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The Largest IPO Ever

Listen, when the biggest IPO of all time hits the tape, you take a second and read the prospectus. It’s 300 pages with a decent amount of SEC nonsense and literally every bank other than Jefferies is on the cover, but it’s the first glimpse us normal people get behind the curtain of SpaceX.

SpaceX was founded in 2002, two years before Meta (which was then still the Facebook), a year before Tesla, three years before YouTube, and just two years after ICE (the company that owns the NYSE).

This means SpaceX has stayed private for almost 24 years. That’s longer than my analyst has been alive, but somehow still shorter than the number of years my intern has known he has wanted to be a banker for.

Before we dive into the details, this IPO could push Elon to become the world’s first trillionaire. This would make his net worth larger than the market cap of all but 10 public companies in the US and roughly equal to the market cap of Berkshire Hathaway.

Given 1 trillion feels like a made up number, here is some simple math for you to understand scale. 1 million seconds is about 12 days, 1 billion seconds is about 32 years, and 1 trillion seconds is 318 centuries.

Say what you will about Elon, but the man has realized the American dream and then some. Hats off to him no matter how this shakes out. Btw - if your family office needs a meme guy or a newsletter writer, the OWS team can start tomorrow.

Preamble aside, let’s dive into the biggest IPO in history.

Part I: The Prospectus Menace

Before we get into the numbers, you need to understand what you’re buying, because the S-1 does something that will confuse a lot of people.

SpaceX did not just file an IPO for a rocket company. It filed for a rocket company, a satellite internet business, an AI lab, and a social media platform, all rolled into one filing, all retroactively presented as if they’ve always been one company. I assure you, they have not.

The filing has been recast to include xAI (formally acquired February 2026) and X, the social media platform formerly known as Twitter (absorbed by xAI in March 2025).

Because Elon owned all of them, the accountants treat it as one entity across all historical periods, something I am sure they did not do in draft 1 which caused some headaches.

This means the 2024 and 2023 “SpaceX” numbers you see in the prospectus already include xAI and X, even for years when SpaceX didn’t own either.

The three segments are Space (rockets, Starship, NASA, defense), Connectivity (Starlink), and AI (xAI, Grok, X).

Every headline about SpaceX’s losses is a headline about the AI segment. What, you don’t use Grok? When you strip that out, the rocket and Starlink business looks very different. So just keep that in mind as we go forward.

Part II continues below…

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The Private Markets Outlook from Q1

Let’s get into the key AI developments and trends we saw in Q1, according to the ToltIQ research team.

• Tons of capital is flowing into the big name LLMs ($172B).

• As models improve, cost efficiency has also improved.

• Approximately 24% of enterprises are seeing ROI on their AI implementation.

Here are the consistencies of the 24%:

• Their implementation is CEO-led: Top-down AI accountability drives results.  

• They start specific: They select a use case, refine it, then scale. 

• They measure outputs: They track which deals used AI and how it drove value.

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Part II: Attack of the AI

The 2025 figures are astonishing. Revenue of $18.67 billion translating into Adj. EBITDA of $6.6 billion and a net loss of $4.9 billion with CapEx of $20.7 billion

The accumulated deficit as of March 31, 2026 is $41.3 billion, which is more than the combined accumulated losses of Uber, Airbnb, Rivian, and Didi at the time of their respective IPOs.

So you are probably asking - why on earth is a company that lost $4.9 billion worth over $1 trillion? Well, the answer is because Elon lives on Mars, obviously.

Assuming you are asking that question, which is fair, I would argue you have to dive a little deeper. Don’t ask why it’s worth $1 trillion, ask why it is losing so much money. The answer will harken back to what I mentioned earlier - SpaceX isn’t just rocket ships and satellites.

Part III: Revenge of the Profit

Starlink generated $11.4 billion in 2025 revenue, which was 61% of the entire company, with $4.42 billion in operating income and an adjusted EBITDA margin of about 63%.

That’s right - a satellite internet business that didn’t commercially exist before 2020 is now generating over four billion dollars in operating income with 63% EBITDA margins, still growing at 50% year on year.

Starlink ended 2025 with roughly 9.2 million subscribers across more than 9,500 satellites. In Q1 2026 alone it did $3.26 billion in revenue and $1.19 billion in operating income.

Now here’s where it gets interesting. The 9.2 million subscribers are mostly residential consumers paying somewhere between $120–$250 a month. That’s the established base. The growth story is in the segments where Starlink charges dramatically more.

Maritime customers pay roughly $34,000 per user per year. Aviation customers pay roughly $300,000 per user per year. Both segments have less than 1% market penetration today. If you were trying to find a market with room to run, you just found it.

The next phase of Starlink is V3 satellites, each carrying one terabit per second of downlink capacity, a generational jump from the current fleet. The S-1 confirms V3 deployment on Starship begins in the second half of 2026. This is why Starship matters to the Connectivity story. The two are not separate bets. One is the truck that delivers the other.

One real risk: average revenue per subscriber is declining as Starlink expands internationally and into lower-income markets. The path to $20 billion in Connectivity revenue requires high-ARPU enterprise and government segments to grow faster than consumer ARPU is falling.

Part IV: A Long-Term Hope

The launch business did $4.07 billion in 2025 revenue on a $657 million operating loss, driven almost entirely by Starship R&D.

SpaceX completed 165 orbital launches in 2025 (its sixth consecutive annual record) with 100% payload delivery success on Falcon 9. Since founding: roughly 7,400 metric tons to orbit, 99%+ mission success rate, 650+ orbital launches, more than 540 on flight-proven reused rockets.

Launch revenue growth has slowed. Volumes and prices were roughly flat between 2024 and 2025. SpaceX holds about 85% of the U.S. orbital launch market. There is not a lot of share left to take. The growth lever here is Starship, which is the million pound gorilla in this entire prospectus.

Starship consumed $3 billion in R&D in 2025 and $930 million in Q1 2026 alone. The filing says Starship is designed to reduce the cost of reaching orbit by 99% or more versus the historical average. SpaceX is launching Starship V3 the day after I am writing this, but if it works, that is the best-timed product demo in IPO history. If it doesn’t, the risk factors on page 26 are going to age very badly.

Starship delays are listed at the very top of the S-1’s 36 pages of risk factors: if Starship doesn’t achieve commercial scale, Starlink V3 slips, orbital AI compute doesn’t happen, the Artemis lunar contract is at risk, and the launch economics story stalls. The upper half of the $1.75 trillion valuation has Starship as load-bearing infrastructure.

Part V: Grok Strikes Back

xAI plus X generated $3.2 billion in 2025 revenue and an operating loss of approximately $6.4 billion. That means that xAI spent 3x its revenue in one year. I mean, no wonder Elon had to merge it in with SpaceX…that is not a viable operating model.

Most of that $3.2 billion in revenue comes from X’s advertising business, not from Grok.

The actual AI product — Grok — grew revenue about 22% in 2025. For context, Anthropic grew over 1,000% in the same period. OpenAI grew roughly 300%. But yea, we knew that the only reason anyone used Grok was for NSFW reasons or because they wanted to be on the IPO.

The segment is burning approximately $14 billion annually in cash. The math is almost exact: every dollar Starlink earns in operating profit gets consumed by the AI segment.

The prospectus also discloses that SpaceX faces litigation from the absorption of xAI and X that will likely cost $530 million. Good thing xAI generates enough profit to absorb that.

The AI bull case is not Grok subscriptions. It is orbital compute. SpaceX is already shifting some launch capacity from Starlink toward transporting AI servers into orbit.

The thesis is that reusable rockets make space-based AI infrastructure economically viable for the first time. The S-1 claims a total addressable market of $28.5 trillion, of which $26.5 trillion is AI, including $22.7 trillion in enterprise applications. I mean sure, and the TAM for my newsletter is $30 trillion. Don’t ask how I got there.

Part VI: Return of the Valuation

SpaceX is targeting $1.75 trillion on a raise of $70–75 billion, the largest IPO in history by a very wide margin. Saudi Aramco raised $35.4 billion in 2019. SpaceX is trying to raise double that.

At $1.75 trillion against $18.67 billion in 2025 revenue, you’re at roughly 94x trailing sales. Against $6.58 billion in Adjusted EBITDA, you’re at roughly 266x. I simply report the news and cannot give investment advice but just to be clear those numbers are…high.

The honest valuation framework looks something like this. Starlink alone, using satellite broadband comps with a growth premium, is defensibly worth somewhere around $500–700 billion. The launch business adds a meaningful chunk on top. PitchBook puts the total fair-value range at $1.1–1.7 trillion. Morningstar called $1.5 trillion “expensive and risky, but not irrational.”

This means somewhere between $500 billion and $1 trillion of the $1.75 trillion target rests on Starship reaching commercial scale, xAI generating real AI revenue, and orbital compute working as described. These are things that do not yet exist as revenue lines in the filing.

The share price range hasn’t been set yet. It appears in the amended prospectus before June 4. What we do know: SpaceX did a 5-for-1 stock split on May 4, and is reserving up to 30% of shares for retail investors, about 3x the industry standard. That’s a very smart way to build a million loyal shareholders who are going to tell all their friends about it. Diamond hands coming back?

Part VII: Elon Awakens

Naturally, Elon isn’t just going to hand his pride and joy over to a bunch of Reddit apes…sorry, investors…without retaining some control.

Class A shares with one vote per share are being offered as part of the IPO. The Class B shares - which Musk holds - have 10 votes per share and the Class B shareholders elect a majority of the board. So Musk owns 42% of the equity but has 79% of the votes.

The S-1 on this: “Mr. Musk will control the voting power over the selection of our board. As a result, Mr. Musk will have the power to control the outcome of matters requiring shareholder approval, including election of all our directors.”

SpaceX intends to rely on “controlled company” exemptions from Nasdaq’s governance requirements; no requirement for a majority-independent board, no requirement for a fully independent comp or nominating committee.

You’re buying an economic stake in a company where the governance outcome of every shareholder vote has already been decided. This is disclosed, in plain English, on page one of the prospectus. I would say read it before your compliance officer does, but given the entire street worked on the IPO, it’s probably on every restricted list anyways.

The Bottom Line
I didn’t get through all nine Star Wars movies - my bad - but also the last 3 should hardly count, what a way to kill a franchise… kind of like merging a social media and AI company into a profitable infrastructure business.

Stripping out xAI, you have one of the best infrastructure businesses built in the last two decades.

Starlink is genuinely extraordinary, and the launch business is operationally unmatched. Together they generated roughly $3.8 billion in combined operating income in 2025 before the AI segment consumed all of it.

Add xAI back in and you get: a $14 billion cash burn, a social media platform, an AI model that is growing at 22% in a market where competitors are growing at 300–1,000%, and a vision for orbital computing that is compelling and not yet real.

At $1.75 trillion, you are paying full price for what exists and a significant premium for what Musk says comes next. The historical record on that: Falcon 9 took longer and cost more than the original plan. Starlink took longer and cost more than the original plan. Tesla nearly went bankrupt. They all eventually worked.

Whether that pattern holds at 94x revenue is a question for your IC.