SpaceX IPO: What the Market Just Told Us — Day One and What Comes Next

Two weeks ago, we published three deep dives into SpaceX's S-1:

• SpaceX IPO — A line-by-line reading of the entire filing. The numbers, the three business segments, the Anthropic contract, the Cursor option, and the governance reality.

• Correcting the Record — The "Conglomerate Discount" Explained — Where we corrected our own mistakes, recalculated the Starlink valuation, and explained why the S-1 numbers don't tell the whole story.

• What the S-1 Doesn't Tell You: The Bundling Problem at $1.75T — Where we made our core thesis: investors can't cherry-pick Starlink. They must buy the entire package — Starlink, launch, xAI, Mars, governance risk — all at once.

We concluded that at $1.75T, the market was pricing in extraordinary optionality for extraordinary risk. The question was: would the market agree?

On Friday, June 12, the market said yes — louder than anyone expected.

The Numbers

SpaceX priced its IPO at $135 per share, issuing 555,555,555 Class A shares and raising $75 billion — the largest IPO in history, nearly three times larger than Saudi Aramco's 2019 record. The pre-money valuation was $1.77 trillion.

What happened next was historic:

Musk's stake was valued at approximately $866 billion at the IPO price, per the company's updated IPO prospectus. Combined with his Tesla holdings and other assets, his net worth exceeded $1 trillion by the close — making him the world's first trillionaire.

This is not "the price went down." It went up 19% on the first day of trading, with the stock hitting a high 31% above the offer price. The market didn't reject the valuation — it bid it higher.

What This Means for Our Thesis

Let me be direct: our pre-IPO analysis remains structurally correct, but the market pricing tells a different story than we anticipated.

Where We Were Right

Our three core arguments still hold:

1. Starlink is the only profitable, visible business. At $11.4B revenue and 63% EBITDA margins, it's a world-class asset. The ~61% revenue share is genuine.

2. The bundling problem is real. Investors still cannot buy Starlink without buying the full package. This has not changed. The market simply decided the bundle is worth more than $1.77T.

3. The capex story is the story. $20.7B in capex in 2025 — more than total revenue — with AI consuming the majority. Starlink's cash is subsidizing a compute infrastructure buildout of staggering scale. This is the risk.

Where the Market Is Saying Something Different

The market is not pricing SpaceX based on current fundamentals. It's pricing it on optionality — specifically, the optionality that xAI and the Colossus data centers become foundational AI infrastructure at the scale of NVIDIA's data center business.

Consider: at $160.95, SpaceX trades at:

• ~108x price-to-sales (2025 revenue: $18.7B)

• ~191x price-to-EBITDA (consolidated EBITDA: ~$6.6B)

• ~92x Starlink-only EBITDA

For comparison, NVIDIA at its peak traded at roughly 70x trailing EBITDA. SpaceX is priced richer — despite having no consolidated profitability, massive governance concentration, and a business model where two of three segments operate at significant losses.

The market is pricing a binary outcome: xAI wins the compute infrastructure war, and everything else is free optionality. xAI doesn't, and the stock has enormous downside.

This is not wrong reasoning. It's just aggressive reasoning.

The Analyst Split: Two Camps, One Stock

Wall Street is deeply divided on day one — and the split reveals fundamentally different theses about what SpaceX actually is:

The bears (CFRA, Morningstar): Morningstar projected $63 pre-IPO — roughly half the offering price. CFRA issued a Sell rating at $115 on day one. These analysts are pricing SpaceX as what it currently is: a launch company with a profitable satellite division and a money-burning AI operation that is consuming more capital than the entire company earns. The bulls (Oppenheimer): Oppenheimer slapped an Outperform rating with a $190 price target — implying a $2.5 trillion valuation. This is pricing SpaceX as what it could become: the foundational infrastructure provider for the AI economy, with Starlink as the cash cow funding a Colossus-era data center network that makes cloud providers dependent on SpaceX's compute capacity. The consensus (~$164): The average analyst price target sits modestly above today's closing price. The market has agreed with nothing yet. It has agreed with momentum.

What Comes Next

Three catalysts loom in the coming weeks:

1. The Post-IPO Test (Monday, June 15)

Today's momentum came on IPO-day hype, volume, and retail FOMO. Monday is the first real test — the market closes the novelty and sees whether demand holds without the IPO spotlight. Tuesday (June 16) is when options trading begins, adding leverage, hedging, and — critically — directional bets from investors who don't want to (or can't) buy the stock outright. The Hyperliquid perpetual futures already showed the dynamic: SPCX-USDC traded near $172 intraday before pulling back from the $176.52 high.

2. Index Fund Inclusion (FTSE Russell June 26, MSCI June 29)

Passive index inclusion arrives in two waves. FTSE Russell adds SPCX to the Russell 1000, Russell Top 200, and other Russell US indexes effective after market close on June 26. MSCI follows with its Global Standard Index inclusion effective June 29. Together, these create mechanical buying pressure — index funds and ETFs accumulating SPCX as mandated by their benchmarks, with no regard for fundamentals or valuation multiples. It's algorithmic. It's a bid.

3. The Green Shoe Option (30-Day Underwriter Over-Allotment)

The industry calls this the Green Shoe option (named after Green Shoe Manufacturing Company, which first used the mechanism in a 1969 IPO). It's a standard underwriter tool to stabilize price or raise additional capital if demand exceeds the base offering. SpaceX granted its underwriters a 30-day option to purchase up to an additional 83,333,333 shares at $135. If exercised, this would increase the float by ~15% and raise an additional ~$11.2 billion. The option expires approximately July 12.

Crucially, the $75 billion from the base offering already landed on the balance sheet. The Green Shoe is optional additional capital — not a second raise. The company has its money.

Our Position Going Forward

We stand by the fundamental analysis. The S-1 tells us what it tells us:

• Starlink is valuable

• xAI is burning cash

• The bundling problem cannot be solved

• Governance risk is extreme

• Capex exceeds revenue

The stock price is irrelevant to the company's balance sheet. SpaceX raised $75 billion in a one-shot primary offering. That money is on the books. The stock trading at $160 tomorrow or $100 tomorrow does not change their capital, their burn rate, or their ability to build data centers. A secondary market price only matters to the company if it has a large block of treasury shares to sell — and with Musk's voting control intact, that is not happening. What the market pricing tells us is not about SpaceX — it's about sentiment toward xAI. At $160, investors are paying for the optionality that xAI becomes foundational AI infrastructure at NVIDIA scale. This is a forward-looking bet, not a reflection of current fundamentals. The S-1 already priced those fundamentals. The market is pricing a binary outcome: xAI wins, or it doesn't.

For investors, the question is not about the stock price. The question is: does the optionality thesis hold up? The S-1 told us the company is burning more in capex than it earns in revenue, with xAI consuming the majority of that spend. The market believes Starlink's cash will fund a compute empire. Whether that belief survives quarterly earnings, execution misses, or competition is the real story — not whether the ticker popped or dropped on day one.

We will continue monitoring and writing. The S-1 was the beginning. The public markets are where the story gets real.