Elon Musk’s SpaceX is reportedly preparing for a stock market listing that could value the company at over $200 billion. For British investors, this is the ultimate high-risk, high-reward proposition. The City is watching closely, but with characteristic scepticism. Musk’s track record with Tesla has been a wild ride: staggering returns punctuated by volatility that would make a gilt-edged bond look like a sedative. But SpaceX is a different beast. It is not selling electric cars; it is selling the dream of interplanetary travel. And that dream comes with a price tag that would make the Treasury blanch.
The proposed IPO would be the largest in history, dwarfing even the flotation of Alibaba. But the fundamentals are murky. SpaceX’s revenue streams are largely tied to government contracts and Starlink internet subscriptions. Starlink is promising, but it is still burning cash at a rate that would make a central banker weep. Gilt yields are already rising, and the Bank of England is watching inflation like a hawk. In this environment, pouring billions into a company that has yet to turn a consistent profit feels like a gamble on par with betting against the pound.
Capital flight is a real concern. British pension funds, already under pressure from low yields and regulatory costs, may be tempted to chase SpaceX’s potential returns. But if the market turns sour, the fallout could be severe. Musk’s companies have a history of defying gravity, but gravity always wins eventually. For the prudent British investor, the safest bet might be to watch from the sidelines as the rocket launches. After all, in the City we know that what goes up must come down. And the higher the valuation, the harder the fall.
