Space Exploration Technologies, known simply as SpaceX, became a publicly traded company on Friday, nearly a quarter century after its founding.
The company began trading on the Nasdaq exchange in New York City at $135 per share, valuing SpaceX at approximately $1.8 trillion. By the end of the trading day the company’s shares were selling at $160.95, a respectable increase of more than 19 percent.
On paper, SpaceX founder Elon Musk became the world’s first trillionaire, with his personal stake in the company valued at more than $700 billion. Due to the company’s stock option plan, thousands of current and former employees became millionaires overnight. SpaceX employees have worked remarkably hard over the past 24 years, and now they will be richly compensated for doing so.
SpaceX is now one of the some of the most valuable companies in the world. should it be? There is wide disagreement about whether SpaceX is fool’s gold with its sky-high valuation, or represents a valuable opportunity to ultimately own a portion of a major space company that could someday take over the business of data centers in orbit.
SpaceX is now largely an AI company
One thing is clear: SpaceX is now subject to significant public disclosures, and it will keep much of its business in the public eye. Although Musk retains full autonomy in terms of ownership and voting rights, he will now be beholden to shareholders in a very important way: the price of his company’s stock.
Most shareholders buy SpaceX stock today not to be part of the company’s long-term plans to settle Mars, or to help NASA land humans on the Moon. Sure, some space enthusiasts did that. However, most people invest in stocks to make money.
As SpaceX made clear in its S-1 document filed in May, however, the company’s value does not lie in its “space-enabled solutions” or its Starlink Internet constellation. As part of its “total addressable market”, the company sees these as less than 7 percent of its value.
Rather, Musk and SpaceX see most of its value in providing AI services, mostly from space and primarily for enterprise applications. If investors agree that this is where most of the company’s profits lie, they will want to see SpaceX invest its time and resources.
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