SpaceX is poised to make history tomorrow as it prepares for what is expected to be one of the largest initial public offerings ever undertaken, with the Elon Musk-founded company targeting a valuation of around $2 trillion.
The highly anticipated stock market debut on Friday 12 June is set to propel SpaceX into the ranks of the ten largest listed companies in the United States. Already considered a “unicorn”, a privately held firm valued at over $1 billion, SpaceX’s flotation marks a significant milestone not only for the company, but for global capital markets.
However, as investor excitement builds ahead of the listing, experts are urging caution, highlighting lessons from previous high-profile IPOs.
Dr Renzo Cordina, Senior Lecturer in Accounting and Finance at the University of Dundee’s Faculty of Science, Engineering and Business, said the conversation around SpaceX now extends far beyond its achievements in space exploration.
“SpaceX is scheduled to officially make its trading debut with an estimated company valuation of $2 trillion. Yet the discussion surrounding SpaceX is increasingly about more than rockets, satellites or even space exploration,” he said.
Cordina pointed to the wave of “unicorn” companies that emerged during the 2010s, noting that strong private market performance does not always translate into long-term success on public markets.
“One of the central lessons from the unicorn boom of the 2010s was that investors often struggled to distinguish between a private company which has been successful in the past and a future profitable investment once the firm is listed,” he explained.
He cited Uber as a cautionary example. Despite its transformative impact on the transport sector, the company’s share price fell following its stock market debut, underlining the challenges faced when high expectations meet public market scrutiny.
“Uber was undoubtedly a transformative company before it secured a stock market listing. However, rather than rewarding investors immediately after listing, the price of its shares declined,” Cordina said. “The experience served as a reminder that public markets can be less forgiving than private investors when expectations become detached from financial performance.”
While SpaceX is widely expected to benefit from a strong first day of trading, a common trend among high-profile IPOs, Cordina stressed that the real test will come in the months and years that follow.
“SpaceX may well enjoy the first-day surge that investors have come to expect from high-profile IPOs. However, the experience of Uber reminds us that the biggest challenge for unicorns is rarely the first day of trading,” he said.
“It is what happens once the excitement fades and public markets begin asking the same question they eventually asked Uber: can the valuation be justified by the underlying economics of the business?”
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As markets await the debut, SpaceX stands at a pivotal moment. Its listing could signal a new era for high-growth technology firms, or reinforce long-standing investor scepticism around ambitious valuations.
“SpaceX may prove that the next generation of unicorns is fundamentally different from those that came before,” Cordina added. “Equally, it may reveal that public markets remain just as sceptical of ambitious stories as they were when Uber first listed.”
