Space Exploration Technologies, known simply as SpaceX, became a publicly traded company on Friday, nearly a quarter-century after its founding.
The company began trading on New York City’s Nasdaq exchange at $135 a share, valuing SpaceX at about $1.8 trillion. By the end of the trading day, the company’s stock sold for $160.95, a significant increase of over 19%.
On paper, SpaceX founder Elon Musk became the world’s first trillionaire, with his personal stake in the company worth more than $700 billion. Thanks to the company’s stock option plan, thousands of current and former employees became millionaires overnight. SpaceX employees have put in remarkable efforts over the past 24 years, and now they will be rewarded handsomely for their accomplishments.
SpaceX currently stands as one of the few most valuable companies in the world. Should it be? There is wide disagreement over whether SpaceX is fool’s money with its sky-high valuation or represents a valuable opportunity to ultimately own part of a dominant space company that could one day command the orbital data center business.
SpaceX is now primarily an AI company
One thing is clear: SpaceX is currently the subject of significant disclosures and will have more business in the public domain in the future. Musk retains full autonomy in terms of ownership and voting rights, but will now benefit from shareholders in a very important respect: the price of his company’s stock.
Most shareholders bought SpaceX stock today, not to participate in the company’s long-term plans to settle Mars or help NASA land humans on the moon. Indeed, some space enthusiasts did. However, most people invest in stocks to make money.
But as SpaceX made clear in its S-1 filing in May, the company’s value doesn’t lie in its “space-ready solutions” or its Starlink internet constellation. The company believes these account for less than 7% of its value as part of its “total addressable market.”
Rather, Musk and SpaceX believe much of its value lies in providing AI services, primarily from space, and primarily for enterprise applications. If investors agree that’s where the bulk of the company’s profits are, they’ll want SpaceX to devote time and resources there.
