Why SpaceX's entry into the stock market could be Elon Musk's biggest bet yet

Trading in the company's shares will begin on June 12
Getty Images via BBC
It is 7:25 am on October 13, 2024 at Starbase, near Boca Chica, on the Texas side of the border between the United States and Mexico. On the launch pad is the largest rocket ever built.
Its engines come into operation and the ship soars through the skies over the Gulf of Mexico to screams and applause in the SpaceX control room.
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But the launch is not the main event. What goes up must come down, and the way this rocket returns to Earth will become a landmark in space exploration.
Seven minutes later, the enormous rocket booster that propelled the ship into space begins to fall back to Earth, until its engines reactivate as planned.
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It reduces the speed of its descent and positions itself with millimeter precision to be captured by a structure called Mechazilla, nicknamed "chopsticks" (the "chopsticks" of Japanese cuisine), in an unprecedented operation carried out by engineers.
Amidst the shouts of celebration and greetings in the SpaceX control room, businessman Elon Musk tells his millions of followers on social media that this is a "major step towards making life multiplanetary", a reusable rocket capable of drastically reducing the costs of launches to Earth's orbit, the Moon and, one day, Mars.
A company with a futuristic vision led by someone many describe as an eccentric and out-of-the-ordinary genius, SpaceX and Musk are often compared to Tony Stark, leader of Stark Industries and also known as Iron Man in the Marvel Comics universe.
The launch of Starship in October 2024 marked another step in Elon Musk's ambitions for space exploration
Anadolu via Getty Images/BBC
On June 12, trading will begin in a batch of shares in the company SpaceX that, until now, could only be controlled or accessed by Elon Musk and a select group of large private investors.
It is not surprising that more than one UK stockbroker told the BBC that there is a "sudden increase" in interest from investors interested in space exploration. chance to buy shares in this company surrounded by expectations, led by a figure considered charismatic and who has captured the imagination of the public around the world.
British retail investors are set to receive around £1.5 billion in shares, and one of the UK's leading investment platforms believes the offering could attract a new generation of investors.
Simon Belsham, client relations director at Hargreaves Lansdown, said: "While we recognize that this initial public offering [IPO] may not be right for everyone, this is an exciting time for many of our clients. We hope this will be many people's first investment experience."
Even if you don't buy shares directly, if you have retirement savings tied up in the stock market, as virtually anyone with a pension plan does, it's very likely that you will soon become the owner of a small part of a company that is at the intersection of technology and geopolitics and, as Musk would say, at the center of the future of the human race.
The possibility of ordinary people buying shares in SpaceX is one of the most important moments in the history of financial markets, and it is about to come to happen, something that will almost certainly make Musk the first trillionaire in dollars in history.
SpaceX's entry into the stock market could make Elon Musk the first trillionaire in the world
Reuters via BBC
On the first pages of the prospectus - or sales brochure - for SpaceX shares, appears this discreet mission statement: "Build the systems and technologies necessary to make life multiplanetary, understand the true nature of the universe and carry the light of consciousness to the stars."
But the SpaceX isn't just about rockets, and perhaps not even primarily about rockets. The company is also a bet on the future of artificial intelligence (AI). Earth.
And many see this as Musk's "Icarus moment," when someone flies too close to the Sun. "I think this is an ego-driven project for Elon Musk," says Sinead O'Sullivan, an economist who previously worked for NASA. of the company is being put up for sale to ordinary investors, the price of the shares offered by Musk makes it possible to calculate the estimated value of the entire company.
The banks responsible for selling the shares assigned the company a market value of US$1.75 trillion (approximately R$9.45 trillion), which would easily place it among the ten most valuable companies in the world.
This is an impressive value for a company that lost almost US$5 billion (approximately R$27 billion) in the last year. So what is being bought anyway?
SpaceX is, in effect, several companies within one. It designs rockets, manufactures and launches both its own and third-party satellites. Its launch capacity alone surpasses that of any other company and even that of any country in the world.
The company's own satellites also form the basis of the Starlink communications network, which proved to be of crucial geopolitical importance during the defense of Ukraine against the Russian invasion.
This is a profitable business and one that Still, even the most optimistic estimates value this part of SpaceX at around US$300 billion (around R$1.6 trillion) - less than 20% of the US$1.75 trillion market value target attributed to the company.
Big bet on AI
The real bet is on artificial intelligence (AI) because SpaceX also includes the AI company xAI, which also includes AI. is controlled by Musk, in addition to a more ambitious space program, with plans to create data centers in space capable of providing enormous computing power, powered by solar energy and cooled by the cold of space, while also developing manned bases on the Moon and, in the future, on Mars.
SpaceX's success largely depends on its AI arm. Of the US$28.5 trillion (approximately R$154 trillion) in potential market identified by the company for its services, known as the total addressable market, US$26.5 trillion (approximately R$143 trillion) would be linked to AI.
To believe this, one must believe that the AI industry will be comparable in size to the entire US or European economy. 10% of this total market of US$28 trillion (R$154 trillion), although these are the only businesses in which the company has demonstrated concrete commercial and technical advantages.
"If we look at the business itself, it is not clear exactly what sector or industry SpaceX operates in", says O'Sullivan, formerly of NASA.
SpaceX's ambitions go beyond rockets and include artificial intelligence, computing and future missions to Mars
Getty Images via BBC
"The brand and the company's identity have been built over two decades around rockets, but most of the investment is going into data centers and an AI company that seems much more tied to social media than space," adds O'Sullivan. "All of this is brought together in a kind of conglomerate under the name Elon Musk."
The company's prospectus admits that SpaceX will need to do things that no company has been able to accomplish before. The document states that it will be necessary to "develop, market and operate products and services (...) on a scale never before achieved".
O'Sullivan expresses skepticism. "When we look at the gigantic value they are trying to attribute to the company, what is being purchased is much more a stake in the Elon Musk brand than in the space industry itself."
Uncontrolled ownership?
But there is no shortage of admirers willing to point out Musk's extraordinary ability to raise funds, challenge consensus and contradict his critics.
Musk faced the combined weight of the global automobile industry and, less than 20 years after its founding, its carmaker, Tesla, became worth more than Toyota, Ford, General Motors and Volkswagen together.
Another reason why some investors intend to pass up the opportunity to invest in what could be the biggest bet of Musk's career is the objection to the level of control he will exercise over the company.
Musk is listed as founder, CEO, technology director and chairman of the board.
Although he only owns 42% of the company, his shares have additional voting rights, which guarantees him, in practice, control over 85% of the company. company.
Tesla's market value grew rapidly and, in less than two decades, surpassed the combined value of several traditional automakers
Reuters via BBC
Financial journalist Robert Armstrong asks: "What does it mean to own shares in a company? It's ownership, but what kind of ownership is that? Do you really own something you can't control?"
Armstrong adds that investors should get a discount for giving up decision-making power: "I want to pay less for a company that my shareholding doesn't include control."
But as one major institutional investor told the BBC, "the cult around Elon Musk demands that his followers pay more for the dubious privilege of having no real say in how the company they own is run, and people seem happy with that."
And that control is in the hands of a man who has already used his power and fortune in controversial ways.
Musk spent almost US$300 million (around R$1.6 billion) on the second presidential campaign of the current American president, Donald Trump.
He has also secured billions of dollars in US government contracts and involved himself in other countries' internal affairs by supporting right-wing figures in the UK and elsewhere.
The Musk Effect
Still, betting against Musk has not been a smart strategy. He did not become the richest man in the world, with a personal fortune exceeding US$700 billion (approximately R$3.8 trillion) and which could soon exceed US$1 trillion (approximately R$5.4 trillion), without repeatedly contradicting his critics.
Since 2020, estimates of the value of SpaceX have jumped from US$40 billion (approximately R$216 billion) to US$1.75 trillion (approximately R$9.45 trillion), an increase of more than 40 times. In the same period, Tesla's shares increased tenfold.
And this happened even though Tesla's car production had reached a plateau.
The resumption of the rise in Tesla's shares, despite the drop in sales, reveals another of Musk's great talents: presenting new and ambitious goals to justify the company's value, in this case, the promise to migrate to the area of robotics, with the objective of building 1 billion humanoid robots.
This ability to quickly change direction and adapt led a major investor telling the BBC that "he looks more like [famous businessman and showman] P. T. Barnum than [John D.] Rockefeller or [Warren] Buffett."
Another dot-com boom?
But Fomo (an acronym for "fear of missing out") is a powerful emotion when it comes to Musk. Tesla's critics ended up getting it wrong and missed out on huge gains.
The SpaceX IPO is the biggest offering of its kind in history, but it represents just the first in a series of mega-sales of shares in companies on the front lines of the AI-based economy.
This flood of new shares hitting the market has some investors fearing a repeat of the dot-com bubble of the early 2000s, when companies with lofty goals but little or no track record of profits tried to sell as much as possible of shares to the public.
For now, SpaceX will initially put up for sale only 5% of the company's shares, equivalent to US$75 billion (around R$405 billion).
And the expectation is that AI competitors like Anthropic and OpenAI will also make similar moves on the open market.
Once a portion of the stock starts to sell off, new offerings could follow suit, meaning trillions of dollars of new stock could hit the market in the coming months and years.
This could create an excess supply that is difficult for demand to absorb, putting downward pressure on stock prices.
An important difference from the dot-com bust is that index funds, which automatically buy shares in companies included in the main market indices, may end up absorbing part of this supply over time.
Anthropic and OpenAI are expected to join SpaceX among US megacorporations, exerting an unprecedented level of power and global influence and an unprecedented dominance over the lives of citizens, at least according to the defenders of these companies.
Thus, as happened in 2024, the market's eyes are once again focused on SpaceX's launch platform, the stage for what could be the sale most important stock exchange in the history of financial markets.

Source: G1