Elon Musk will probably get the $86 billion he wants from the SpaceX IPO. The harder question is whether investors will still be as enthusiastic about the company a year from now.
Seeking a valuation of $1.78 trillion, SpaceX is attempting something unprecedented. If successful, the offering will become the largest IPO in history and instantly rank among the biggest corporate fundraising events ever seen.
Many investors will focus on whether the valuation is justified.
I believe a more immediate conclusion is emerging: demand is likely to be strong enough for Musk to secure the capital.
There are several reasons why.
First, opportunities like this rarely come along. SpaceX is arguably the most sought-after private company in the world.
For years, institutions have watched its valuation climb through private markets while having limited access to ownership. The IPO finally changes that.
Second, investors are still searching aggressively for exposure to the artificial intelligence boom.
SpaceX is not a pure AI company, but it’s presenting a future that increasingly overlaps with some of the most powerful trends in global markets, including AI infrastructure, communications networks, advanced manufacturing and commercial space development.
Third, there’s Elon Musk himself.
Few executives polarise opinion as much as he does. Yet few have built businesses on the scale that he has.
Investors may question his forecasts, challenge his timelines and debate his management style, but many remain reluctant to bet against him.
Most importantly, professional investors face a dilemma.
If SpaceX succeeds and becomes one of the defining growth stories of the next decade, those who ignored the IPO may spend years explaining why they missed it.
For many portfolio managers, that risk is every bit as real as concerns about valuation.
For all these reasons, I expect demand to be substantial.
A successful fundraising would likely be interpreted as another endorsement of the AI trade that has helped drive markets higher. It would reinforce confidence in private valuations, encourage other high-profile listings and strengthen the view that investors remain willing to fund ambitious visions of the future.
Yet securing the money may prove to be the easiest part of the process.
History offers a useful reminder.
Many of the most celebrated IPOs have gone through periods of sharp declines during their first year as public companies. Initial excitement often gives way to a more demanding reality. Investors move from imagining future possibilities to scrutinising quarterly results.
Public markets can be unforgiving.
Every earnings report becomes a test. Every delay attracts attention. Every missed target generates questions.
SpaceX has spent years operating as a private company, where management enjoys greater flexibility and longer time horizons. Public ownership changes the dynamic.
A valuation approaching $1.8 trillion creates exceptionally high expectations from day one.
Investors buying into the IPO are not paying for the company as it exists today. They are paying for a future version of SpaceX that delivers extraordinary growth across multiple businesses and industries.
The distinction matters because future success is already heavily reflected in the proposed valuation.
SpaceX remains loss-making. Many of the opportunities supporting investor enthusiasm today will require years of investment, execution and technological progress before their full commercial value becomes clear.
Markets have a habit of becoming less patient when expectations become too ambitious.
None of this suggests the IPO will fail.
In fact, I believe the opposite is more likely.
The scarcity value of SpaceX, the continued strength of the AI investment theme, the strategic importance of Starlink and the market’s long-standing fascination with Musk all point towards strong demand.
But raising $86 billion and justifying a $1.78 trillion valuation are two very different challenges.
Nigel Green is deVere CEO and Founder
Also published on Medium.
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