A market for SpaceX equivalent to the gross domestic product of the United States
If you are a fool and have money to lose, please, you are hereby warned. (No point in sharing this on the antisocial hate channel X unless you want to be banned by the world’s richest person Elon Musk forever)
Several media outlets that usually praise everything Musk does are now sending out warnings. Investors are warned against “absurd” valuations and a structure that gives the billionaire absolute control forever.
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In over 300 pages of IPO documents that Elon Musk’s SpaceX laid out a few days ago, there are two figures worth noting: $28.5 and $85 trillion. Both are pure fantasy.
The first number is what Musk himself identifies as the largest “addressable market in human history” – measured in dollars – for SpaceX products. This is roughly equivalent to the GDP of the United States (USD 30,615,743,000,000 in 2025). Over 90 percent of this is said to come from the sale of AI infrastructure and enterprise applications – despite the fact that SpaceX currently derives almost all of its revenue from space services and Starlink. The company’s AI segment posted a loss of $6.4 billion last year, and is considered a laggard in the race to build computing power.
“The SpaceX valuation feels absurdly high to me,” says James Carthew, co-founder of QuotedData. “It takes so many violent claims to support the proposed valuation of $1.75 trillion that I struggle to imagine where the upside will come from.
Musk always has 85 percent of the voting control
The second number – 85 – is the percentage of voice control Musk has in SpaceX. Again, just like the last rocket launch (conveniently delayed due to a hydraulic stick failure), this should have been shelved. The reality is that Musk’s control is absolute. Without him, there is no SpaceX (unless you count Gwynne Shotwell, who runs the day-to-day operations).
“It is a right for the B shareholders – in practice Musk – to appoint 51 percent of the board forever, as long as there is a single B share existing anywhere,” explains a corporate governance expert who knows the company. “Even though he had sold himself down to nothing… Elon only needs to hold on to one stock to have absolute control.
A government nightmare – and the end of shareholder democracy?
Traditionally, the point of an IPO – especially for this year’s capital-intensive “mega-violation” of SpaceX, OpenAI and Anthropic – has been to raise a wall of new cash. It will also provide greater accountability to investors. However, Musk has always been different.
The structure proposed in the SpaceX prospectus is at best a government nightmare – and at worst the death knell for shareholder democracy.
Single-vote shareholders will be forced to pursue legal disputes through private arbitration rather than the courts. The requirement to appoint independent members to board committees will be removed. The company’s CEO, chief technology officer and chairman can’t be fired – and is facing a remuneration package potentially worth $1 trillion, depending on him delivering one million computing centers in space. SpaceX currently has zero.
Small savers rejoice – institutions must choose
“So be it!” exclaims Musk’s following of loyal small savers, who have been rewarded for their unconditional faith with an unprecedented allocation of 30 percent of the first stock exchanges. (And many with direct payment for juggling in the media)
Small savers’ participation in the US stock market has skyrocketed in recent years – from 15 percent of daily stock trading volume in 2020 to 37 percent now. At the same time, there has been a historic increase in two-class stock structures, which allow entrepreneurs to retain control of companies even after they have sold out to the public.
“Small savers look at the success of these tech-bros, and they think: That’s what I want to be. So I will tolerate a more authoritarian system,” says Iain MacNeil, professor of commercial law at the University of Glasgow.
But institutional investors – including in the UK – still have to decide whether they can hold their noses. Scottish Mortgage, the UK’s largest investment pledge and a FTSE 100 company managed by Baillie Gifford, is one investor who is part of the journey. Between 2018 and 2021, it bought $200 million worth of SpaceX shares, which at its proposed market valuation has a paper value of nearly £3 billion.
That’s a potentially huge win for hundreds of thousands of ISA investors. But in order to realise it, the fund must sell before the market does. If, as reported, SpaceX insiders are allowed to sell immediately through an exemption from the standard 180-day lock-up period – and institutional investors like Scottish Mortgage don’t get it – the timing will be tricky.
“You are completely dependent on the ‘bigger idiots theory’
“They will not pay dividends, at least not in the foreseeable future. So the only reason you’re buying this as an investor is because you think you’ll be able to sell for more in the future,” explains the corporate governance expert.
“You are completely dependent on the ‘bigger idiots theory’.
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