Hi Awhahaw,
On 12 June, SpaceX is expected to debut on the Nasdaq in what could be the largest public market debut in history, valued at around $1.75 trillion, raising up to $86 billion. It's one of the most significant market events of the year.
What's really behind the valuation
Founded by Elon Musk in 2002, SpaceX has transformed the aerospace industry with reusable rockets (Falcon 9), crewed missions to the International Space Station (Crew Dragon) and Starlink, the world's largest satellite internet constellation.
But at the heart of the story is Starlink: 69% of last quarter's revenue, solid operating margins, and a base of over 10 million subscribers across more than 150 countries. It's the division that turns SpaceX from a launch company (costly, with thin margins) into a connectivity platform with stable, recurring revenue. A real competitive advantage, built over years of investment.
American Airlines has chosen Starlink for in-flight Wi-Fi. These types of agreements with large corporate clients provide recurring, stable revenue streams and typically offer higher margins than the consumer market alone, strengthening the quality of revenue over time.
The questions worth asking
As with any major IPO (Initial Public Offering), the crucial question isn't whether the company is exceptional, it's whether today's price is justified by its long-term prospects. It's the same debate that accompanied Facebook's market debut in 2012. Back then, a valuation of more than $100 billion seemed excessive to many. In hindsight, that assessment looks rather different.
The current valuation already prices in years of future growth, including the company's Artificial Intelligence (AI) activities, which have yet to prove their commercial potential. Buying today means betting that everything goes to plan. Independent analysts are divided: some see significant room for further growth, others believe expectations are already fully reflected in the price.
Elon Musk will retain over 80% of voting rights post-IPO. Investors are buying exposure to the company, knowing that strategic decisions will remain firmly in the hands of its founder.
What changes in your portfolio
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Our portfolios invest primarily through ETFs tracking major equity indices. SpaceX is not yet included in any of them and entry into the S&P 500 will take at least a year, following Friday's confirmation that S&P will keep its criteria unchanged. Inclusion in the Nasdaq-100 could happen as early as the end of June.
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In the near term, the direct impact on portfolios is likely to be limited. However, we are closely monitoring how the market absorbs this listing, as well as the next wave of potential market debuts. Companies such as OpenAI and Anthropic could also move towards public markets in the coming months. As always, if we believe portfolio changes are warranted, we will act accordingly.
Our takeaway
SpaceX is a fascinating case: a company with solid fundamentals, listing at a price that already reflects high expectations. With managed investing, you can watch stories like this unfold with genuine interest, knowing your portfolio is being monitored and managed by our team.
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