4 Reasons I'm Not Touching SpaceX's IPO

SpaceX is set to IPO on June 12 at a $1.77 trillion valuation, implying roughly 95x 2025 sales and potentially more than 100x sales at debut. The article argues the company remains unprofitable because $6.36 billion of AI operating losses in 2025 and $2.47 billion in Q1 2026 more than offset Starlink profits, while the IPO’s low float and 82% voting control for Elon Musk increase meme-stock risk. It concludes Rocket Lab and AST SpaceMobile offer better risk-adjusted exposure to the space theme.

Analysis

The setup is less about SpaceX as a standalone asset and more about a near-term liquidity event that can siphon speculative capital away from the entire private-space complex. A low-float IPO with heavy retail access usually creates an initial momentum bid, but that bid is fragile when the first realistic valuation anchor is a very high sales multiple and the company has no clean path to earnings inflection in the next few quarters. The second-order effect is that public comparables in adjacent names can temporarily de-rate if investors rotate into the new issue and then reassess what is actually monetizing versus what is still “story premium.”

The more interesting implication is that the market may be misreading the quality of earnings inside the space theme. Businesses with clearer capital discipline and nearer-term operating leverage should command the relative multiple premium once the IPO excitement fades. ASTS is the cleaner beneficiary on a theme basis because its direct-to-device narrative is easier to underwrite as a category winner without the distraction of an adjacent money sink; however, it still carries execution risk around constellation deployment and customer adoption timing, so any rerating is likely to happen in steps rather than a straight line.

The bearish consensus on the IPO itself may still be underestimating how long retail can keep a low-float name inflated, especially if insiders are locked and float remains scarce. That said, the more durable trade is not to short the first pop blindly, but to wait for the post-debut supply overhang and then fade the multiple once the market has to reconcile hype with cash burn. If the IPO rips 20%+ on day one, the asymmetric risk shifts toward a 1-3 month mean reversion once early flippers and momentum funds rebalance.

Key Decisions for Investors

• Avoid chasing the IPO in the first 48 hours; if it gaps sharply on debut, look to fade the move only after confirming post-listing volume starts to decay and borrow becomes available, with a 1-3 month horizon.
• Relative-value long ASTS vs. short the new issue on a basket-adjusted basis if the IPO trades at a materially richer sales multiple; thesis: ASTS offers cleaner thematic exposure and less earnings contamination from unrelated loss-making segments.
• If you want exposure to space beta, prefer ASTS over event-driven IPO exposure, but size modestly and use a 3-6 month horizon because execution milestones, not narrative, will drive rerating.
• Use call spreads rather than outright longs if speculating on a continued post-IPO squeeze; the low-float setup can work for days, but implied volatility will likely crush faster than fundamentals improve.
• Set a watchpoint for 30-60 days post-IPO: if the stock is still >80x sales without a clear path to operating leverage, initiate or add to a short/underweight on any secondary-rally strength.