SpaceX IPO: Elon Musk set to become world's first trillionaire as $2.5 trillion float hits Wall Street

Elon Musk is about to become the world's first trillionaire, and more than 4,000 of his current and former employees are set to become instant millionaires.

SpaceX, Musk's reusable rocket company, will list on US markets on Friday in what is expected to be the largest initial public offering in history. The company is targeting a value of about $US1.77 trillion ($2.5 trillion).

An initial public offering (IPO) is the first time shares in a private company are made available to the public via the stock market. Following the Wall Street success of Musk's electric car company Tesla, expectations are running high for SpaceX. Investor interest is reportedly four times the planned offering, meaning the IPO has attracted up to $US250 billion of investor demand, Reuters has reported.

Owning a stake of more than 40 per cent in the company, Musk is poised to officially become the world's first trillionaire when SpaceX starts trading. He isn't the only one set to cash in. There's a long list of executives and early investors poised to make billions, while The New York Times reported that more than 4,000 current and former SpaceX employees are set to become instant millionaires.

SpaceX essentially remade the space launch industry through the successful roll-out of reusable rockets. This has structurally lowered the price of a launch, making space a viable option for a slew of new businesses. Musk anticipates the growth of a new space economy, claiming in his sales pitch to the public that SpaceX's "mission is to build the systems and technologies necessary to make life multiplanetary." The company is still unprofitable.

Before the IPO, SpaceX acquired Musk's xAI artificial intelligence company. XAI had acquired X (the former Twitter) in 2025. Now Musk wants to build solar-powered data centres in orbit, which will be able to power artificial intelligence computing. Its stated mission includes understanding "the true nature of the universe, and to extend the light of consciousness to the stars."

SpaceX expects to sell 555.6 million shares at $US135 a share; this will value the company at about $US1.8 trillion, on track to outpace the IPO of Saudi state oil company Saudi Aramco in 2019, which was valued at $US1.7 trillion. SpaceX's IPO price will value the company at nearly 100 times the company's sales.

SpaceX will trade on Nasdaq and Nasdaq, Texas (yes, Texas now has its own Nasdaq exchange). Nasdaq has shortened the amount of time a share needs to trade before being included in its indexes from three months to 15 days. Combined with the $US1.77 trillion valuation, SpaceX will be so big that it's expected to show up quickly in exchange-traded funds that mirror the composition of the Nasdaq. That means passive investors will end up holding a slice of the company and be beholden to Musk's space destiny.

Musk is keen for active investors to buy in, allotting 30 per cent of shares to retail investors. This is much higher than other IPOs, which often grant 10 or 15 per cent to retail investors. CommSec, which is selling SpaceX IPO shares in Australia, said the event would occur in AEST some time from Friday night to 6am on Saturday. "There is no exact listing time available and may be late in the trading session," it said. But if you're not in a hurry, SpaceX shares may end up as a component of an exchange-traded fund (ETF) you're already holding.

With valuation numbers so, well, astronomical, and a high listing price, there are plenty of risks. Based on assets and operations, Morningstar last week valued SpaceX at $US780 billion.

"Long-term investors will see opportunities to invest in SpaceX later with a greater margin of safety than the IPO will provide," the investment research firm said.

Others are even more sceptical. One critic from Business Insider said the heavy retail allocation was "essentially setting up retail to hold the bag after longer-term shareholders take profits." That is, some believe there's a risk that retail traders clamour to buy the shares at $US135, and watch as financial reality settles on the stock in ensuing months, after insiders can cash out. Recent mega-tech IPOs have disappointed after their initial float, such as Facebook (now Meta) in 2012, and Twitter in 2013, which rocketed on its first day of trade to $US44 but by 2016 had fallen to $US14. And yet, Musk's Tesla has risen from about $US15 in 2017 to $US360 in November 2021, with the US-Israel war on Iran helping drive shares higher, as electric vehicles get a kick.

Musk's integration of xAI into SpaceX makes the space company an artificial intelligence company too, which links its IPO to the sentiment around the burgeoning AI sector. Anthropic, which makes Claude AI and OpenAI (run by Musk foe and former collaborator Sam Altman) are also expected to go public this year, flooding investors with opportunities to plough money into AI stocks. But this feeds into emerging concerns that the AI sector is overvalued.