SpaceX IPO: Valuation Gap and Future Projects Spark Investor Caution

SpaceX is poised to launch one of the most talked‑about initial public offerings of the decade, with a target valuation of $1.75 trillion. However, Morningstar analyst Nicholas Owens argues the company’s true worth sits closer to $780 billion—about 55 % below the IPO target—suggesting investors might find a better entry point later.

The launch company’s strength lies in its robust launch business and the rapid expansion of its Starlink satellite‑internet arm. Starlink’s revenue grew 50 % year‑over‑year, yet SpaceX remains unprofitable, posting a $4.95 billion net loss last year largely due to heavy spending on artificial‑intelligence initiatives.

If the $1.75 trillion valuation materialised, SpaceX would rank as the seventh‑largest U.S. company by market cap, but only the 200th by revenue. Analysts note that much of the valuation is built on future bets—particularly the company’s ambitious orbital data‑center project and Elon Musk’s reputation for disruptive innovation.

The June 12 IPO will see SpaceX offer just 3 % of its shares to the public, priced at $135 per share. A small float, coupled with a recent rule change that will allow the company to join the Nasdaq‑100 shortly after pricing, is expected to lift demand and push the share price higher.

Owens labels the shares "overvalued in almost any scenario, at least in the near term," and recommends that savvy investors wait until the first quarter of 2025, when insiders and early shareholders can begin selling.

Musk has pledged not to sell more than 40 % of his stake for a year after the IPO. Unlike the typical 180‑day lock‑up, SpaceX’s prospectus allows early investors to liquidate 20 % of their holdings weeks after the first quarterly earnings report. An additional 10 % can be sold if the stock trades 30 % above the IPO price for at least five of the ten trading days following that report.

These provisions could flood the market with shares from early backers looking to realise gains, adding another layer of volatility to an already highly anticipated debut.