SpaceX cuts IPO valuation by $200 billion

SpaceX has reduced its IPO valuation targets by $200 billion, according to The Globe and Mail. The company is now targeting a valuation of nearly two trillion dollars – still an astronomical sum that raises questions about its foundation.

The reduction comes at a time when market expectations around the SpaceX stock market debut are unprecedentedly high. A stock market expert with 40 years of market experience calls it "probably the most popular IPO of all time", according to BNN Bloomberg. Demand for shares is likely to be enormous – index providers are relaxing their rules to include SpaceX in popular funds such as the S&P 500 or Nasdaq-100 just five trading days after the IPO. This means that millions of 401(k) savers and ETF investors could automatically receive SpaceX shares.

Analysts warn of unrealistic valuations

However, analysts are warning against euphoria. Le Monde questions the "unrealistic projects" on which the valuation is based. The valuation assumes that SpaceX will profitably implement ambitious goals such as Starship missions to Mars or large-scale satellite internet services in the foreseeable future. Whether these projects will generate returns for investors within the relevant time horizon remains open.

In parallel, market observers are comparing SpaceX with competitors such as Rocket Lab to put the relative valuation into perspective. The Independent asks whether the IPO represents a "stellar opportunity" or an "investing misfire" – the answer depends on how realistic the business plans are and how quickly SpaceX can implement them.