SpaceX IPO Analysis: AI Valuations, Retail Access, Governance Risks

Name: The SpaceX IPO Is Wild
Uploaded: 2026-06-12T16:00:13+00:00
Duration: 22 min 7 s
Channel: The Plain Bagel
Description: Summary and key takeaways on The SpaceX IPO Is Wild: Summary & Key Takeaways, covering The AI IPO Race SpaceX leads the first wave of AI‑focused public

The Plain Bagel

Jun 12, 2026

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22 min video

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1 min read

YouTube video ID: jNAAG3Ma5K8

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SpaceX leads the first wave of AI‑focused public offerings, followed by Anthropic and OpenAI. The combined proceeds from the 2026 IPOs are projected to exceed the total raised by all U.S. IPOs since 2022. Anthropic and OpenAI have each been valued near $1 trillion in private markets.

SpaceX Financials and Strategy

SpaceX operates at an operating loss, with the AI segment accounting for 17 % of total revenue while consuming the majority of capital expenditures. The company trades at a price‑to‑sales ratio above 90×, far higher than profitable tech peers such as Google or Meta, which sit near 10×. Year‑over‑year revenue growth stands at 15.4 %, a rate described as below competitor growth.

The Prospectus and Governance

The prospectus outlines “moonshot” ambitions that include Mars colonization, asteroid mining, and in‑orbit data centers—goals the document itself admits are largely science‑fiction. Ninety‑three percent of the total addressable market is derived from AI opportunities. Elon Musk retains 85 % of voting rights through a special share class with ten‑fold voting power. SpaceX earmarked up to 30 % of its shares for retail investors, a stark contrast to the industry norm of 5–10 %.

Market Risks and Outlook

Retail investors may serve as “exit liquidity” for private insiders, raising concerns about the fairness of the allocation. Index providers such as NASDAQ and FTSE Russell appear to have eased inclusion criteria to fast‑track SpaceX’s entry. A New York Times analysis found that only 19 % of Elon Musk’s 602 objectives over two decades were achieved. Goldman Sachs projects SpaceX’s AI revenue could grow 100‑fold over the next four years, but the sustainability of such growth remains uncertain.

Takeaways

SpaceX leads an AI IPO wave that includes Anthropic and OpenAI, with expected proceeds surpassing all U.S. IPOs since 2022.
The company trades at a price‑to‑sales ratio above 90× despite operating losses and a modest 15.4% revenue growth rate.
Musk’s 85% voting control and the prospectus’s moonshot goals raise corporate‑governance concerns for investors.
Up to 30% of shares are reserved for retail investors, far exceeding the typical 5–10% allocation in tech IPOs.
Analysts warn that retail investors could become exit liquidity for insiders while the long‑term viability of SpaceX’s AI model remains unproven.

Frequently Asked Questions

What does SpaceX's 90× price‑to‑sales ratio indicate about its valuation?

A 90× price‑to‑sales ratio signals a valuation far above current revenue levels, suggesting investors are pricing in aggressive future growth rather than present profitability. This multiple dwarfs those of established tech firms, highlighting a potential disconnect between market expectations and financial reality.

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and FTSE Russell appear to have eased inclusion criteri

to fast‑track SpaceX’s entry. A New York Times analysis found that only 19 % of Elon Musk’s 602 objectives over two decades were achieved. Goldman Sachs projects SpaceX’s AI revenue could grow 100‑fold over the next four years, but the sustainability of such growth remains uncertain.

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This classic investment book teaches value investing principles, which helps readers critically evaluate the high price-to-sales ratios and speculative valuations discussed in the video.

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Principles For Navigating Big Debt Crises

Written by Ray Dalio, this book provides a framework for understanding market cycles and economic bubbles, helping the reader contextualize the risks of the current AI IPO wave.

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Financial Accounting For Non-Financial Managers Book

This book helps retail investors understand financial statements, enabling them to better interpret the 'AI money furnace' and revenue growth metrics mentioned in the prospectus.

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Full Transcript YouTube

Hey everyone, it's Richard. You're
watching the plane bagel. Today is the
day that we see the first company cross
the finish line in the AI race to go
public with Elon Musk's SpaceX. The
company whose perspectus reads like a
science fiction book, complete with
pictures for easy reading, officially
start trading its shares publicly under
the ticker SPCX, breaking records and
making Elon Musk the world's first
trillionaire. And depending on who you
ask, it either signals the start of the
retail investor AI golden age or the
beginning of the end of the AI bubble.
You see, this was just the first of
three massive AI focused IPOs that were
expected to see this year with
Enthropic, the company behind Claude
itself having filed confidentially
earlier this year to go public likely
sometime in the fall. and OpenAI, the
company behind Chachabt, announcing just
this week that it too had filed its S1
with the SEC. And as mentioned, these
IPOs are breaking a number of records uh
for SpaceX. Beyond just uh the massive
market capitalization, there's also the
fact that the company put aside a record
percentage of its shares to give retail
investors access to its IPO. And with
Enthropic and OpenAI themselves having
previously been valued just shy of $1
trillion each, the three companies
together are set to raise more money by
going public than all other US IPOs
combined since at least 2022, with total
proceeds from IPOs in 2026 expected to
blow previous years out of the water.
All of which is remarkable in its own
right. Uh but especially so when you
consider how relatively small and
unprofitable
these companies are. Of the three
companies, Enthropic is the only one on
track to see profitable operations this
year. Uh with SpaceX actually losing
money at the operating level. And these
companies spending well beyond their
revenues investing in scaling out with
OpenAI set to spend $600 billion by 2030
on compute spend compared to its
annualized revenues of just $25 billion.
So it's easy to see why these companies
are scrambling to go public. they need a
heck of a lot of money and public
markets offers another faucet through
which they can access that capital. Uh
but given how heavily focused these
companies have been in specifically
targeting retail investors with their
IPOs, it's raised some concerns that
these companies will soon be burning
through the pensions and life savings of
everyday investors to fuel their AI
money furnaces well before even
demonstrating a viable business
strategy. with SpaceX specifically
turning a lot of heads with its abnormal
prospectus, which could very well go
down in history as one of the most
bizarre ever seen. Uh, with the company
advertising itself as a bet on Mars
colonization, enterprise AI, asteroid
mining, and data centers in space, while
also putting forth the company's mission
as quote, to build the systems and
technologies necessary to make life
multilanetary, to understand the true
nature of the universe, and to extend
the light of consciousness to the stars.
Now, I don't know what extending the
light of consciousness to the stars
entails, but I imagine it has to do with
that Joe Rogan episode he was on back in
2018. Regardless, given the concerns of
an AI bubble seemingly pulling public
investors deeper into it, I wanted to
cover the topic to discuss the IPOs and
the details we have, the broader
implications for the market, and things
you yourself should consider if you're
hoping to use one of these companies to
go to the moon, whether figuratively or
literally, since space tourism is
another one of SpaceX's hypothetical
business lines. And the first half of
this video will really be focused on
SpaceX since we have the most details
about that company now that it's public.
Uh, but I'll leave chapters in the
description down below if you want to
hop to the different sections of today's
topic. SpaceX, as you might be aware,
was a company started and uh, mostly
controlled by Elon Musk that, as the
name implies, is heavily involved in the
space industry where it's actually built
a decent name for itself. The company is
famous for its rockets, having pioneered
techniques for reusing rocket boosters
and holding a dominant position in the
space launch industry, representing 80%
of global mass to orbit since 2023. And
its connectivity business, aka Starlink,
where it offers internet access via
satellite connection, is actually a fast
growing profit-making business. However,
earlier this year, amid the AI hype,
SpaceX decided that it was going to get
in on the action with Elon Musk
combining it, or more specifically using
SpaceX to acquire his other company XAI,
known for the social media platform,
formerly known as Twitter, and the AI,
formerly known as Mecca Hitler. with the
AI segment making up about 17% of the
company's total revenues but managing to
take up the majority of the company's
capital expenditures with its spending
quickly dominating the rest of the
business which is why the company's
being brought up in this broader
discussion of the AI gold rush. Now with
this IPO SpaceX is actually only selling
4.2% of its company stock represented by
555.6
six million shares roughly. Uh meaning
that most of the company will continue
to be held by the private investors who
owned the business before the IPO. With
Elon Musk himself retaining 42% of the
company's equity before dilution and at
an IPO price of $135 per share, the
company is set to raise at least $75
billion from the share sale. All of
which makes SpaceX the largest IPO
capital raise on record. uh with the
company set to exceed its original
market cap objective of around $1.75
trillion
which will actually lead to it
displacing Elon's other business Tesla
as the eighth largest US company by
market cap which is remarkable given
that the company's revenue doesn't even
crack the top 200 list. Uh which brings
us to the first reason why many are
viewing this IPO as absurd. SpaceX
essentially hit the market with a price
to sales ratio of over 90 times, which
puts it well above most other publicly
traded tech companies. Uh Google and
Meta, for example, who themselves have
AI businesses and are actually
profitable, trade at price to sales
ratios of around that 10 times level.
And while these rich valuations are
typically justified by higher growth
rates, historically anyway, that's not
what we've seen. SpaceX's AI segment
isn't even its fastest growing segment
internally, with the business growing
just 12.5%
year-over-year in the latest quarter,
with revenue for the company as a whole
increasing just 15.4%.
Well below the revenue growth rates seen
by its competitors. However, most of
SpaceX's valuation is very clearly being
tied to its future potential rather than
how the business stands today. Uh, in
fact, Morning Star analysts have argued
that based on current performance,
SpaceX is worth less than half of what
it's IPOing for. So, it's really what
Elon Musk has planned for the business
that has investors excited. But that
brings us to another absurd aspect of
this IPO. Uh, where the company lays out
the road map for its future, the firm's
perspectus. Uh, you see, when companies
IPO, they submit what's called an S1
form in the US anyway to the SEC for
review, a document that contains all the
necessary disclosures and information so
that investors can make an informed
decision when they buy into a company.
And in conventional Elon Musk fashion,
the SpaceX perspectus has been pretty
unconventional. Right off the bat,
investors have to scroll through 11
pages of pictures of rocket ships and
other space tech before they even get to
the table of contents, which I suppose
is fitting since it's quite common for
people to throw in a bunch of random
rocket ships when they're trying to pump
something. Now, not long after this,
we're faced with a quote from Elon Musk
philosophizing about being a space
fairing civilization and of course the
company's Star Trekesque mission
statement. Now, in addition to a number
of these grandiose statements being made
throughout the document, the perspectus
also includes a number of moonshot
business ideas,
literally uh because most of them
involve carrying out operations in space
for some reason, including traveling
around Earth via spaceship, space
tourism, inorbit manufacturing,
traveling to Mars and setting up
businesses there, building in orbit data
centers, and developing human
augmentation systems. a good chunk of
which by the perspectus's own admission
is science fiction since the technology
for many of these things is either
unproven or non-existent. Now, with all
of SpaceX's focus on space, you'd be
forgiven for forgetting that Spac X is
an AI business. But to convince the
non-believers, the perspectus includes
an outline of the business's total
addressable market, essentially what it
sees as its future revenue potential
with 93% of this amount being derived
entirely from its artificial
intelligence opportunities, namely
enterprise applications. Now, beyond
those mistaken for thinking we're
talking about a rocket company here,
these figures might surprise a number of
people. Uh, for one, the total
addressable market is about the size of
the entire US economy. And regarding
enterprise applications, most view Grock
as a mere extension of the X social
media platform. In fact, even
internally, the company actually
combines many of its operating figures
for both the exocial media platform and
Grock, seemingly demonstrating that its
use is primarily for social media. And I
don't know that many enterprises are
keen on integrating an AI model known
for undressing people on X into their
workflows. uh the one business case the
company did put forward in its marketing
material of Grock being used for an
enterprise effectively chocked up to
being a glorified Google translate which
doesn't really demonstrate this massive
potential and the idea of Grock as being
a contender with Enthropic and OpenAI
regarding this sort of enterprise
application hasn't really been helped by
the recent announcements from the
company that it would be renting out
compute power to Enthropic for $1.25 25
billion a month and Google for $920
million a month. Because while these
deals might prove lucrative if they
follow through, uh given that they alone
would actually double SpaceX's revenue
from 2025, it's a bit confusing from a
company that's claiming Grock's going to
dominate the space when it's renting out
its capacity to other AI models that are
more known for those enterprise
applications. So, you can see why the
SpaceX IPO has raised so many eyebrows
beyond just the sheer scale of it. The
way the company is being marketed is
just entirely different from the company
investors are actually buying into here.
And that's without getting into the
other quirks that come with this. Uh the
fact that Elon will be retaining 85% of
the voting rights over SpaceX thanks to
having a special share class that has 10
times the voting rights of class A
shares. a good chunk of the proceeds
from the IPO simply going towards paying
off existing obligations despite the
company marketing that it will go
towards developing its business. the
story that Musk actually required
companies working on his IPO to
subscribe to Grock and as mentioned the
company being heavily focused on
garnering retail investment with SpaceX
opting to reserve up to 30% of its
shares for individual investors compared
to the typical 5 to 10% and the company
even launching a retailside website
space xipo.com
where provided investor access to the
company's perspectives road show
presentation typically reserved for
institutional investors and a fact sheet
and listed out all the brokerages where
individual investors could go and access
IPO shares. So in the context of the
great AI IPO race, this one really takes
the cake in a number of ways. Uh now
regarding the two other IPOs here with
Enthropic and OpenAI specifically, uh we
don't yet have that many details on
these companies operations. While a
number of details around revenue and the
like has been leaked by private sources,
the companies have filed their
prospectuses confidentially, meaning the
SEC is reviewing it privately before
it's released to the public. But what we
do know is that with recent private
funding rounds, Enthropic has been
valued at $965 billion and is set to hit
$10.9 billion in revenue during the
second quarter, which could actually set
the company up for its first
operationally profitable quarter. And
OpenAI has recently been valued for $852
billion with management for OpenAI
similarly highlighting a desire to
reserve a sizable portion of their
shares for retail investors. And the
thing is these aren't even the only
companies going public here. While they
certainly are the largest and most uh
notable given that uh OpenAI and
Enthropic have been sort of competing
head-to-head to be the largest pure play
AI business, we've already had a number
of companies in the ecosystem like
Coreweave and Cerris go public recently
and companies like Anderil, Coher and
Data Bricks themselves eyeing IPOs in
the near term. And even among currently
public companies, we have businesses
issuing shares. Uh Google's parent
Alphabet, for example, recently
announced plans to sell $80 billion
worth on par with SpaceX's own capital
raise to help fund its AI ambitions with
Meta itself considering a similar move.
So, you can see that a lot of companies
are rushing to raise money from
investors to help fuel their intensive
spending to build out their AI
infrastructure either for their own use
or for their customers and compete for
that dominance in the industry. uh which
has led to some raising concerns that
these IPOs represent a way for private
investors to exit and cash out right at
the top of the hype that we're
democratizing access to these companies
right before the bubble pops. With
SpaceX, for example, given that the
public float is going to represent less
than 5% of the entire company, there are
concerns that the stock could experience
meaningful selling activity from
insiders as their staggered lockup
periods expire. With nearly $1 billion
of shares set to unlock within the next
couple of months alone. And given a
number of actions from key players
leading up to this IPO, it seems
increasingly likely that individual
investors will end up as the exit
liquidity for some of these insiders.
Beyond SpaceX itself focusing on giving
access to the retail base, we've also
seen brokerages like Fidelity, for
example, actually lower its capital
requirement from $500,000
to just $2,000 to give smaller investors
more access to this IPO with it being
quite typical for IPOs to only be
accessible by larger investors. There's
also been the story around index
companies like NASDAQ and the FTSC
Russell, which each eased their criteria
for index inclusion, allegedly at the
request of Elon Musk himself to
effectively fasttrack SpaceX's inclusion
into some of their flagship groups.
something that could see SpaceX join
indices like the NASDAQ 100 within its
first 15 days, which is unprecedented
and something that would lead to
automatic buying of this stock from
funds and investors who passively follow
these indices. Meaning, regardless of
how people feel about the AI bubble or
SpaceX, they could start seeing it
included in their 401k or pensions. Now,
the optimistic framing of this is that
democratization piece, right? giving
individual investors unprecedented
access to what is seen as a
technologically innovative company on
its IPO. And in Elon's case, it does
seem like a smart move to bolster his
company's valuation. He has a massive
social media following that in part
includes a bunch of retail investors and
he's known for his unconventional
approach to public relations which
combined with the company's grandiose
aspirations makes it a good contender
for meme stock status which we all know
from our corporate finance 101 class is
a triedand-rue strategy for capital
raises. But the pessimistic view of
course is that this introduces a lot of
risk to everyday retail investors at
times whether they want it or not. Uh
Elon Musk is of course no stranger to
controversy and has a history of things
like self-deing even with SpaceX itself.
Uh something that's not helped by his
retention of uh majority control. And
the man doesn't have the best track
record on following through with his
promises. In fact, we recently had a
piece from the New York Times analyze
Elon Musk's success rate on his
ambitious goals, which found that of the
602 objectives set over the past couple
of decades, only 19% were actually
achieved, with 35% being late or failing
to deliver, 13% being outstanding, and a
third just being too vague or difficult
to assess. A higher retail concentration
also makes the stock more susceptible to
price volatility, something admitted by
SpaceX itself in its perspectus. And
that could eventually impact future
capital raises for the company. It's
actually why a lot of companies that are
uh pursuing high- growth innovative
industries and are unprofitable often
remain private to avoid the regulatory
burden and the public investor scrutiny.
The sheer size of these IPOs has also
raised concerns about the crowding out
of investments in other areas and even
within the tech scene itself. One of the
reasons many are describing this IPO
mania as a race to go public is because
each subsequent company to release and
and debut its shares is likely to face a
smaller and smaller pool of available or
even interested investor capital. Truth
is, there's only so much money to go
around. Uh some have even speculated
that the sell-off in Bitcoin represents
investors selling their ownership to
raise capital for these investment
opportunities. But it's questionable
whether there's enough investor appetite
or dollars available to allow all these
companies to meet their objectives,
especially when we're seeing Treasury
yields floating closer to that 5% level.
If that figure rises higher, it could
discourage stock market investing and
valuations. It's why many people are
watching the SpaceX IPO so closely as
the largest IPO on record. It's going to
help set the mood for the other
companies going public later this year.
Finally, there are the grander concerns
about this all being part of a bubble.
The S&P 500 already sits at a price to
earnings ratio of around 31 times and
has become increasingly concentrated
among tech companies uh with the top 10
stocks, the majority of which are
somehow involved in the AI ecosystem
representing nearly 40% of the entire
index. So any correction could be
farreaching in terms of its impact on
the market and investors as a whole. And
while the S&P so far hasn't changed its
criteria to allow these companies to
enter the S&P 500, their hypothetical
inclusion would only make this
concentration worse. And with these
companies having such rich valuations,
it leaves very little margin for error
if AI doesn't live up to its full
potential. Goldman Sachs, for example,
one of the investment banks behind the
SpaceX IPO, has argued that SpaceX could
see its AI revenue grow by 100 times
over in the next four years,
demonstrating some pretty exuberant
expectations for a technology that,
while certainly promising, hasn't yet
demonstrated that long-term business
sustainability. One survey by McKenzie
released in November found that 88% of
respondents already use AI in at least
one business function with nearly 31%
scaling their use. But so far just 39%
report an impact on enterprise earnings
before interest in tax from their AI
use. So, while AIE certainly seems set
to grow, it's questionable whether rates
will continue at their current
blistering pace, especially with 30% of
survey respondents having experienced
inaccuracies at least once with their
models. And all that adoption is with AI
companies taking a loss on their
operations. Eventually, they'll have to
charge a sustainable price for their
offerings. We're already seeing a number
of companies move towards a token
consumption pricing model that basically
charges uh users based on how intensive
their request is. And it's yet to be
seen whether AI adoption will justify
these higher prices in the long term.
Now the flip side to all this is that
this is a technological revolution. Uh
these models are rapidly improving. The
companies are already seeing meaningful
revenue growth and all of this justifies
the hype and the valuation which is
certainly possible. The issue with
technological revolutions is that
they're pretty hard to track or predict.
But with these companies again being
priced for perfection, a lot of that
upside is being priced in, which leaves
investors with a lot of risk. So, it's
up to you whether you decide to invest
in SpaceX or Enthropic or Open AI. Uh
certainly, if the near-term revenue
growth these companies have seen
continues into the future, they could
prove quite attractive. And there's no
denying the impressive technological
feats these companies have achieved and
could potentially achieve in the future.
Uh, and with SpaceX specifically, some
people like the Elon factor. Uh, from
his political takes to his truck
designs. His company Tesla has managed
to retain a rich valuation in spite of
falling earnings and slowing revenue
growth. And some are optimistic that
with grand objectives like the joint
venture terraab where the company plans
to make a massive semiconductor factory
and grander objectives of going to Mars
that Musk will somehow find a way to not
only make these ideas work but also make
a bunch of money in the process. But
it's hard not to be skeptical around how
profitable these companies might end up
being, especially when you talk about
the goals that some have set for
themselves. So, as innovative as these
companies have been, there's also no
denying that they present meaningfully
higher risk than your typical mega cap
stock. And just like Musk's predictions
that we would have a 1 million robo taxi
fleet by 2020, and that SpaceX would
reach Mars by worst case scenario this
year or by 2031, it's worth taking these
visionary promises with a grain of salt
when you're the one funding them.
Anyway, that's the video. Thanks for
joining me today. I hope you found it
helpful. If you did, please do make sure
to like, subscribe, all that good stuff.
It does help the channel tremendously.
And let me know your thoughts on the
SpaceX IPO or uh the general AI IPO
race. Uh, thanks again for joining and
as always, be safe out

Jun 10, 2026

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