SpaceX IPO: Before You Buy In, Understand Who’s on the Other Side of the Trade

tl;dr: SpaceX is targeting $2 trillion on $16 billion in revenue. The only disclosed Starlink financial filing shows under 3% net margins – not the 54% EBITDA figure in IPO coverage – because the rocket business subsidizes the satellite business by roughly $4 billion a year. The valuation jumped from $350 billion to $2 trillion primarily through a self-assessed acquisition where Musk sat on both sides of the deal. Insiders may be able to sell from day one. The S-1 drops in late May. Read it before you buy.

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The SpaceX IPO is targeting $2 trillion and a June listing. It will be the largest IPO in history. The retail allocation is reportedly 30 percent of shares – three times the normal level. Insiders may be able to sell from day one.

That combination is worth understanding before day one arrives.

The basic math

SpaceX had approximately $16 billion in revenue in 2025. The IPO target is $2 trillion. That's 125 times revenue.

Apple trades at roughly 3 times revenue. Amazon at roughly 4 times. At 10 times revenue – a multiple that would make SpaceX the most expensively valued industrial company in public market history – justifying $2 trillion requires $200 billion in annual revenue. Current projections for 2026 are $23 to $24 billion.

How the valuation got here

In December 2024 insiders sold SpaceX shares at a $350 billion valuation. Fifteen months later the target is $2 trillion. Revenue grew roughly 60 percent in that period. The valuation grew nearly 500 percent.

The gap was created by a single transaction. In February 2026, SpaceX acquired Musk's AI company xAI in an all-stock deal. Musk controlled both companies. No independent fairness opinion was obtained. The valuations were set by boards whose members Musk appointed.

What $250 billion bought: a chatbot generating approximately $250 million in revenue over six months while losing $2.5 billion. Within weeks of closing, Musk acknowledged the core technology needed to be rebuilt. By March 2026 every co-founder of xAI except Musk had departed.

A quarter of the combined company's pre-IPO valuation rests on a line item the seller priced himself, for a business he has since admitted needs to be rebuilt, staffed by a founding team that no longer exists.

The Starlink margin story

Starlink is presented as a software-like business with 54 percent EBITDA margins. There is one place where Starlink was legally required to disclose its actual financials: its European subsidiary, filed in the Netherlands.

Those statements show $2.7 billion in revenue and $72 million in net profit. Under 3 percent net margin.

The gap between 54 percent and 3 percent comes from launch pricing. SpaceX charges Starlink approximately $28 million per satellite deployment mission. It charges outside customers $62 million for the same launch. SpaceX conducts approximately 120 Starlink missions per year. The difference is roughly $4 billion annually that Starlink doesn't pay – because the same company owns both the rockets and the satellites.

Subtract that $4 billion and Starlink's margins collapse. At market launch rates, Starlink as a standalone business almost certainly loses money. The profitability story depends entirely on an internal pricing arrangement that has never been publicly disclosed. The S-1, expected in late May, will reveal it for the first time.

What you're not buying

Bloomberg has reported SpaceX is weighing a dual-class share structure giving insiders 10 to 20 votes per share against one for public investors. The person who set the $2 trillion asking price, structured the xAI transaction, and controls the pricing between the rocket business and Starlink will retain effective control of all three of those levers after the IPO. You're buying economic exposure. Governance isn't included.

The Financial Times has reported bankers are considering eliminating the standard 180-day lock-up on insider selling entirely. Paired with a retail allocation three times the normal size, the structure puts more retail buyers than usual at IPO price with insiders potentially able to sell into that demand from day one.

For the employees and early investors who've been building equity for 24 years, this is a liquidity event of historic proportions. For retail buyers on day one, the question worth sitting with is whether they're the beneficiaries of the event or the mechanism by which the beneficiaries exit.

The S-1 is what matters

The prospectus is expected in late May. It will be the first time SpaceX has been legally required to disclose its actual financials, governance structure, and the internal pricing between its rocket and satellite businesses. Everything before it – including this post – is analysis built on incomplete information.

The incomplete information available today suggests the gap between the narrative and the numbers is large enough to warrant patience before day one.

Buy low, sell high. The people who've held SpaceX equity for 24 years have done the first part. Day one is where they do the second. Understanding which side of that trade you're on is the work worth doing before the prospectus drops.

Wrote a longer version of this with the full analytical framework – happy to link in comments if anyone wants it.