SpaceX Valuation
I came across a detailed valuation of SpaceX by Prof. Aswath Damodaran (the valuation guru at NYU Stern School of Business). It is a revistation of an initial valuation, attempted prior to the release of the IPO Prospectus.
Revisiting the SpaceX Valuation
As it is quite involved and I am not seriously considering investing in it, I asked my BA Claude to do a brief summary of the article, which I found helpful, so I thought to share here as several StrawPeople have indicated interest in this IPO.
Revisiting the SpaceX Valuation: A Post-prospectus update!
A summary by Claude.ai based on the full article posted on LinkedIn
Context
This is an update to his April 2026 pre-prospectus valuation, which had pegged SpaceX at roughly $1.2 trillion using leaked/unofficial data ($15.5bn revenue, $8bn EBITDA). With the 277-page prospectus (filed 20 May 2026) now public, he splits the update into a mechanical "data" refresh and a more consequential "story" revision. His overarching framing: for a young company, value is driven by total market size and unit economics — found mostly in the footnotes — not by the reported bottom line.
Data update (the mechanical part)
The financials largely confirmed his estimates rather than surprising him:
- Revenue ~$15.5bn (2025), growing about a third YoY. His launch and connectivity (Starlink) estimates were close; he had understated xAI revenue.
- Operating loss of $2.57bn (he'd estimated $2bn). With ~$2bn of previously-invisible interest expense, the net loss was ~$5bn. Stripping out R&D (which he argues should be capitalised) gives roughly $4bn of earnings before interest, tax and R&D.
- Balance sheet: book equity jumped to $41.3bn (from his $20bn guess) on the xAI acquisition; total debt incl. leases $22.9bn; cash $24.7bn — so net debt is −$1.9bn (net cash). He notes the debt is immaterial against a ~$1.2tn enterprise value anyway.
- Share count: prospectus reports a 12,535m basic share count (vs. his earlier back-out of 2,467m), excluding the IPO shares and still-redacted employee RSUs.
- IPO: estimated $75bn raised, held as cash for infrastructure investment (adds to firm value but not enterprise value).
- Governance: dual-class structure (6,932m Class A at 1 vote; 5,602m Class B at 10 votes, all held by Musk) gives Musk >85% of voting rights.
Story update (where value actually moves)
He revises three drivers — target revenue, target margin, reinvestment — across the three businesses:
On the AI TAM, he flatly rejects the prospectus figure: it claims a $28tn total TAM with $26tn from AI — which he calls "borderline fantasy," likening it to gamified TAMs in the Uber ($5.7tn) and Airbnb ($3.4tn) IPOs. He uses ~$3–4tn for AI instead. The Colossus compute centre, leased to Anthropic at $1.25bn/month, is flagged as a near-term revenue/margin support (and a potential future conflict if xAI competes with Anthropic).
Reinvestment rises across the board — lower sales-to-capital ratios near-term for space and connectivity, and a surge for AI to fund the tripled revenue target. Total 2025 capex was ~$14bn and R&D ~$9bn, roughly double 2024.
Updated valuation
He also lifts the discount rate, since the 10-year Treasury rose 4.20%→4.56%: initial WACC 8.02%→8.37%, steady-state 8.00%→8.25% (both near the US median).
Netting the offsetting changes (higher space margins and bigger AI market push up; slower near-term growth and the lower AI margin push down):
- Enterprise value: $1.21tn → $1.22tn
- Equity value: ~$1.3tn, with almost all the lift coming from the $75bn IPO cash inflow
- ~$100/share, pending RSU disclosure — versus a reported $135/share offer price (~$1.8tn pricing)
His stated fair-value range is $1.25–$1.35tn.
Conclusion and stance
The prospectus made the story "bigger but also more volatile." His chief concern is overreach in AI — overestimating the market and xAI's competitive position, then committing tens of billions more capex on that misjudgement — a risk amplified because the voting structure leaves shareholders unable to restrain Musk.
As a self-described investor (not trader), he considers $1.8tn too rich and won't buy at the offer — but, citing post-IPO drops at Facebook and Uber, he won't short either, given unpredictable momentum. He pointedly argues that rejecting SpaceX because it loses money or trades at 100x revenue is "lazy"; the defensible bear case rests on disagreeing about market size, margins, or governance.
Disc: Not held and not intending to, other than via my passive US and global funds.
Interesting @mikebrisy
I haven't spent any time looking at these IPO's because old Warren summed it up perfectly in my view -
And to put the cherry on top, as Charlie often said - "I have nothing to add".
I came across this graph in a substack I was reading this morning. The dislocation between public and private markets is incredible, but SpaceX is in out of this world. [insert rocket emoji here]
The aerospace company confirmed the fireball as Ship 39 splashed down in the Indian Ocean was pre-planned.
Plan the vessel was not being reused!
The initial public offering (IPO) is set to be the largest in Wall Street history, with a target valuation of up to $1.75 trillion.
Well that seemed to go well for Elon (now the world's first TRILLIONAIRE btw).
Pic of Elon looking pleased but modest:
From James "Rev Shark" DePorre :
The indices followed through to the upside on Friday but the largest IPO in history sucked up most of the energy. SpaceX opened at $150, $15 higher than the IPO price, hit an intraday high of $176.52 and then closed weak at around $161. Intraday chasers who were looking for sustained momentum were trapped and some were forced to bail out.
The SpaceX Debut
Overall it was a successful offering. Many on Wall Street were pleased that it didn’t turn into a frenzy and the intraday lows were never tested after the open. Some day traders may not have done too well but that isn’t all bad. The initial excitement will wear off quickly and we will start to hear some critical analysis about valuation.
The biggest danger is that only a small number of SpaceX (SPCX) shares are currently trading. Most of the float will be unlocked in the next six months so there will be plenty of supply. When that is combined with two giant AI IPOs that are coming soon, the issue of liquidity is going to be front and center in the months ahead.
Iran Hopes Help the Market
The other big issue that helped the market was continued optimism that a deal with Iran is finally coming. President Trump indicated that he expects a deal to be signed this weekend or Monday in Europe. Iran continued to issue the usual denials but this time they added they are closer to a deal than ever before. Oil markets seem to believe that a deal is likely as the United States Oil Fund (USO) moved to its lowest levels since April 21.
The big event next week will be the Federal Reserve interest rate decision on June 17. The new Fed head, Kevin Warsh, is stepping in. Lower oil prices will remove some of the pressure on him to raise rates but it will be interesting to see his posture in his first press conference as chairman.
SpaceX Has a Solid Launch But Doesn’t Reach Orbit | TheStreet Pro
Lots of chatter lately on the anticipated announcement of a Space X IPO expected sometime very soon. Apparently it'll be the largest and most sort after IPO in history which suggests it maybe difficult to get hold of any shares on offer let alone at a reasonable price.
I've been buying a few shares in PE1 for at least some exposure if I miss out in the IPO. For anyone interested the following is an extract from PE1's most recent performance update:
SpaceX is currently PE1’s largest underlying portfolio company exposure, comprising almost 14% of the Trust’s private markets exposure.
Founded by Elon Musk in 2002, SpaceX is the world’s leading commercial space company, designing, building, and launching reusable rockets and spacecraft while operating one of the largest satellite broadband networks, Starlink.
The company’s launch business is the dominant player in the market and its satellite internet service, Starlink, has nearly 10,000 satellites in orbit and continues to gain customers at a high rate.
The company's strong positioning in launch and space has also created several new business opportunities, including potential data centres in space. In December, the company conducted a secondary share sale at a valuation of approximately US$800 billion, representing a doubling in valuation from the previous mark.
In February, SpaceX merged with xAI, consolidating all the AI-related infrastructure (including the Grok AI tool) into SpaceX ahead of a highly anticipated IPO that is expected to be at a much higher valuation.
The deal valued the combined entity at approximately US$1.25 trillion, which is in excess of PE1’s current valuation for SpaceX of US$800 billion.