SpaceX IPO is Musk ‘referendum,’ say market watchers
Elon Musk at SpaceX in Brownsville, Texas, May 27, 2025.
Marvin Joseph | The Washington Post | Getty Images
Friday’s hotly anticipated SpaceX public debut could prove a defining moment for capital markets — and be a “referendum” on Elon Musk’s leadership, according to market watchers.
Musk’s eye-watering $1.75 trillion valuation target reflects a price-to-earnings ratio of almost 100-times, compared to around 20-25-times for chip giant Nvidia and roughly 10-times for Apple.
Nasdaq has recently introduced rule changes to make it easier for SpaceX and other firms planning mega IPOs to list on the Nasdaq 100, while S&P Global has refused to make exceptions to allow for the group’s early entry into the S&P 500.
What voting rights will Elon Musk retain?
But investors are also being asked to make exceptions, both on valuation and Musk’s insistence that he will retain an estimated 80-85% of SpaceX voting rights – something that has often deterred investors weighing stocks, even those of companies that — unlike SpaceX — have a history of consistent profits.
Matt Calkins, CEO of enterprise software company Appian, told CNBC’s “Squawk Box Europe” on Thursday that the IPO was “a referendum on Elon and how much faith investors have in this individual entrepreneur.”
“I think they’ve got a lot, because he’s done a lot, and they’re betting on his ability to open up new markets, but that is highly speculative.
“I wouldn’t want to invest [and] I wouldn’t want to guess either way on an IPO like this.”
“We’re at an early stage where there’s tremendous uncertainty, and a lot of the investments are going to be based on personal belief. It’s just too early to be financially wise about things like that.”
Ben Ritchie, head of developed market equities at Aberdeen Investments, said in a Thursday note that the IPO will test investors’ “willingness to embrace a new model of public equity ownership: high valuation, limited governance rights, and faith in a founder-driven vision.”
He added: “That combination has worked before. But at this scale?”
Will SpaceX stock hit $330?
Nevertheless, many investors are bullish and see near- and long-term upside for SpaceX shares regardless of their richly valued debut.
New Street Research analysts said in a note on Thursday that they expect the company stock to hit $165 within 12 months of the IPO, reflecting 22% upside and a valuation of $2.3 trillion when accounting for the group’s proposed acquisition of code-editing firm Cursor.
The analysts said: “The space opportunity is large and diversified and will play out over more than a decade.
“With that in mind, we propose an alternative top-down approach to estimate the enterprise value the space opportunity could represent in 2040, and to actualize it back to today.
“Based on our low-end market growth assumptions, our $2.3 trillion valuation assumes [SpaceX] win 75% of this market.
“If… the whole opportunity grows to our high-end estimate and SpaceX wins 50% share, it would imply a fair value of $330/share.”
But James Dow, a professor in the finance faculty at London Business School, urged caution when considering SpaceX’s longer-term space trajectory.
“The valuation of SpaceX depends on what it’s going to be doing in 20 years,” he told CNBC’s “Squawk Box Europe” on Thursday.
“But, in 20 years, Musk will be quite elderly and I don’t know what he’ll be doing.” SpaceX’s valuation “is inevitably very tied up with him, so I think that’s perhaps one of the biggest risks,” Dow added.
