SpaceX IPO is overvalued at $1.75 trillion - investors should wait
Source: Oren Etzioni. "Opinion: SpaceX is no Tesla – GeekWire." June 12, 2026. www.geekwire.com
The Gist
The author argues that SpaceX's IPO is way too expensive at $1.75 trillion because it's a completely different situation from Tesla's cheap IPO years ago. He says the company loses money, the stock price is artificially inflated, and investors are betting on too many risky things at once.
Conclusion
SpaceX at its $1.75 trillion IPO valuation is overpriced and investors should avoid buying at this level
Premises
- SpaceX's $1.75 trillion valuation is roughly 1,000 times larger than Tesla's $1.7 billion IPO valuation, making the investment dynamics fundamentally different
- Historical data shows unprofitable companies that go public underperform the market by 30% over three years, and SpaceX lost $4.94 billion last year
- The IPO structure is engineered for artificial scarcity with only 4% float, staggered lockup releases, and forced index buying, not genuine price discovery
- At 94 times trailing revenue, SpaceX would need to achieve over $1 trillion in revenue and hundreds of billions in profit to justify its valuation
- The valuation requires three simultaneous bets to succeed: Starlink becoming a SaaS giant, Starship reaching commercial cadence, and xAI competing with OpenAI/Google
- Musk retains 85% voting control, giving public shareholders economic interest but no governance rights in a $1.75 trillion company with a CEO running multiple operations
Assumptions
- Historical patterns of IPO performance for unprofitable companies will apply to SpaceX
- Tesla's success was primarily due to its low starting valuation rather than Musk's leadership
- Retail investors are unconsciously applying Tesla-era investment rules to a fundamentally different situation
- The three business segments (Starlink, Starship, xAI) are unlikely to all succeed simultaneously at projected levels
- Governance structure matters significantly for public market valuations