The SpaceX IPO Just Lost $200 Billion in a Week

Just yesterday, I told you not to trust Elon Musk in the run up to the SpaceX IPO.

It wasn’t the first time… 

Years ago, I warned about his backing of Dogecoin, which I considered dubious. 

“Don’t trust breadcrumbs dropped by eccentric billionaires,” I warned at the time.

Questions about Musk’s credibility have also plagued his other main business venture, Tesla.

Likewise, it was shocking to see Musk given unfettered access to government agencies and data, including the Pentagon’s, as the head of the Department of Government Efficiency. 

That role was a clear conflict of interest considering his vast pool of government contracts.

As if all that weren’t enough, last week, we learned about the growing tension between SpaceX and the Defense Department over Starlink pricing.

And this weekend, another shoe dropped — one that seemed to confirm Monday’s assertion that SpaceX’s $1.75 trillion IPO valuation appeared badly overcooked.

Indeed, according to a Bloomberg report on Friday, SpaceX has quietly cut its target IPO valuation from north of $2 trillion to $1.8 trillion — a $200 billion haircut in a matter of days.

The roadshow for institutional investors begins this week. Pricing is set for June 11 or 12.

And the company is now scrambling to lock in a number that doesn’t immediately fall apart the moment shares begin trading.

Elon Musk took to X over the weekend to deny that the valuation had been cut at all, calling the Bloomberg story “false.” But the publication is standing by its reporting, citing multiple sources with direct knowledge of the discussions.

And anyone who’s spent more than five minutes reading the company’s S-1 prospectus can probably see why investors are pushing back.

The numbers in the filing and the governance are (true to Musk’s form) highly dubious.

And there’s at least one detail in the prospectus that I’d generously describe as misleading…

Key Takeaways From the SpaceX Prospectus

Let’s start with the financial reality.

We know that SpaceX generated $18.7 billion in combined revenue in 2025.

Starlink alone produced $11.4 billion in connectivity revenue and $4.4 billion in operating income.

And the launch business commands more than 80% of all mass put into orbit globally.

That’s all great.

But the consolidated company still reported a $4.9 billion net loss in 2025, with $2.6 billion in operating losses.

And the company’s AI infrastructure segment generated just $818 million in revenue last quarter compared with a $2.5 billion operating loss. The capital expenditure required to build out Colossus and Colossus II data centers consumed $10 billion in a single quarter.

That’s the engine that’s supposed to justify a $1.8 trillion valuation?

Doing the basic math, $1.8 trillion against $18.7 billion in revenue gives you a price-to-sales ratio of roughly 96.

For context, the historical price-to-sales threshold above which markets have consistently identified bubble valuations is 30.

And even Nvidia — the most aggressively priced company in the entire Magnificent Seven and one that’s massively profitable — trades at about 21 times sales.

SpaceX would need its valuation to fall by another $1.25 trillion just to get below that line.

Then there’s governance…

Musk owns roughly 42% of SpaceX’s equity.

Through the company’s dual-class share structure — Class B shares carry 10 votes apiece, while Class A shares carry one — he controls 85.1% of voting power.

He will serve simultaneously as CEO, CTO, and chairman after the IPO closes.

And SpaceX has formally elected to qualify as a “controlled company” under Nasdaq rules, exempting itself from requirements around independent directors and independent board committees that apply to virtually every other public company on the exchange.

In other words, public shareholders are being asked to put up nearly all the capital while receiving none of the governance rights.

The prospectus itself plainly states that the structure “will limit or preclude your ability to influence corporate matters and the election of our directors.”

Cool.

Then there’s the Anthropic contract issue…

The S-1 discloses a cloud services agreement between SpaceX and Anthropic — the AI company behind the Claude model — for compute capacity at SpaceX’s Colossus data centers.

The prospectus describes a $1.25 billion monthly payment running through May 2029, which on its face implies a contract worth roughly $45 billion over its full term.

And that number gets highlighted repeatedly in the AI segment’s growth narrative.

But on May 29, Musk posted on X that the Anthropic arrangement is actually a 180-day lease with a 90-day mutual cancellation notice on either side.

At $1.25 billion per month, a six-month deal caps out at roughly $7.5 billion — not $45 billion. So the full-term framing in the prospectus is, at best, deeply misleading.

When the company’s own CEO is publicly contradicting the financial implications of its own SEC filing 10 days before the IPO prices, you have a credibility problem.

These are the kinds of issues that should give any reasonable investor serious reservations about chasing this offering at any valuation — much less one north of $1.8 trillion.

And the market has rightfully become suspicious.

The $200 billion valuation cut is the first crack. It won’t be the last.

So I’ve said it before and I’ll continue to say it…

Don’t trust Elon Musk.

The SpaceX IPO was supposed to be the largest in financial history. It still might be. But it’s launching with at least two significant problems that we know about — a financial profile that doesn’t justify the valuation and a governance structure designed to insulate Musk from any consequence of public ownership.