Elon Musk is preparing to list shares of SpaceX on the London Stock Exchange, a move that would be the largest and most unconventional initial public offering in the Square Mile’s history. The decision, according to sources familiar with the matter, follows months of private meetings between SpaceX executives and UK Treasury officials. The listing would value the private rocket company at over $200bn, making it the largest company ever to debut on the LSE.
For the City of London, the listing represents a high-risk opportunity to cement its status as a global financial hub post-Brexit. The LSE has struggled to attract large tech listings, losing Arm Holdings to New York and seeing many fintech companies choose Amsterdam or Frankfurt. A SpaceX IPO would be a coup for Chancellor Jeremy Hunt, who has lobbied Musk personally.
However, the risks are substantial. SpaceX is a highly leveraged company with significant debt and an unpredictable revenue stream. Its Starlink satellite internet division is not yet profitable, and the company’s valuation is largely speculative, based on future contracts for space launches and potential Mars missions. Investors would be buying into a company whose CEO is known for erratic behaviour and controversial statements.
The listing structure is also unconventional. SpaceX plans to issue shares with multiple voting rights, giving Musk and his inner circle control even after the IPO. This is a model that has fallen out of favour with institutional investors in London, who prefer equal voting rights. The FCA may need to grant waivers for the listing rules.
Moreover, the timing is precarious. Global interest rates are rising, and tech stocks have been hammered. The IPO market in London is at a decade low. SpaceX would need to price its shares attractively to lure investors, but Musk is known for demanding high valuations.
If successful, the listing would inject billions into the London market and attract other tech giants. If it fails, it could tarnish the LSE’s reputation and leave investors nursing heavy losses. The City is holding its breath as Musk plays his biggest gamble yet.
