5 things to know before buying SpaceX IPO

The upcoming SpaceX IPO on June 12 is shaping up to be one of the most closely watched stock market events in recent history. 

Elon Musk’s aerospace company is reportedly seeking to raise up to $75 billion in what could become the largest initial public offering ever, surpassing previous records and drawing attention from both institutional and retail investors.

As anticipation builds around the listing, investors are looking for answers to key questions, including when the SpaceX IPO will launch, how the company is valued, and whether the business justifies its lofty expectations. 

Here are five important things to know before considering an investment.

1. SpaceX is going public to fund ambitious expansion

Despite generating substantial cash flow from its Starlink satellite internet business, SpaceX is seeking fresh capital to fund a wide range of expansion projects.

According to the SpaceX IPO prospectus, proceeds from the offering are expected to support investments in artificial intelligence infrastructure, satellite networks, rocket development, and broader space operations. 

The company's acquisition of xAI earlier this year has also increased its funding requirements, as AI development requires significant spending on data centres and computing power.

The IPO will provide SpaceX with direct access to public markets, potentially making it easier to raise capital in the future as it pursues long-term projects that could take years to become profitable.

2. The company is no longer just a space business

Investors considering the IPO should recognise that SpaceX has evolved into a much broader company than a traditional aerospace manufacturer.

In addition to its launch services business, SpaceX owns Starlink, one of the world's largest satellite internet networks. 

Following its acquisition of xAI, the company also controls Grok, an artificial intelligence platform. 

Musk's social media platform X is also part of the broader ecosystem.

This diversification creates both opportunities and risks. 

Supporters argue that combining space, communications, and AI businesses could create powerful synergies. 

Critics, however, point out that some of these operations remain unprofitable and may require substantial future investment.

As a result, buying SpaceX shares may increasingly represent a bet on AI as much as on rockets and satellites.

3. SpaceX valuation is one of the biggest questions

Perhaps the most debated aspect of the offering is the proposed valuation of SpaceX.

Reports suggest the company could seek a valuation of at least $1.8 trillion, placing it among the world's most valuable publicly traded companies from the moment it lists. 

Such a figure would imply a massive SpaceX market cap that rivals some of the largest technology firms globally.

Supporters argue that SpaceX's leadership in commercial space launches, Starlink's growth potential, and future AI opportunities justify a premium valuation. 

Skeptics contend that investors may be paying today for profits that could be years away.

For investors, the key question is whether future earnings growth can support the proposed SpaceX valuation once public market scrutiny begins. 

The answer may ultimately determine how the stock performs after listing.

4. The numbers need a closer look

The SpaceX IPO prospectus provides investors with their first detailed look at the company's finances.

According to the filing, SpaceX generated approximately $18.7 billion in revenue last year. 

However, the company also reported significant losses, largely due to investments in its AI operations following the xAI merger.

While SpaceX revenue continues to grow, profitability remains a challenge. 

The AI division reportedly lost billions of dollars as it expanded computing infrastructure and developed new products.

Investors should therefore look beyond headline SpaceX revenue figures and examine how much spending is required to support future growth. 

Revenue growth can be attractive, but long-term shareholder returns often depend on a company's ability to generate sustainable profits.

Reviewing the SpaceX IPO prospectus carefully may help investors better understand these trade-offs before making an investment decision.

5. Why should retail investors stay cautious? 

One notable aspect of the offering is that retail investors may receive greater access than is typical in large IPOs.

Several brokerage platforms are expected to allow customers to participate directly in the offering process. 

However, demand is likely to exceed supply, meaning many investors may receive fewer shares than requested.

History also suggests caution. While IPOs often generate significant excitement, they can experience substantial volatility during their first weeks or months of trading.

Some companies have delivered strong long-term returns after rocky starts, while others have struggled to live up to early expectations.

Investors should consider how SpaceX fits into their overall portfolio rather than viewing the IPO as a guaranteed opportunity. 

Diversification and a long-term perspective remain important regardless of how attractive a company may appear.

What to do before investing? 

For investors wondering when is the SpaceX IPO, current reports indicate pricing could occur on June 11, with trading expected shortly afterwards. 

The offering represents a rare opportunity to invest directly in a company that has transformed both the commercial space industry and satellite communications.

However, the combination of an enormous SpaceX valuation, significant AI-related spending, and ambitious long-term projects means the investment case is far from straightforward.

Reading the SpaceX IPO prospectus, evaluating the company's financial performance, and assessing whether the projected SpaceX market cap is justified will be essential steps before deciding whether to participate in what could become the largest IPO in history.

The next major catalyst will be the launch of SpaceX's IPO roadshow and the announcement of its final pricing range, both of which could provide clearer insight into investor demand and the company's targeted valuation.

Read our in-depth guide to learn more about how to invest in SpaceX before its IPO.