The impending Initial Public Offering (IPO) of Elon Musk's SpaceX is poised to shatter records, with a projected valuation of £1.4 trillion set to eclipse the previous mark held by Saudi Aramco in 2019. A staggering $75 billion worth of shares will be offered to investors on the US stock market this Friday, with bids exceeding $250 billion already reported to have been received, three to four times oversubscribed.
Despite the enthusiasm surrounding this enormous offering, concerns over overvaluation are growing. Investment research group Morningstar has calculated SpaceX's worth at a relatively modest £63 per share, significantly lower than the anticipated IPO price of £135. This discrepancy highlights a "major disconnect between market expectations and underlying fundamentals," particularly regarding the speculative nature of the AI business within SpaceX's valuation.
SpaceX, which reported a net loss of £3.8 billion in 2025, comprises three core divisions: space exploration (including Falcon and Starship rockets), connectivity (via its Starlink satellite constellation), and artificial intelligence through its xAI division. The projected IPO valuation represents approximately 92 times its trailing sales, indicating that investors are placing a substantial bet on Musk's long-term ambitions.
US Senator Elizabeth Warren has expressed concerns about the company's valuation and corporate governance, urging the Securities and Exchange Commission to delay SpaceX's IPO. She highlighted the "unprecedented threats to investor protection and market integrity posed by the biggest IPO in history," advocating for a delay in the registration statement's effectiveness.
The inclusion of SpaceX in major global stock market indices could have significant ripple effects on UK investors and the broader market. Index provider MSCI has confirmed it will apply existing rules for early inclusion of large IPOs in its Global Standard Indexes, potentially paving the way for SpaceX to join. This would generate demand from passively managed investment funds that track these indices, including many accessible to UK savers and pension funds.
The Bank of England is likely to be closely monitoring global market stability, particularly with regards to this enormous IPO and valuation concerns. While the inclusion of SpaceX in key indices may have significant implications for market sentiment, Nasdaq has made changes to facilitate new listings, while S&P Dow Jones Indices has maintained stricter entry rules, potentially delaying SpaceX's inclusion in the tech-heavy S&P 500 index for several months.