SpaceX has finally filed for its long-awaited IPO, and the City is buzzing. But before you rush to buy shares in Elon Musk's rocket venture, let me offer three cold, hard truths for the British investor. First, the valuation is a moonshot.
Reports suggest a target of $250 billion, which would place SpaceX among the largest companies on Earth despite revenues of only a few billion. That implies a price-to-sales ratio beyond the stratosphere: over 50 times, compared to Boeing's 1.6 times.
The narrative is seductive, but the numbers are speculative. Second, the UK tax implications sting. Unlike US investors, Britons face a 1% stamp duty reserve tax on purchases of foreign shares, plus potential CGT on gains.
And with no EIS relief for a mature company like SpaceX, the government takes its cut. Third, central bank policy complicates the launch. The Bank of England's path to normalising interest rates makes risky assets like SpaceX less attractive.
With five-year gilt yields at 3.9%, a safe return is no longer negligible. Capital flight is a real risk: if the BOE stays hawkish, UK pension funds may steer clear of volatile space stocks.
In short, the headline is exciting, but the maths is sobering. This column is not financial advice, but I'd suggest reading the prospectus twice before clicking buy.
