SpaceX IPO expected next month with potential $2 trillion valuation
SpaceX's highly anticipated initial public offering, expected next month, could value the company at up to $2 trillion, according to venture capitalist and MIT research fellow Paul Kedrosky. The S&P 500 is considering rule changes to fast-track inclusion of the company into its benchmark index, including eliminating profitability and float requirements. Critics say the changes unfairly benefit large issuers, while supporters argue they reflect market realities.
SpaceX's initial public offering, expected next month, could value the company at up to $2 trillion, according to venture capitalist and MIT research fellow Paul Kedrosky. The IPO would mark the arrival of a new AI era for public markets, Kedrosky said, estimating that upcoming IPOs from OpenAI and Anthropic could collectively add $5 trillion in market value. He described the new stocks as hitting the markets "like a tsunami," triggering an enormous wave of demand that will pull money out of other assets.
The S&P 500 is considering rule changes to fast-track SpaceX's inclusion into its benchmark index, which would guarantee demand from index funds. The three proposed changes, aimed at companies the S&P calls "MegaCaps" — those within the top 100 largest by market capitalization — would eliminate the profitability requirement, cut the 12-month waiting period to six months, and eliminate the requirement that a company offer at least 10% of its stock to the public. SpaceX reportedly will have just a 5% float. The deadline for the proposed changes is May 28; if approved, they would take effect before the market opens on June 8, presumably ahead of the IPO.
Critics argue the changes unfairly benefit large issuers. "The rules are being rewritten to benefit IPO issuers and early-stage insiders, and your capital is the tool being USED to enrich them," wrote long-time investor George Noble on Substack. Wall Street Journal columnist James Mackintosh called the proposal "egregious," saying it acknowledges different rules for big companies. Supporters counter that the indexes are adapting to market realities. "Investors want indexes to be representative of the market," said Jay Ritter, director of the IPO initiative at the Warrington College of Business at the University of Florida. "These companies likely would be included sooner or later unless they totally collapse, so it's mainly a question of timing."
Nasdaq has already changed its rules to fast-track SpaceX onto the Nasdaq 100 index, which features the biggest tech companies. Ritter noted that in the 1980s and 1990s, most companies that went public were profitable, but in this century most have not been. "Some of these rules were decided on many decades ago, when the world was a bit different from now," he said.