Elon Musk is no stranger to high-stakes bets. From electric cars to reusable rockets and now his latest obsession with social media, the man has a habit of defying conventional wisdom. But his latest move — taking SpaceX public — might be his most audacious yet. And City investors are watching with a mixture of curiosity and scepticism.
For years, Musk has resisted the allure of public markets for SpaceX, preferring to keep the company private to focus on long-term goals without the tyranny of quarterly earnings. But whispers from Silicon Valley suggest that a flotation is now on the cards, perhaps as early as 2025. The valuation? It could top $150 billion, making it one of the largest IPOs in history.
At first glance, the logic seems impeccable. SpaceX has dominated the launch market with its Falcon 9 rockets, slashed costs and now has Starlink — a satellite internet constellation that promises to beam broadband to the global masses. Starlink alone could be worth a fortune. But the devil is in the details.
Let’s talk about the valuations. The private market has already priced in a narrative of perpetual growth. That is a dangerous game. Public markets are less forgiving of unfulfilled promises. If Starlink’s subscriber growth slows, or if rival constellations from Amazon or OneWeb gather pace, the sell-off could be brutal. And let’s not forget the regulatory headwinds. Spectrum rights, orbital slots and competition rules are a minefield.
Then there is the broader macroeconomic picture. Interest rates remain elevated in the United States, and the Federal Reserve shows no sign of cutting soon. That is bad news for high-growth stocks with no near-term profits. The market has already punished unprofitable tech companies; SpaceX, despite its revenue, is not exactly a cash cow. Its operating margins are thin, and the bulk of its capital is reinvested into R&D and Mars ambitions. That narrative might have flown in the zero-rate era, but not now.
And what about the man himself? Musk’s attention is increasingly diverted. His acquisition of Twitter (now X) has been a distraction and a financial drain. The Twitter saga has rattled investors worried that Musk’s focus is splintered. If SpaceX goes public, shareholders will want his undivided attention. They will also demand governance structures that ensure the company is run for all shareholders, not just its charismatic founder.
London investors are particularly attuned to these risks. The City has seen too many hyped tech listings go up in flames. Remember Deliveroo? Its IPO was a disaster. The public markets are not a cash machine; they demand discipline. And discipline is not Musk’s strongest suit.
Yet there is a counterargument. SpaceX has a product that works, a backlog of launch contracts and a technological lead that will take years to erode. Starlink could be the cash cow that funds the Mars mission. And Musk, for all his faults, has proved the doubters wrong before.
But the bottom line is simple. A SpaceX IPO would be a defining moment for Musk and for the markets. It would test whether the cult of personality can withstand the cold logic of quarterly earnings and analyst downgrades. For now, I am keeping my powder dry. The risk-reward equation does not add up — not at these valuations, not in this rate environment. Let the bulls have their fun. The real test will come when the first earnings miss hits the tape.
