SpaceX is going public at $135 per share, targeting a record-breaking $75 billion raise in what could be one of the largest IPOs in history. There's just one problem: most Wall Street analysts think it's worth about half that.
According to sources familiar with the offering, Elon Musk's rocket company is pricing its shares at valuations that would make even the most bullish tech investors blush. And here's the kicker—retail investors are being offered a larger-than-usual allocation in this deal, which should immediately raise red flags.
When Wall Street Rolls Out the Red Carpet for Retail, Watch Your Wallet
Let me be blunt: when investment banks suddenly get generous with retail allocations on a hot IPO, it's usually because the smart money doesn't want all of it. The elimination of the Pattern Day Trading (PDT) rule last year means retail investors can now flip shares more easily, and Wall Street knows it. They're counting on that.
The PDT rule used to require traders to maintain a $25,000 account balance to make more than three day trades in a week. Without it, retail investors can jump in and out more freely—which sounds great until you realize you're now providing liquidity for venture capitalists who want to cash out at peak prices.
The Math Doesn't Add Up
At $135 per share, SpaceX would command a valuation that implies growth rates the company hasn't demonstrated. Multiple analysts who declined to be named publicly (because they don't want to anger one of the world's richest men) put SpaceX's fair value closer to $65-70 per share based on current revenue and contracts.
To be clear, SpaceX is a real business with real revenue. The company has transformed commercial spaceflight and has lucrative NASA contracts. But that doesn't mean it's worth whatever price tag gets slapped on it during the IPO frenzy.
The VC Exit Strategy
Here's what's really happening: early investors and employees sitting on SpaceX shares want to cash out. An IPO at these prices lets them do exactly that. This isn't unique to SpaceX—it's how the IPO game works. But the scale here is staggering.
With a $75 billion raise, this would rank among the largest IPOs ever, alongside Saudi Aramco and . The difference? Those companies had proven business models at scale. SpaceX is still growing into its valuation.
