The City of London has its eyes fixed on the horizon, and what it sees is a rocket plume. Elon Musk’s SpaceX, the privately held colossus of commercial spaceflight, is reportedly preparing for a stock market debut that could be the most explosive initial public offering in history. But for the buttoned-down investors of the Square Mile, this is not just another tech IPO. It is a bet on a man, a vision, and a balance sheet that defies conventional analysis.
Let us be clear. SpaceX is not a company in the traditional sense. It is a venture capital project writ large, a machine that burns cash to achieve the impossible. Musk has already disrupted the automotive industry with Tesla, but Tesla at least sells cars. SpaceX sells launches, yes, but its ultimate goal is Mars. That is not a business plan. That is a manifesto.
The valuation being whispered in the canyons of Wall Street and echoed in Mayfair is eye-watering: north of $200 billion. For context, that would make SpaceX worth more than Boeing, Lockheed Martin, and Northrop Grumman combined. And yet, the company’s revenue is a fraction of those defence giants. This is not a stock. It is a lottery ticket with a rocket booster.
London investors are watching for several reasons. First, there is the gravitational pull of Musk’s personal brand. He has a cult following, and retail investors in the UK have shown a voracious appetite for his ventures. The Tesla story was a rollercoaster, but those who held on made fortunes. The question is whether SpaceX can replicate that magic in a public market that is increasingly sceptical of moon-shot promises.
Second, there is the macroeconomic backdrop. Inflation is sticky, gilt yields are rising, and the Bank of England is in a hawkish mood. In this environment, speculative assets are vulnerable. The IPO market has been moribund for months. A SpaceX listing would be a litmus test for risk appetite. If it flops, it could signal a broader retreat from growth stocks. If it succeeds, it could reignite the animal spirits that have been dormant since the tech wreck.
But here is the rub. SpaceX is not just any growth stock. It is a capital-intensive, high-risk, long-duration bet. The classic DCF model breaks down when your terminal value is a colony on Mars. Investors will have to rely on faith, and faith is a fickle mistress in a bear market.
Moreover, Musk has a history of over-promising and under-delivering on timelines. The Starship project, which is central to SpaceX’s long-term value, has faced delays and regulatory hurdles. The Federal Aviation Administration has been a persistent thorn. And then there is the competition. Blue Origin, Amazon’s Kuiper, and a host of Chinese state-backed players are vying for the same slice of the space economy.
For London institutions, the calculus is simple but brutal. The potential returns are astronomical, but so are the risks. A prudent allocation would be a tiny fraction of a portfolio, perhaps 1% or 2%. But even that could be too much if the market turns against Musk. Remember what happened to Tesla in 2022? The stock lost 65% of its value. SpaceX could be even more volatile.
There is also the question of governance. Musk is notoriously thin-skinned and mercurial. His Twitter takeover was a masterclass in chaos. Would public market investors want to tie their fortunes to a CEO who changes strategy on a whim? The SEC has already taken an interest. A public SpaceX would face scrutiny that the private version has escaped.
Yet, for all the cynicism, I must concede that SpaceX has achieved what many thought impossible: reusable rockets, commercial crew missions, and a global satellite internet network. The company’s technological edge is real. And in a world where government contracts are a steady source of revenue, the downside might be limited. The US Department of Defense is a loyal customer.
The bottom line is this. A SpaceX IPO would be the biggest gamble of Musk’s career, and it could reshape the London Stock Exchange’s appetite for tech. But investors should beware. The stock will trade on narrative, not numbers. And narratives can change in a heartbeat. As we say in the City, past performance is no guarantee of future results. Especially when the future involves Mars.
