The news hit the wires this morning: SpaceX is eyeing a public listing, and the UK stock market is already jostling for a piece of the action. As a City veteran who has seen tech IPOs come and go, I approach this with a mixture of excitement and scepticism. Let’s cut through the hype and look at the three things that really matter for investors.
First, valuation. SpaceX is currently valued at around $180 billion in private markets. That places it among the largest companies on Earth, yet it has only turned a profit in recent quarters thanks to Starlink revenues. The question is whether the market can sustain such a multiple when interest rates remain elevated. Gilt yields are still above 4%, and the cost of capital is not what it was in the zero-rate era. A frothy tech listing in this environment risks a correction. I recall the float of Deliveroo: a much-hyped debut that quickly soured when the macro winds shifted. SpaceX is a different beast, but the principle holds. Valuation must be anchored to cash flows, not dreams.
Second, the UK’s allure. The government has been courting tech listings with tax incentives and regulatory tweaks. The Edinburgh Reforms? A step forward, but not enough to offset the gravitational pull of New York. Capital flight from London is a real concern. Since Brexit, we have seen a steady drip of companies choosing the US for deeper liquidity and higher valuations. ARM’s decision to list in New York was a blow. If SpaceX chooses London, it would be a vote of confidence, but I suspect the company will opt for a dual listing or a primary listing in the US. The UK market needs to prove it can offer competitive terms. The Financial Conduct Authority’s efforts to loosen listing rules are welcome, but we must be wary of diluting standards. A race to the bottom benefits no one.
Third, the ripple effects. A SpaceX listing would be a catalyst for the wider space sector. UK-based firms like OneWeb and Surrey Satellite Technology could see a halo effect. But the real story is about fiscal responsibility. If the government offers tax breaks or sweeteners to secure the listing, we must ask: who pays? The taxpayer. In an era of high public debt and persistent inflation, every subsidy needs scrutiny. The Chancellor should focus on creating a stable macro environment: low inflation, sound money, and a competitive corporate tax regime. That would do more for the London Stock Exchange than any single IPO.
So, watch the valuation, watch the venue, and watch the fiscal implications. The market is always efficient in the long run. Hype fades; fundamentals endure. As I tell my colleagues: in a world of printing presses, the only true scarce resource is credibility.
