SpaceX smashes records with $75 billion IPO — now it has to win over the market

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Stablecoin firm Circle Internet Group Inc., another listing from 2025, climbed 168 per cent on its first day. It remains at roughly the same level above the IPO price.

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Companies with negative net income tend to lag by more than 10 per cent over the first 18 months after their listing compared with profitable peers, according to a Trivariate Research report last year. SpaceX had a net loss of US$4.28 billion in the first quarter of 2026.

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At least some of the price action in post-IPO trading is due to the relatively small number of shares made available. SpaceX’s IPO is an outlier even by normal standards, with roughly 4.2 per cent of its outstanding shares available to trade on day one.

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While a small float can lead to volatility for the company, some are more concerned about what happens to the broader market when insiders are able to sell more stock as so-called lock-up agreements expire.

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“The tricky part for me is as the float unlocks, how that’s absorbed over time,” said Jeremiah Buckley, a portfolio manager with Janus Henderson Investors.

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“I don’t think absorbing a $75 billion IPO is that impactful, but if we’re talking about absorbing a trillion dollars in float that needs to come from somewhere and that makes me more nervous,” Buckley said.

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Elon Musk, chief executive officer of Tesla Inc., speaks during a video interview at the Samson International Smart Mobility Summit in Tel Aviv, Israel, on Monday, May 18, 2026. Some investors think the endgame for Musk is to merge SpaceX and Tesla. Photo by Kobi Wolf /Bloomberg

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Tesla merger

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SpaceX’s early performance is likely to play an outsize role in what many investors see as Musk’s endgame — a merger with Tesla Inc., creating a long-discussed Elon Inc. that would let investors buy into a single company that combines all of the chief executive’s visions of robots, autonomous cars, AI and data centres in space in one stock.

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While nothing has been formally announced, investors pushed the company to consider a SpaceX-Tesla merger in January, Bloomberg News reported, before the xAI deal was made public. A tie-up after SpaceX’s IPO is just a matter of time, early investor Peter Diamandis told Bloomberg TV in May.

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The two companies’ businesses are already entangled. Almost one in five Cybertrucks that Tesla sold in the fourth quarter of 2025 went to SpaceX or Musk’s other firms. Some of Musk’s most ambitious projects — such as Terafab, a bid to produce semiconductors for AI development — will require Tesla and SpaceX to commit tens of billions of dollars before they can be realized.

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A Tesla-SpaceX merger looks far from assured in the medium term, Bloomberg Intelligence analyst Steve Man said in a note Wednesday.

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“Benefits from Terafab chip work, the Macrohard software development project and any Tesla role in space exploration are years away,” Man said.

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If SpaceX shares retreat in the coming weeks, it might actually help make a merger more palatable to Tesla shareholders, according to Morningstar analysts.

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“With SpaceX’s soaring valuation leading up to its IPO, we doubt Tesla shareholders would want to buy SpaceX while its valuation multiples are far higher than theirs,” they said Tuesday.

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“Though we expect some Tesla shareholders will also be keen owners of SpaceX stock, new public owners of SpaceX stock would likely not agree to such a steep discount to the IPO price unless SpaceX shares fell closer to our $63 per share fair value estimate,” the analysts said.

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With Wall Street already lining up to give SpaceX price targets of as much as US$190, the debate over Musk’s dream of making humans a multiplanetary species is about to begin.

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Goldman Sachs Group Inc., Morgan Stanley, Bank of America Corp., Citigroup Inc. and JPMorgan Chase & Co. led the deal with 18 other banks participating. The company formally known as Space Exploration Technologies Corp. will debut on Nasdaq and Nasdaq Texas Friday under the symbol SPCX.

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—With assistance from Anthony Hughes, Demetrios Pogkas, Jennah Haque, Eric Johnson and Francine Lacqua.

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