SpaceX seen as make-or-break test for mega IPOs

The global IPO market has needed a win for years and Elon Musk’s SpaceX could be the breakthrough. The last company to make a market debut at over a trillion dollar valuation was Saudi Aramco (2223.SE) in 2019.

An over “trillion-dollar” valuation, a CEO with a cult-like retail following and exposure to a ​high-growth industry – SpaceX has the elements the IPO market has sought to end a years-long drought in mega-deals.

But whether investors have the appetite ‌for a listing of this size remains uncertain. Besides, the company is so unique that its success could have limited spillover on broader market sentiment, analysts and experts said.

“It’s either a bellwether or a harbinger,” Brian Jacobsen, chief economic strategist at Annex Wealth Management, told Reuters.

He added that there is enough enthusiasm around the business to attract investor interest, but it might be so ​singular, with its celebrity CEO, that it could actually hurt other space stocks rather than lift them by attracting all the attention.

Here are some ​charts that show the market’s current status and SpaceX IPO’s potential:

WORLD’S BIGGEST IPO ON THE HORIZON

The rocket startup has confidentially filed ⁠for a blockbuster listing, looking to raise $50 billion or more, which could value it at $1.75 trillion, potentially dethroning oil giant Saudi Aramco as the world’s largest IPO.

“SpaceX ​will be far and away the largest IPO in history at the sizes being discussed now,” said Samuel Kerr, global head of equity capital markets at deals data ​provider Mergermarket.

“It will be a real test for public market capacity at a time of real market turmoil. But if any business can list in this market, its probably SpaceX given the tremendous hype.”

PIVOTAL TEST SpaceX’s listing could serve as a bellwether for the IPO market. A strong reception would indicate that a long-awaited recovery in big-ticket deals is finally underway.

Years of volatile markets, driven ​by rising interest rates, inflation concerns and geopolitical tensions, kept issuers waiting, even as the pipeline got bigger. The industry is hoping that 2026 will finally see ​a broad resurgence in market debuts.

“A successful SpaceX listing could well act as a catalyst for other large-scale IPOs,” Kat Liu, vice president at IPO research firm IPOX.

“It would demonstrate that ‌public markets ⁠have both the depth and appetite to accommodate sizeable, high-valuation offerings, and could help validate current late-stage private market pricing.”

TRILLION DOLLAR CLUB

Several high-profile startups, including SpaceX, ChatGPT-maker OpenAI and TikTok parent ByteDance, have blurred the line between private and public companies, with valuations that rival those of top-tier S&P 500 firms.

SpaceX’s listing will put it in the league of mega-cap giants such as Microsoft and Apple that draw the lion’s share of both retail and institutional investor flows.

Elon Musk said in February that SpaceX ​had acquired his artificial intelligence startup xAI ​in a record-setting deal. The transaction ⁠valued SpaceX at $1 trillion and xAI at $250 billion, Reuters reported, citing a source.

“The recent xAI fold-in allows him (Musk) to bundle launch, Starlink, and AI into a single, scarce mega story that can support a richer valuation than the businesses might achieve ​separately,” said Minmo Gahng, assistant professor of finance at Cornell University.

SpaceX generated about $8 billion in profit on $15 billion to $16 billion ​of revenue last year, ⁠Reuters reported in January, citing people familiar with the matter.

CURRENT STATE OF PLAY

An index tracking major listings has underperformed the equities benchmark over the past 12 months.

Analysts say a successful SpaceX debut could help reopen the window for large, long-delayed listings, particularly in capital-intensive sectors that have struggled to attract public market investors.

Though some have taken a more cautious ⁠view of ​the broader market’s prospects.

“(SpaceX) could take up so much capacity that other mega issuers might choose to ​hold off not to test the same window,” Mergermarket’s Kerr said.