From 10% chance of success to $2 trillion: SpaceX’s historic IPO

Shortly before the opening of Nasdaq trading on Friday, Elon Musk stepped in front of a cheerful crowd at SpaceX’s company town in Texas. His rocket maker was about to hit the public market at a valuation of around $2 trillion, instantly becoming the sixth most-valuable U.S. company.

Musk, weeks shy of his 55th birthday, told staffers that, in the early days of the company, he gave it “less than 10% chance of succeeding.”

“If people had told me this was going to happen, I was like, man, you must be smoking some really good crack,” said Musk, who founded SpaceX in 2002 and has grown it to 22,000 full-time employees. “Because I think this company is going to fail.”

Musk is now the world’s first trillionaire after his company pulled off the largest IPO on record, raising $75 billion, an amount roughly triple size of the next-biggest U.S. offering, which was Alibaba’s in 2014. There are 10 U.S. companies worth at least $1 trillion. Musk runs two of them.

Whatever uncertainty Musk professed to have felt when SpaceX was getting off the ground, he showed none of that in the days leading up to the IPO. In an abbreviated roadshow, SpaceX priced its IPO at $135 and told investors to take it or leave it. There was no price range used to gauge demand and no haggling with prospective shareholders.

That’s despite SpaceX having a fraction the revenue of any of tech’s megacaps and racking up a $4.9 billion loss last year. After the stock’s close on Friday, SpaceX was worth $2.1 trillion, giving it a multiple of 112 times last year’s revenue.

“This was not a deal that was priced based on market forces,” said Lloyd Greif, an investment banker with Greif & Co. in Los Angeles. “This was a deal based on what one man wanted. And when one man wants it, one man gets it, if that one man is Elon Musk.”

Meanwhile, all of those mentions of trillions and the trillionaire added fuel to the discourse surrounding wealth disparity as consumers deal with crippling inflation due largely to the war in Iran. Sen. Bernie Sanders of Vermont, a self-proclaimed Democratic Socialist, wrote on social media that Musk’s new status is a “call to action to take on the unprecedented income and wealth inequality that now exists.” And California Democratic Governor Gavin Newsom wrote on X, which is owned by SpaceX, that, “Americans are struggling to pay for groceries and gas while Elon Musk becomes a TRILLIONAIRE.”

None of that dampened the mood on Wall Street, which has been desperate to see new offerings after a historically slow period of IPOs dating back to late 2021. In closing the day up 19% and consistently holding well above the offer price, SpaceX’s IPO lifted confidence in potential deals later this year from artificial intelligence model giants OpenAI and Anthropic, which are each valued at close to $1…