SpaceX heads for record $1.78tn float amid fears it is overvalued

Analysts say IPO that could make Elon Musk the world’s first trillionaire has a ‘major disconnect’ on price

Elon Musk’s SpaceX is set to launch the biggest stock market float in history amid warnings that it may be overvalued.

The space exploration, satellite broadband and AI company will join the US stock market on Friday at a valuation of $1.78tn, after offering at least $75bn of shares to investors through an initial public offering.

The offering is oversubscribed by three or four times, according to Reuters, with more than $250bn of bids from investors keen to take part in the IPO.

The $75bn share offer is nearly three times the previous record, Saudi Aramco’s $29.4bn offer when it floated in 2019. If the float goes as planned, Musk could make history as the world’s first trillionaire.

However, the investment research group Morningstar has calculated that SpaceX is worth only $63 a share – well below the anticipated IPO price of $135 – and warns there is “a major disconnect between market expectations and underlying fundamentals”.

Michael Field, the chief equity strategist at Morningstar, suggests investors should sit out the IPO and wait for “a more attractive entry point down the line”.

“We believe the business has real strengths, particularly in Starlink, but with so many unknown and untested technologies underpinning much of the valuation price, particularly within the AI business, we think the valuation is extremely speculative,” Field said.