The news that SpaceX, Elon Musk’s private rocket juggernaut, is considering a market listing has sent ripples through the City. And whispers are already circulating that London could be the venue. After Brexit, the government has been desperate to brand the UK as a tech-friendly haven. A SpaceX listing would be the ultimate prize. But let’s not get carried away. The bottom line is cash. And markets are efficient. They know a good bet when they see one.
First, the numbers. SpaceX is reportedly valued at around $180 billion. That is more than the entire FTSE 100 tech sector combined. To put it in perspective, ARM Holdings, Britain’s homegrown tech darling, was valued at £42 billion when SoftBank bought it. A SpaceX listing would be a beast of a different order. The liquidity alone would dwarf anything London has seen since the glory days of the tech bubble.
The government, naturally, is salivating. They see it as a statement: London is open for business. But history teaches us to be cautious. After the Brexit vote, there was a surge in capital flight. The pound fell. Gilt yields wobbled. And yet, the UK’s financial services sector adapted. The question is whether we can attract the sort of high-growth, volatile tech listings that typically go to New York.
The problem is incentives. The UK’s tax regime is not favourable for founders. The capital gains tax is high compared to Singapore or Dubai. And the regulatory environment is still catching up. Musk is a libertarian at heart. He will list where he gets the best deal. And if that means going to the US, he will. The SEC is not exactly a walk in the park, but the depth of US capital markets is unmatched.
But there is a counterpoint. The UK has a strong tradition of institutional investment. Pension funds, insurance companies, sovereign wealth funds. They are looking for long-term yields. SpaceX, with its monopoly on commercial satellite launches and its Starlink internet constellation, offers a rare opportunity to invest in hard assets with real revenue. That is something the City understands. It is not just hype. It is a business.
The risk, however, is that listing in London might not provide the liquidity that a company of that size needs. The average daily trading volume on the LSE is a fraction of the NYSE. For a stock that will be heavily traded, that could lead to volatility. And volatility is something Musk welcomes. He thrives on chaos. But for institutional investors, it is a headache.
Then there is the political angle. The government has been pushing for more tech listings. They relaxed the rules on dual-class share structures to attract founders like Musk. He already has that with Tesla. He likes control. That is fine. But what about the governance? The UK has strict rules on board independence. Musk has a history of ignoring boards. That could be a sticking point.
Let’s also consider the macroeconomic backdrop. Inflation is still sticky at 4%. The Bank of England is reluctant to cut rates. Gilt yields are elevated. That means the cost of capital is high. A tech company like SpaceX, which requires massive upfront investment, will feel that cost. It might delay the listing. But then again, Musk is a master of timing. He will list when the market is hungry.
In conclusion, a SpaceX listing in London would be a huge win for the UK. It would send a signal that we are a destination for cutting-edge technology. But it is not a panacea. The government needs to get its fiscal house in order. Lower taxes, smarter regulation, and a stable currency. Otherwise, the capital will fly elsewhere. And the City will be left watching from the sidelines. Again.
