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NEW YORK, April 1 (Reuters Breakingviews) - Elon Musk is preparing to recalibrate the appeal of audacity. The billionaire’s SpaceX rocket company, which he recently combined, opens new tab with his artificial intelligence ​venture xAI, may seek to raise as much as $75 billion in what would be the world’s largest ‌initial public offering. Despite the eye-popping sum, investors can easily absorb it. How much they are willing to pay will be the more important gauge.

Consider the sheer size. SpaceX is targeting, according to a Bloomberg report, opens new tab last week, nearly twice as much as the $44 billion, in inflation-adjusted ​terms, that Japanese telecom operator NTT secured in its record 1987 IPO. U.S. equity markets, meanwhile, now turn over, opens new tab $1 ​trillion of shares every day, according to Cboe Global Markets data. Such depth, suggests the $75 ⁠billion is manageable, even if it prompts other companies to postpone market debuts.

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The appetite looks clear. A private SpaceX ​tender offer in December doubled the price set six months earlier. Listed funds providing indirect exposure, opens new tab have spiked, opens new tab. The company also is considering a ​30% allocation to individual investors, according to a Reuters report. Index crafters are trying to fast-track, opens new tab the stock’s inclusion in major benchmarks.

Price, rather than demand, will be the X factor. SpaceX generated about $8 billion in EBITDA last year on roughly $15 billion of revenue, Reuters reported. At $1.8 trillion, it would be ​valued at more than 100 times sales.

Some enthusiasm, opens new tab is warranted. Tesla’s (TSLA.O), opens new tab stock price has gained 234 times since its 2010 ​IPO, making the electric-vehicle company Musk runs worth $1.4 trillion. SpaceX may even be the better business: it’s already profitable, thanks to the Starlink satellite ‌network.

Such ⁠great expectations have a habit of disappointing, however. Profitable companies with top lines exceeding $100 million underperformed, opens new tab the market by some 3% during their first three years of trading, according to Jay Ritter, a University of Florida professor who has tracked U.S. IPOs for decades. Even at the dot-com bubble’s peak, technology firms listed, opens new tab at a median of 49 times sales.

Since SpaceX set its ​sights on going public, the ​Iran conflict has pushed ⁠oil prices up and the S&P 500 Index (.SPX), opens new tab down. If new investors look past the tumult to enthusiastically back Musk, it will encourage machine-learning giants OpenAI and Anthropic to pursue ​their own trillion-dollardebuts, opens new tab, further spreading the exuberance premium.

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Context News

• SpaceX has confidentially filed for ​a U.S. initial ⁠public offering, Bloomberg reported on April 1, citing unnamed sources, and it is considering a $75 billion fundraising target, according to a March 25 report by the news service.
• Earlier media reports suggested the rocket, satellite and artificial intelligence company started and led by ⁠billionaire Elon ​Musk could seek a valuation of more than $1.8 trillion in its initial ​public offering.
• SpaceX said on February 2 that it had bought Musk’s xAI venture in a deal that valued the combined enterprise at $1.3 trillion.

For more insights like these, click here, opens new tab to try Breakingviews for free.

Editing by Jeffrey Goldfarb; Production by Pranav Kiran

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Sebastian Pellejero

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Sebastian Pellejero is a U.S. columnist for Reuters Breakingviews, based in New York. He writes about topics across business, investing, markets and technology. Prior to joining in March 2025, he worked as an equity research analyst at BlackRock and a markets reporter for The Wall Street Journal, along with stints at Bloomberg and Debtwire. He is a graduate of Wake Forest University and speaks Spanish.

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