4 Reasons I'm Not Touching SpaceX's IPO

SpaceX is set to IPO on June 12 at a targeted $1.77 trillion valuation, implying roughly 95x 2025 sales and potentially more than 100x revenue at debut. The article argues the company remains unprofitable because xAI and the space division are generating billions in operating losses that outweigh Starlink’s profits, while the IPO structure leaves limited float and little shareholder control. It concludes Rocket Lab and AST SpaceMobile offer better risk-adjusted exposure to the space market.

Analysis

The first-order loser from a SpaceX IPO is not a direct competitor so much as future capital efficiency in the private space stack. A giant, hyped print at a very high multiple will temporarily lift all adjacent space names, but it also creates a harsh public-market comp set: every unprofitable or capital-intensive “space + AI” story gets discounted against a company that can command scarcity pricing and still trade on optionality. That usually hurts the second-best names most, because they inherit the same thematic ownership but without the same balance-sheet narrative or strategic control.

The more important second-order effect is positioning. A tiny float with heavy retail allocation tends to create a short-lived price dislocation, then a slower re-rating as lockup overhang and insider control become the dominant variables. That timing matters: the first 1-2 weeks can be momentum-driven, but the next 1-2 quarters are where buyers realize they own a story with limited governance, limited float, and a valuation that requires multiple years of flawless execution.

From a competitive lens, the market is likely to over-allocate to SpaceX and underwrite the entire space services TAM off one print. That can actually be useful for ASTS and RKLB if they can demonstrate cleaner unit economics, because investors seeking “space exposure” will look for liquid substitutes once the initial IPO trade gets crowded. The key is not whether the theme is real; it is whether capital rotates into the best risk-adjusted exposure after the hype fades.

The contrarian point is that the bearish case may be too early rather than wrong. Near-term upside is driven by scarcity and FOMO, while the real bearish catalyst is not poor fundamentals but the first evidence that IPO investors are monetizing, float expands, or growth decelerates even slightly versus an extreme valuation base. In other words, the best short setup is usually post-launch, not pre-launch.

Key Decisions for Investors

• Avoid chasing the IPO on day 1; if forced to express a view, wait for post-listing liquidity to build and look for a tradeable fade after the first 1-3 sessions when retail flow usually peaks.
• Long ASTS vs. short the IPO basket of speculative space names after the initial pop: ASTS has cleaner thematic exposure and less direct AI overhang, making it the better relative-value expression over 3-6 months.
• If listed liquidity is sufficient, structure a post-lockup short in SpaceX on any valuation multiple expansion that assumes flawless monetization; the risk/reward improves materially once the first earnings print and insider-sale timeline enter the market’s horizon.
• Buy RKLB on pullbacks rather than momentum: use the IPO mania to reduce entry cost, since the market may temporarily misprice all space exposure together; time horizon 6-12 months, with rerating potential if capital rotates into clearer fundamentals.
• For options traders, consider a call spread on ASTS financed by selling upside in the IPO proxy once implied volatility normalizes; this captures the likely rotation from hype to higher-quality adjacent exposure while limiting premium paid.