Key Points
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SpaceX is set to be included in the S&P 500 and Nasdaq-100 following its IPO.
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The company, led by CEO Elon Musk, is targeting a valuation of $2 trillion despite not being GAAP profitable.
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SpaceX’s initial weight in the S&P 500 could be around 0.14% if it raises approximately $80 billion during its IPO.
SpaceX is poised to become the largest IPO in history after Elon Musk successfully sought inclusion in the S&P 500 and Nasdaq-100 by relaxing traditional admission standards. Currently, SpaceX is unprofitable and anticipated to retain a majority of its shares in private hands post-IPO, as Musk owns 85% of the company. This situation may lead to index funds buying SpaceX at potentially inflated prices.
If SpaceX reaches its targeted market cap of $2 trillion, it would have a price-to-sales ratio of around 100 and could face significant challenges in achieving profitability despite owning the profitable Starlink business. Analysts suggest the valuation may be overstated compared to an estimated value of $780 billion by Morningstar.
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