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Elon Musk\u2019s SpaceX IPO is a mere week away, with the space company aiming to raise a whopping $75 billion at an astronomical valuation of $1.78 trillion.<\/p>\n
The company\u2019s top priority has historically been to get humanity settled on Mars, making it an interplanetary species. But now Musk has unexpectedly merged it <\/a>with his AI startup xAI to focus on space-based data centers<\/a>, an extremely costly and potentially fruitless distraction. The majority of the post-merger company\u2019s expenses are now tied up in burning cash for xAI \u2014 leaving SpaceX, which had already been burning through billions of dollars each year itself, in an even more precarious position.<\/p>\n With those more-than-lofty ambitions come some tough questions. Perhaps most glaringly, the Financial Times\u2018 Richard Waters asks in a new piece<\/a>, is whether SpaceX will be able to justify its unprecedented valuation five or ten years from now.<\/p>\n Even for Musk, it\u2019s an aggressive price-to-earnings ratio that could blow up in his face if investors start to lose faith. The conversation surrounding plans for shorting SpaceX<\/a> is hitting a fever pitch, setting the stage for what could be a wild stock market ride.<\/p>\n Adding to the drama is that now that SpaceX has transformed into an AI company, analysts are becoming antsy that the massive IPO, alongside OpenAI and Anthropic\u2019s, could place even more strain on an already bloated Wall Street. Could its stock market debut be the straw that broke the camel\u2019s back, bursting the bubble<\/a> by dissipating all of that pent-up excitement?<\/p>\n If Musk\u2019s EV maker Tesla is anything to go by, SpaceX\u2019s business fundamentals likely won\u2019t be a major factor. Tesla\u2019s sky-high valuation has long been propped up by promises of a humanoid robot and autonomous driving-filled future, while the company\u2019s actual revenue has lagged far behind.<\/p>\n Meanwhile, SpaceX has relied heavily on its satellite communications network for revenue, a business that has only started to make a dent in its enormous expenditures. The company also remains heavily reliant on lucrative government contracts.<\/p>\n Musk\u2019s other money pit, X-formerly-Twitter and xAI, has also been blended into SpaceX, making for an even more explosive mix if things were to go south.<\/p>\n Put it all together, and SpaceX\u2019s IPO is unlikely to change the fact that Musk isn\u2019t selling a money-making proposition to retail investors \u2014 it\u2019s a dream of a distant future that simply doesn\u2019t exist yet. Experts remain skeptical<\/a> of the concept of orbital centers, tech that remains entirely unproven.<\/p>\n \u201cSpaceX\u2019s rockets and satellite communications network, like Tesla\u2019s electric cars, are certainly impressive achievements,\u201d Waters wrote in his piece. \u201cBut Musk\u2019s real genius lies in mythmaking.\u201d<\/p>\n