SpaceX

This piece is a short rundown on SpaceX leading into their Initial Public Offering Friday June 12, 2026. A more in depth piece will be released Wednesday for those interested in a deeper dive.

After a brief hiatus, we’re back! This Friday, SpaceX will kick off a blockbuster year for Mega-Cap IPOs. It is important to conduct diligence on any company prior to making an investment decision. The following is a short snapshot of SpaceX heading into the IPO; a more in-depth piece will be available Wednesday.

The Company

What are you buying? SpaceX is currently broken into three companies, with limited synergies between these operating units.

Connectivity—Starlink—this is the cash machine that allows the rest of the business to function. It is also an incredible business. In 2025, the unit generated $11.4 Billion in revenue, 50% Year-over-Year growth, and an operating margin of roughly 40%. This has seen subscriber growth of 91-105% each of the last three years. In the simplest terms, this is a business unit with incredible growth and operating leverage that will enable it to reduce prices while maintaining high operating margins.

Space—The face of the business. While currently running at a loss, largely driven by R&D into the Starship project. In 2011, it cost $54,500/kilogram to transport anything into Low-Earth Orbit. Today, using the SpaceX Falcon 9, the cost is $2,720/kg. Starship in the near-term would cut that to $100-200/kg. This is an astronomical cost savings. This is where things get interesting. A large part of this is the development of reusable rockets.  One of the most remarkable things that I have ever watched is the clip below of SpaceX “catching” a rocket for the first time, a revolutionary feat for the future of the business of space.

xAI—The project. xAI which is composed of Grok, the Colossus Data Centers, and X (Formerly twitter.) Currently in a period of Cash burn, SpaceX notes this as their largest available market long-term. While AI lags behind some of the larger LLM’s (Anthropic’s Claude, OpenAI’s ChatGPT, and Google’s Gemini) Grok is the only major LLM with real-time, native access to the world’s largest public conversation platform — X. While rivals train on static web snapshots, Grok sees live news, trending discourse, and social signals the moment they happen. That’s not a feature. Musk calls it a structural moat.

The Future

The Future marketable opportunities are centered on the Starship program’s success. Further reductions in the cost of rocket travel open up a world of opportunity, as Elon has noted. First and foremost, Orbital Data Centers, whether driven by environmental concerns or concerns over the increasing cost of power at home, individuals in the U.S. have begun to push back against data centers. If SpaceX is able to execute its vision of orbital data centers, powered 24/7/365 by solar power, it would own a market that could scale over time significantly more efficiently than traditional data centers. To put this in perspective, the S-1 argues Earth’s AI power demand is already unsustainable — U.S. electricity grew less than 3% annually 2023–2025 while AI demand explodes. Space solar arrays generate 5× more energy per unit area (continuous illumination, no atmosphere). SpaceX frames this as the only truly scalable energy solution for the AI era.

Some other interesting opportunities that are noted in the S1 include, Orbital Manufacturing, Point-To-Point Earth travel (New York to Tokyo in an estimated 30-40 minutes) Passenger and cargo to the Moon, and Mars, space tourism, and Asteroid Mining for Rare-Earth-Minerals. These are all incredibly interesting opportunities but a bit longer term in scope, and less impactful to the immediate financial future of the firm.

The Structure

Only 5% of SpaceX will be available to trade on Friday, and in the Dual-Share-Class Structure, these will all be Class A shares, with 1 vote associated with each share. Class B shares will carry 10 votes per share, and with his holdings, Elon will control 85% of the voting power, effectively giving him total control. While this is generally not great for corporate governance, if you are investing in SpaceX you are to an extent investing in Elon and his vision, this is something you should be comfortable with prior to making an investment decision. Musk’s control can be viewed as a positive though, his vision would drive significant synergy over the long term, with total voting control he is able to work towards that rather than being concerned about quarterly earnings and proxy battles.

Valuation

The IPO comes at a unique time; Starship project success is not guaranteed, and the AI vertical is still burning cash at roughly $2.5 Billion a quarter. With roughly $18 Billion in revenue in 2025, and a valuation at IPO expected to be 1.77 trillion, putting its Price/Revenue at roughly 94x, that is an aggressive price that one would assume prices in many of the short to medium-term goals being accomplished on schedule and in line with budget. The IPO is projected to be oversubscribed, so trading should be expected to start above the $135/share. Expectations of its entrance into the Nasdaq 100 Index 15 days after the offering are also expected to push values higher, as many index-linked ETFs will be required to include SPCX in their Funds (per their Investment Mandates). This may be countered when insiders are able to start selling shares under the following schedule:

-First Tranche: Up to 20% of locked shares can be sold on the second full day of trading after the Q2 earnings release. An additional 10% unlocks if the stock trades 30% above the IPO price for five of the first 10 trading days after earnings.

-Rolling Tranches: An additional 7% of shares unlocks at 70, 90, 105, 120, and 135 days post-IPO.

-Post-Q3 Earnings: Another 28% of eligible pre-IPO shares become available to sell after the Q3 earnings report.

-Full Unlock: Any remaining restricted shares are completely released at the standard 180-day mark

Between hype and corporate finances, I’d expect volatility in the first few quarters of trading. This is a tremendous risk-reward balance, and I recommend conducting thorough research and evaluating how the risk profile would fit with your individual portfolio before making an investment decision. As noted we will have a more formal breakdown of the offering Wednesday, check back in if you are interested.

— John McKay, CFA

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