SpaceX is set to launch one of the most anticipated initial public offerings in years on June 12, aiming to raise up to $75 billion by offering shares at $135 each. This would value the company at an eye-popping $1.75 trillion, a figure that has raised eyebrows among market analysts.
Analyst Warns of 'Stratospherically High' Valuation
Michael Hewson, senior market analyst at iForex, cautioned that some investors might baulk at SpaceX's huge valuation, calling it 'stratospherically high'. He noted that the fixed price before the book-building process could deter potential buyers, increasing the risk that the IPO might fall short of its target during the investor roadshow.
Financial Metrics Raise Questions
On any normal metric, the valuation defies belief. Last year, SpaceX reported a loss of $4.9 billion on total revenues of $18.7 billion. While revenues grew by 33% from 2024, most of the improvement came from its Starlink service, which contributed about $11.4 billion. Based on last year's revenues, a $1.75 trillion valuation equates to 92 times sales, a multiple that Hewson describes as 'stratospherically high' for a business currently classified as either aerospace or telecoms.
Investors will now watch closely as SpaceX embarks on its roadshow, weighing the potential of its Starlink business against the hefty price tag.
