Musk’s SpaceX is shaping up as the biggest IPO on record. It’s also bending the rules to do so

Elon Musk’s house exploration firm SpaceX has filed confidential papers forward of a deliberate public firm itemizing on the US NASDAQ inventory alternate.

The preliminary public providing (IPO) for the firm managed by the world’s richest man is concentrating on a complete valuation of US$2 trillion. Musk plans to record solely a small fraction of the firm to raise US$75 billion from public traders, which might nonetheless make it the largest IPO in historical past.

So, why is SpaceX planning to go public? And what does the IPO imply for traders who would possibly need a tiny slice of the motion?

The backstory

SpaceX says it goals to “make humanity multiplanetary“You would anticipate no much less from Musk, who based SpaceX in 2002.

His firm’s breakthrough was to re-use as a lot of the rocket and launch vehicle as potential. This slashed launch prices to as little as 5% of the prices in the early 2000s, and turned business house flight from science fiction into actuality. The firm says it has now completed about 600 successful rocket landings.

Yet, for all its house ambitions, SpaceX nonetheless derive 50–80% of its revenue from Starlinka communications enterprise, which offers satellite tv for pc web to over 10 million customers round the world.

In February 2026, SpaceX merged with xAI, the loss-making AI firm behind the Grok chatbot, in what was the largest private merger transaction on file. The deal valued xAI at US$250 billion and SpaceX at US$1 trillion, making a mixed entity worth US$1.25 trillion.

The merger has helped to set the stage for the SpaceX IPO.

Musk prompt the IPO proceeds might be used for launching up to one million data center satellites into space. The thought is that space-based information facilities can be powered by ample photo voltaic power, and due to this fact bypass the constraints of electricity and water usage on Earth.

Bending the rules for the IPO

SpaceX could also be the first of three mega-IPOs this 12 months, forward of potential listings of AI corporations Anthropic and OpenAI.

If it goes forward with plans to elevate US$75 billion, that will characterize simply 3.75% of the firm’s whole worth. It means the overwhelming majority of SpaceX would stay in non-public arms, owned by Musk himself and a handful of early non-public traders. In inventory market phrases, this is known as a low “free float”.

Normally, corporations that solely record such a small proportion of their whole worth wouldn’t qualify for inclusion in main inventory market indices like the S&P 500 or the NASDAQ 100.

The NASDAQ usually requires not less than a ten% free float of shares in a given firm. But to enable a possible itemizing of SpaceX to be included in the index, the alternate has launched a special adjustment to the weighting of shares and eliminated the 10% minimal.

NASDAQ also lowered the regular “seasoning period” earlier than a newly listed firm can be a part of the index from three months to just 15 trading days. Again, this is to accommodate the SpaceX itemizing.

For traders in passive funds, together with exchange-trade funds (ETFs), this issues lots. Currently, greater than US$600 billion of investors’ money is with passive funds that observe the NASDAQ 100 index. As quickly as SpaceX joins the index, these traders will routinely be shopping for in. The concern is that permitting large corporations such as SpaceX to enter the index too shortly could lead on to large worth swings, which might expose thousands and thousands of traders to excessive volatility.

SpaceX desires traders to worth it at US$2 trillionnevertheless it solely earned US$15 billion in revenue final 12 months. At that fee, it could take 133 years of income simply to match its present asking worth.

Tesla, one in all the costliest shares in the world, would take simply 13 years — making SpaceX’s price ticket ten occasions greater.

Other main market indices, such as S&P 500 and FTSE Russell, are also bending their rules to fast-track the inclusion of very massive, newly listed corporations.

Many extra traders have their cash in funds that observe S&P indices in contrast to Nasdaq 100 – greater than US$16 trillion in passive funds track the S&P. If the S&P 500 follows NASDAQ’s lead and modifications its personal rules to accommodate SpaceX, the wave of computerized shopping for can be even bigger.

What does this imply for traders?

Musk’s corporations have lengthy been the darlings of non-professional, retail traders, and SpaceX can be no exception. In reality, the firm mentioned it aims to sell up to 30% of its shares to non-institutional, particular person traders.

With SpaceX’s sky-high valuation, traders want to cease and suppose earlier than shopping for in. But when highly effective corporations can rewrite the rules in their very own favor, pondering fastidiously turns into a luxurious. Markets solely work when everybody performs by the similar rules, and proper now, not everybody is.