Elon Musk has never been one for conventional finance. His latest gambit, a secondary share sale that could value SpaceX at over $200 billion, has London’s private wealth managers sharpening their pencils. For a company that famously refuses to go public, this is as close as retail investors will get to a piece of the Mars-bound empire. But as with any Musk venture, the fine print matters.
Market chatter suggests that SpaceX is offering existing employees the chance to sell shares at a price that would value the firm at roughly $210 billion. That is a significant uptick from the $180 billion valuation in the last round. For context, that would make SpaceX more valuable than Goldman Sachs or even the entire FTSE 100’s aerospace and defence sector combined. The question is not whether there is demand but whether the pricing reflects reality or hype.
British institutions are circling. The allure of SpaceX is undeniable: a near-monopoly on commercial satellite launches, a Starlink constellation that is already generating cash, and a vision that captures the imagination. But the prospectus, if one can call the whispered terms that, holds risks. SpaceX remains a private company, answerable to no public market committee. Its financials are opaque, its revenue streams reliant on government contracts and fickle telecoms markets. The secondary sale does not trigger the full disclosure requirements of a London listing.
Let us talk about valuations. At 200 billion, SpaceX is trading at roughly 40 times forward earnings, if we take Musk’s own projections at face value. That is a multiple that would make even the most optimistic tech analyst blush. Compare that to BAE Systems, trading at around 15 times earnings. Yes, SpaceX has growth, but space is expensive. The Starship program has cost billions and is still not commercially operational. Starlink needs constant capital for satellite replenishment. And there is the small matter of Musk’s attention being pulled in a dozen different directions.
Capital flight from London’s equity markets has been a persistent theme. The UK’s listings regime is struggling to retain high-growth names. Yet here, British investors are not buying a London listing; they are buying into a US private placement. That means currency risk, regulatory risk, and the possibility that the shares they hold are illiquid for years. The exit strategy is not clear.
Gilt yields have been volatile, and the Bank of England’s path on inflation remains uncertain. For high-net-worth individuals, a stake in SpaceX offers a hedge against fiat currency debasement. They see it as digital gold with rocket thrusters. But gold does not require billions in R & D every quarter.
Musk has hinted that a public offering is not on the horizon. That suits him: no quarterly earnings calls, no activist investors, no prying questions about Twitter. But for the British investors piling in, they are essentially buying into a black box. They trust Musk’s vision, but trust is a fragile basis for a portfolio allocation.
The secondary sale could break records, as the title suggests. It could also be the top of the market for space valuations. If Starlink fails to hit its subscriber targets or if Starship suffers a catastrophic failure, those shares could become very expensive souvenirs.
For now, the City is watching. Some family offices are placing bids, others are staying on the sidelines. The prudent approach is to treat SpaceX as a venture capital play, not a blue-chip equity. And venture capital, by definition, carries a high failure rate.
As I have said before in this column, when the crowd rushes in, it is time to check your seatbelt. Musk has broken many rules, but gravity and financial gravity are stubborn forces. British investors would do well to remember that.
