Honolulu Star Bulletin - Norm-breaking SpaceX IPO a source of elation, angst on Wall Street

With the company set to stop taking investor orders Wednesday and pricing set for Thursday, the world's most anticipated initial public offering (IPO) is hurtling toward its expected Nasdaq debut on Friday.

"Demand seems to be shaping up pretty well," Renaissance Capital's Matthew Kennedy said of the transaction that aims to raise $75 billion in what would be a record-breaking IPO.

"No question that there is a ton of hype around it. Nothing captures the imagination like space," which is why the stock "has generated excitement in ways that few other stocks can," Kennedy added.

The company -- which builds rockets, provides satellite internet through its Starlink network, and recently merged with Musk's artificial intelligence firm xAI -- will offer more than 555 million shares at an expected $135, placing SpaceX among Wall Street's most elite companies with a valuation of around $1.8 trillion.

That valuation -- and the IPO's success -- rest squarely on investors' faith in Musk as a visionary entrepreneur. After the offering, the tech multi-billionaire will hold more than 82 percent of the voting power, cementing his grip on one of the world's most valuable companies.

And amid reports that demand is exceeding already elevated expectations, the launch price could still move higher.

"We've seen exceptional excitement, unlike everything else we've heard before when it comes to IPOs," said Eva Ardos, chief investment strategist at ERShares, which holds a stake in SpaceX through a special-purpose private fund.

For Kim Forrest of Bokeh Capital Partners, SpaceX embodies a "cool" factor thanks to Musk's marketing savvy.

Around one-third of the shares will be set aside for everyday investors -- of which many are die-hard believers in Musk -- a far larger slice than a typical IPO offers.

- Destroyer of capital? -

While SpaceX's debut has generated great buzz, there are also questions about whether Musk's promise of putting data centers in space and sending rockets to Mars will actually materialize and deliver profit.

The company's Starlink internet service looks like a safe bet to make money, analysts say.

But SpaceX's massive spending on cutting-edge artificial intelligence is expected to bleed money -- at least for several years.

"SpaceX is probably not something that will ever end up in my portfolios," Forrest said.

The numbers tell a complicated story: SpaceX brought in $18.7 billion in revenue in 2025, up 33 percent from the year before -- but it still lost $4.9 billion.

Research firm Morningstar looked at SpaceX's actual business and concluded it should be worth around $780 billion -- less than half the $1.8 trillion Musk is seeking.

Trade Nation's David Morrison put the central question bluntly: "Is this true democratization, the likes of which have never been seen on Wall Street before? Or is it a cynical attempt to unload an extraordinarily expensive and highly speculative venture on a gullible public?"

- IPO barometer -

Despite the risks, analysts pointed to recent multi-billion-dollar AI computing deals SpaceX signed with Google and AI company Anthropic as reasons to think the valuation could hold up.

"If people are willing to pay that price and invest for the future, that's a good sign for the market," said Peter Cardillo of Spartan Capital Securities.

How SpaceX performs could also set the stage for highly anticipated IPOs by AI companies Anthropic and OpenAI, which have generated their own enormous buzz on Wall Street.

"This has a real possibility of chilling IPO issuance if (SpaceX) performs poorly, or kicking off a new IPO rebound if it trades well," Kennedy said.

F.Kawika--HStB