaceX is trying to get the Starship up. Starship is going to be the biggest rocket we have. A lot of the projects that Redwire stands to gain from need the Starship to work out. These huge solar panel arrays that they make, some of these other just components that they make, a lot of their book of business, a lot of their future business, assumes that Starlink will be functioning and able to get into space. So, if you want to kind of invest in Star SpaceX as a success, but you don't want to buy SpaceX, Redwire is kind of tied to it as far as their their fortunes go.

[00:12:23]>> All right, let's both answer the big question of the day. Are you going to be buying this SpaceX IPO?

[00:12:30]Uh and we'll say the IPO price or up to this two trillion dollar number that they're kind of looking at. That 1.25 to to two trillion dollar number once you Now that you've seen the S1, is this an interesting investment for you?

[00:12:42]>> So, I'm going to talk out of both sides of my mouth. I fully suc- expect this IPO to be a success. And if you ask me, I expect the price to be higher two months following the IPO than I do direc- on the day of. I do think it's going to be a good IPO. That said, IPOs scare me in general. We're seeing the best picture of the company it put out there. The AI business / Albatross, I think they can make that work, but that scares me. I really like Rocket Lab as a better set of space assets without the AI. And it's just as overvalued, arguably, for now, so you're not really getting a discount, but I would rather just keep my money in Rocket Lab and not buy the SpaceX IPO for my money.

[00:13:22]>> Yeah, and I'm going to sit in the same boat. I think this is it's being compared to Tesla, very different than Tesla. Tesla came public as I think it was a one and a half billion dollar market cap. The upside was while the company was public. With SpaceX, that upside has been realized while the company was private. I think the price to sales multiple is somewhere around 100 X. Uh that is a huge price to sales multiple even for a company that's growing significantly. But for a company that's growing unprofitably like SpaceX is where you have these potential money-losing businesses like artificial intelligence, just too many questions for me as an investor right now. I think there are better values out there. What do you think about the IPO of SpaceX?

[00:14:05]Does Elon's 85% voting stake scare you away? Are you buying it after the company IPOs? Let us know your thoughts on SpaceX in the comments section below.

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