SpaceX IPO Talk Ignites Space Stocks

Yesterday, March 24th, SpaceX announced that it aims to file its initial public offering (IPO) in the coming weeks. According to Reuters, advisors involved in the preparation “expect the Elon Musk-led company could attempt to raise more than $75 billion in what would likely be one of the largest IPOs in history.” CNBC agrees, recently reporting that this IPO could be the “biggest IPO ever,” seeking a $1.75 trillion valuation.

According to Benzinga, “the current top holding in the Procure Space ETF is Rocket Lab Corporation (NASDAQ: RKLB) at 5.35%.” During premarket trading today, shares of companies, including Rocket Lab, were up between 3% and 4%. Moreover, Tesla’s stock was up approximately 1.7%.

The Economic Times has written that SpaceX’s IPO ambitions are related to its longer-term vision of building orbital infrastructure, including data centers in space. In fact, last month, SpaceX acquired Elon Musk’s xAI in a transaction that “valued SpaceX at $1 trillion and xAI at $250 billion, according to a person familiar with the matter.” This suggests that the SpaceX IPO might provide additional capital for data centers.

Interestingly, in addition to operating rockets, SpaceX controls Starlink, a global satellite internet system. Futurum writes that “Starlink dominates the LEO satellite internet market with over 8,000 satellites in orbit.” SpaceX’s acquisition of Musk’s xAI has enabled the company to pursue applications such as proposed orbital data centers—something no competitor can currently match. SpaceX is moving beyond being just a space company and is positioning itself as a vertically integrated player that could compete with traditional hyperscalers and data center operators. Quilty Space underscores this by stating that “Musk is positioning SpaceX at the nexus of two white-hot industries for investors: space and AI.”

Quilty Space lists five possible implications of SpaceX’s potential IPO. One likely consequence is that orbital data centers will skyrocket in popularity. Similarly, its IPO could introduce new competitors into the space industry. SpaceX might also use its public funding for novel initiatives beyond its current projects. Evidently, this IPO will directly impact other companies within the space industry. Competing stocks, which consist largely of satellite communications operators, may struggle as a result.

What are your predictions regarding the impacts of SpaceX's potential IPO?