Skip the IPO Wait: How to Invest in SpaceX Today
Key Points
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SpaceX is planning to go public later this year.
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There is a publicly traded stock that can give you exposure to the business.
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SpaceX stock looks overvalued if it goes public at its reported valuation price.
Unless market turmoil ruins the fun, 2026 looks to be a banner year for initial public offerings (IPOs). Giant private companies such as OpenAI, Anthropic, and Databricks are planning to sell stock to public investors.
No IPO is as anticipated as SpaceX. The spaceflight company founded by Elon Musk has been private for two decades and is rumored to be planning the largest IPO in history later this year at a valuation of $1.5 trillion or higher.
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The downside of an IPO is that retail investors may only be able to buy SpaceX stock after a potential IPO pop, putting them at the back of the line. Luckily, investors have a workaround to buying SpaceX stock today.
Here’s how anyone — not just professional investors — can get exposure to SpaceX stock before its upcoming market debut.
A publicly traded tracking stock
SpaceX has been making massive investments to expand its Starlink satellite internet service, with plans to add more capacity and eventually offer direct-to-mobile-device connectivity (today, you need a terminal to use it). This is one of the reasons it wants to raise massive amounts of capital through an IPO: It will be expensive to send all these satellites into orbit.
It is also the reason the company made a massive deal with EchoStar (NASDAQ: SATS). The telecommunications provider, which also owns Dish Network and Boost Mobile, sold its spectrum to SpaceX in a massive deal valued at $19.5 billion. In phased transactions, EchoStar will receive $8.5 billion in cash and $11 billion in SpaceX stock, with SpaceX funding EchoStar’s interest payments on its massive debt load.
SpaceX needed EchoStar’s frequencies (the spectrum) in order to beam internet directly to mobile devices, and it paid a pretty penny for it. Now, EchoStar can almost be treated as a proxy for owning SpaceX shares. The company does have a lot of debt, but it will also receive $8.5 billion in cash from SpaceX and coverage of its loan interest payments. Along with the value from its legacy assets, EchoStar can likely clear its debt obligations without considering monetizing its SpaceX investment.
When SpaceX gave EchoStar shares in its business, the spaceflight giant was valued at around $400 billion. Even if we factor in any shareholder dilution associated with the IPO, this investment may be worth three or four times its $11 billion cost basis by the time SpaceX goes public. This is why EchoStar stock is up 300% over the past year, with a market cap of over $30 billion.
A satellite in orbit over the United States.
Image source: Getty Images.
Investing in SpaceX does not come without risks
Buying EchoStar stock right now can roughly get you exposure to SpaceX stock pre-IPO. This will obviously excite any retail investor, given how sought-after SpaceX shares are.
However, at a valuation of $1.5 trillion or more, any investor needs to consider whether SpaceX is worth owning in their portfolio. I think it’s a risky bet at this price.
First, SpaceX now owns X (formerly Twitter) and xAI. Twitter is reportedly losing users at a steady rate after the Elon Musk acquisition, while xAI burns through tons of capital to build out its AI capabilities, still with close to zero market share compared to big players such as OpenAI or Anthropic. These will create a liability for SpaceX after it goes public.
Second, SpaceX stock may be expensive at this valuation, even with its massive growth potential. Last year, the company reported revenue of around $15 billion. That would give it a price-to-sales ratio (P/S) of around 100, making it one of, if not the most expensive, large-cap stocks in history. Even if revenue quadruples to $60 billion and the company has a 30% profit margin (unlikely given the business’s capital intensity), that would yield $18 billion in earnings and a price-to-earnings ratio (P/E) of 83. This is an expensive earnings ratio, and SpaceX will likely not generate this level of earnings for many years.
Just because you can get exposure to SpaceX stock before the IPO does not mean you should.
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Brett Schafer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
