Musk’s “One-Man Empire” Rings the Bell on June 12

By Su Yang

Edited by Xu Qingyang

On May 20, local U.S. time, SpaceX officially filed its S-1 registration statement with the U.S. Securities and Exchange Commission (SEC), formally launching its initial public offering (IPO) on the Nasdaq under the ticker symbol “SPCX.” The company aims to raise $70–80 billion through this IPO, targeting a valuation of $1.75–2 trillion. Its Nasdaq listing is scheduled for June 12.

This will be the largest IPO in human history—and Elon Musk’s first public-market debut with absolute control. Post-IPO, Musk will retain 85.1% of voting power, leaving public shareholders with virtually no voice.

As early as April 1, SpaceX confidentially submitted a draft S-1 registration statement to the SEC under the internal codename “Project Apex”—the first formal legal step in the IPO process.

According to the prospectus, Goldman Sachs leads the underwriting syndicate, joined by Morgan Stanley, Bank of America, and 16 other underwriters.

The filing also marks the first time SpaceX has publicly disclosed its financials—revealing that Starlink is its cash cow, xAI its money pit, and that Musk has effectively rebranded a spaceflight company into an “AI + Space” super-narrative. So: what justifies a $2 trillion valuation?

01 Starlink Generates $11.4B Annually; AI Unit Loses $6.4B Quarterly

SpaceX’s financials present a stark “fire-and-ice” dichotomy.

SpaceX Key Financial Data

In fiscal year 2025, SpaceX reported consolidated revenue of $18.67 billion and adjusted EBITDA of $6.584 billion—but incurred an operating loss of $2.589 billion and a net loss of nearly $4.94 billion. Nearly all losses stemmed from its AI business: xAI lost $6.4 billion in 2025, while Starlink generated $4.4 billion in operating profit during the same period. Revenue earned in orbit was entirely consumed by terrestrial large-language model spending.

In Q1 2026, the company posted $4.694 billion in revenue, $1.127 billion in adjusted EBITDA, and an operating loss of $1.943 billion.

By segment, connectivity (i.e., Starlink) contributed $3.26 billion—nearly 70% of total revenue—and remains the clear driver; AI (xAI) generated $818 million; and space operations (including rocket launches and government contracts) brought in $619 million.

SpaceX Core Business Financial Data

On the balance sheet, as of March 31, 2026, SpaceX held $15.9 billion in cash and cash equivalents and $7.8 billion in marketable securities. Total assets stood at $102.1 billion; total liabilities, $60.5 billion—including approximately $30.3 billion in debt and finance leases.

Even with over $10 billion in cash on hand, the company faces immense cash-flow pressure given annual capital expenditures exceeding $20 billion.

Starlink’s operational metrics are equally staggering.

SpaceX Space Business Highlights

Per the prospectus, Starlink had 10.3 million users as of March 31, 2026—up from 8.9 million at year-end 2025, representing a net quarterly addition of 1.4 million users. Approximately 9,600 satellites were in orbit, and Starlink’s adjusted EBITDA reached $7.2 billion, yielding an EBITDA margin of 63%—a 22-percentage-point improvement over 41% in 2023. Its free cash flow totaled ~$3 billion, making it SpaceX’s sole positive-cash-flow business unit.

However, Starlink’s average monthly revenue per user (ARPU) fell from $99 in 2023 to $81 in 2025, then further declined to $66 in Q1 2026—a drop of over 33% in two and a half years.

This reflects a classic price-for-scale strategy: SpaceX deliberately lowered prices to accelerate user growth—but larger scale has paradoxically reduced per-user monetization. If ARPU continues declining, user growth must consistently outpace price erosion to meet long-term revenue targets.

SpaceX’s 2025 capital expenditures totaled $20.7 billion—exceeding its full-year revenue—with $12.7 billion spent by the AI division alone, surpassing the combined total for aerospace and satellite operations.

SpaceX Capital Expenditures and Cash Flow

xAI burns roughly $1 billion per month—~$14 billion annually. For context, OpenAI and Anthropic spent ~$9 billion and ~$4 billion respectively in 2025. SpaceX’s AI division alone outspends both combined. While its burn rate is aggressive, xAI lags far behind both peers in revenue scale and growth.

More telling is the valuation multiple.

SpaceX’s target IPO valuation of $1.75–2 trillion implies an EBITDA multiple of ~266x. By comparison, Meta trades at 16x, Alphabet at 25x, NVIDIA at 36x—and even Tesla, known for premium valuations, trades at only 119x.

Listing at more than double Tesla’s multiple, SpaceX faces an immediate market test: Is this value discovery—or bubble narrative?

The prospectus explicitly states: “We do not anticipate paying dividends to Class A stockholders in the foreseeable future.” Investors thus have only one bet: share-price appreciation. This is a pure growth stock—with no safety net.

02 85% Voting Power: Musk’s “One-Man Empire”

SpaceX employs a dual-class share structure. Class A common stock (1 vote per share) is offered to public investors; Class B common stock (10 votes per share) is held exclusively by Musk and insiders.

Management and Director Shareholdings

Per the prospectus, Musk holds ~42.5% of SpaceX’s equity but controls ~84–85.1% of total voting power via his Class B shares. Post-IPO, no matter how many shares public investors buy, Musk alone will determine board composition, major M&A, and even charter amendments.

The prospectus further discloses that Musk will continue serving as CEO, CTO, and Chairman of the Board—and retains unilateral authority to appoint or remove Class B directors. SpaceX will also seek “controlled company” exemptions, freeing it from requirements mandating majority-independent boards.

Beyond Musk, no other shareholder holds >5%. Yet the roster includes prominent institutions: Alphabet (Google’s parent), an early strategic investor, currently holds ~5%; Fidelity Investments, ~2%; Silicon Valley VCs Valor Equity Partners, Founders Fund, and Sequoia Capital collectively hold ~10%; plus hedge funds D1 Capital and Darsana, and Middle Eastern sovereign wealth funds. SpaceX has also established a substantial employee stock option pool to incentivize core technical talent.

Dual-class structures are common in Silicon Valley. Per Fenwick’s 2025 Corporate Governance Survey, 27.3% of the top 150 Silicon Valley tech companies maintain such structures—far exceeding the 10.1% among S&P 100 constituents. But designs vary widely.

SpaceX pushes this control mechanism to unprecedented extremes—concentrating 85% of voting power in one person—making it uniquely conspicuous among tech giants.

Compare this to Musk’s other public company, Tesla, where “one share, one vote” applies—no super-voting rights—forcing Musk to regularly confront activist shareholder challenges.

03 xAI Merger: The “Narrative Engine” Behind the $2.5T Valuation

The “COLOSSUS II” Facility in Memphis, Tennessee

In February, SpaceX acquired xAI at a $1.25 trillion enterprise valuation, assigning xAI a standalone value of $25 billion. Pre-merger, SpaceX’s independent valuation stood at ~$1 trillion—meaning the AI story added ~$25 billion in premium.

This deal delivered two immediate effects: (1) incremental revenue—AI contributed $818 million in Q1 2026; and (2) narrative elevation—SpaceX transformed from a “space company” into an “AI + Space” hybrid.

Wall Street’s valuation expectations for SpaceX subsequently rose from $1.25 trillion to $1.75–2 trillion.

The prospectus also reveals even more ambitious long-term plans: deploying the first orbital AI compute pods before decade’s end—to run AI infrastructure in space.

xAI Business Highlights

Musk contends that producing AI compute in space is cheaper than on Earth.

Meanwhile, SpaceX mentions “space mining”—extracting metals from near-Earth asteroids. These initiatives generate zero revenue today—not even functional prototypes exist—yet they constitute the most compelling (and valuation-divisive) pages of the prospectus.

04 Terafab, Cursor Acquisition & Financial Services: Musk’s “Ecosystem Synergy”

The prospectus also hints at several easily overlooked initiatives.

Among them: the Terafab project, jointly announced by SpaceX and Tesla, aims to vertically integrate semiconductor manufacturing across all stages—producing two chip types: (1) edge inference processors optimized for Tesla’s Full Self-Driving system, Optimus humanoid robots, and Robotaxi fleets; and (2) radiation-hardened, high-power space chips.

Public sources indicate total investment could reach up to $119 billion, using Intel’s 14A process node, with 80% of compute capacity earmarked for orbital AI data centers.

Additionally, SpaceX plans to acquire Cursor post-IPO using Class A common stock as consideration, implying an equity value of $60 billion. SpaceX has secured an exclusive option to acquire Cursor at this $60 billion valuation, exercisable 30 days after IPO completion—with a reverse breakup fee of $10 billion. Several key Cursor engineering team members have already joined xAI.

The company also plans to launch a financial product suite covering payments, banking, and other services—extending into financial services.

These ventures share three traits: all remain in early stages; all demand massive capital; and all hinge on SpaceX’s fundraising prowess and Musk’s narrative mastery.

05 Market Divide: Underwriter All-Star Cast vs. Skeptics

The underwriter lineup itself signals unexpected tension—reflecting Wall Street’s deep divide.

Morgan Stanley, long Musk’s close partner (having led Tesla’s IPO and Twitter’s acquisition financing), was edged out of lead underwriter status by Goldman Sachs—a surprise to many market observers.

Jay Ritter, University of Florida professor and “IPO Professor,” stated plainly: if SpaceX achieves a $2 trillion valuation, he would short its stock upon listing. He added that new issues with inflation-adjusted revenue >$100 million and price-to-sales ratios >40x have, on average, significantly underperformed the broader market over three years post-listing.

Larger concerns center on AI losses: xAI’s $6.4 billion loss in 2025 completely eclipsed Starlink’s $4.4 billion profit. If AI continues burning cash without meeting commercialization expectations, SpaceX’s overall profitability pressure will intensify sharply.

BNP Paribas analyst James Picariello bluntly noted that SpaceX’s IPO will “fracture” Musk’s retail investor base—and exert downward pressure on Tesla’s stock price.

UBS analyst Joseph Spak cautioned clients earlier that SpaceX’s heavy hardware-AI investments may only be the beginning. Meanwhile, Musk’s concurrent leadership of Tesla, SpaceX, xAI, and X raises persistent questions among institutional investors about managerial bandwidth and focus.

06 Conclusion

June 12 will serve as a global referendum on the “Musk premium.”

Starlink delivers a solid cash cow; xAI delivers sizzling narrative; Musk delivers absolute control. The upside is ultra-efficient decision-making—the downside is no brakes.

Goldman Sachs calls this IPO “a once-in-a-generation opportunity.” Others liken it to buying a lottery ticket—the grand prize: Mars; the consolation prize: Earth.

Cook handed Apple to Tim Cook, a hardware engineer by training. Musk has no intention of handing SpaceX to anyone—listing merely adds a cohort of passengers without voting rights. The cockpit remains occupied by one person only.

How to put it? Very Musk.