How Elon Musk Engineered the World’s Biggest I.P.O.

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At NYTimes.com/gift From The New York Times, I'm Michael Babarrow. This is The Daily. On Monday, the AI Giant Anthropic, filed paperwork to go public, turbocharging, a coming

wave of blockbuster IPOs that could mint the world's first trillionaire, and remake

American capitalism. The first of those IPOs will be Elon Musk's SpaceX set to begin selling shares as soon as next week. Today, business reporter Ryan Mac takes us inside the plan for SpaceX's record-shattering debut on the stock market, and explains how it's already changing goals for investing.

In ways that mean its success or failure will affect all of us. It's Tuesday, June 2nd. Ryan, welcome to the show. Hey Michael. Thanks for having me.

A confession here, it's very rare for the Daily to cover an IPO, and that's because it's pretty rare that an IPO generates the level of interest and excitement and worry that the one we're going to talk to you about today does. My first question to you is, why does this on a show public offering of SpaceX matter so much and feel so monumental to so many people?

“I think it has everything to do with Elon Musk, SpaceX's founder and CEO, and like”

everything with Elon Musk, this IPO is singular.

It's likely going to be the largest of all time, raising anywhere from 50 to 75 billion dollars.

It's going to value this company, likely at more than 1.25 trillion dollars, and it could make Elon Musk already the richest man in the world already one of the most powerful people in the world. The world's first trillionaire, and this opportunity to invest in this kind of one of a kind of company.

I think that excites a lot of people. It is a rocket manufacturer, it launches things into space for the government and for private companies, and it's also got this artificial intelligence bent to it as well. What you're going to see in this IPO is a large involvement of retail or mom and pop investors who are excited to invest in a company they see as run by a generational entrepreneur.

Why is Musk trying to raise this money right now and through the method of an IPO? You don't have to make a company public to raise a lot of money. They're all kinds of ways to raise money. You don't have to take it public, but this company has been private for more than 20 years. It was founded in 2002, and it's raised a lot of money already on the private markets,

from venture capitalists, from private equity funds. So as a company, you kind of get one shot to do this in your lifetime to raise money on

the public market for the first time.

And so Elon Musk sees this as his opportunity to do that and to raise these tens of billions of dollars to fund a lot of the goals that SpaceX has for the next 10, 20, 30 years.

“You must have sold out AI satellites in deep space.”

So it is the worst kind of handy to have a space company, I guess. I'm talking about visions to launch data centers into space for AI. You can find this looked on the moon and refine it and create these sulfales and the great data. I'm talking about landing humans on the moon and building factories to do mining. We are going to be able to take astronauts to Mars.

Ultimately, it's self-sustaining civilization on Mars. That is the long term goal of the company.

and making us a species that exists on more than one planet.

“It is very important, essential that over the long term that we become a multi-planet species”

and ultimately even go beyond the solar system and bring life with us.

Right, those very modest goals. Yes, very modest goals. It sounds like you're saying that those kinds of, literally, other worldly business goals require the kind of money that you cannot just go to Wells Fargo and get from the bank. Yeah, I'm sure that Elon is not necessarily going under his couch cushions and scrounging for change here.

We are talking about huge vast sums of money that don't come around very often.

“Bear in mind as well, that we have these other companies also trying to raise money.”

I'm talking about OpenAI andthropic as well, that are looking to go public and raise also tens of billions of dollars. And so there's kind of this element of who can get out fastest and raise money from the investor because there's only so much money out there to raise.

Right, and so far, Musk will be first.

He will, he will, and it's now a question of convincing the investors that SpaceX, which has now a large AI component to it, is indeed a better bet than let's say, anthropic or OpenAI. You described this as a chance for mom and pop investors to become a part of this IPO. That's not the way I typically think of a company going public.

“But I think of big banks, like Morgan Stanley or Goldman Sachs, not UNMI and our moms and dads.”

So these mom and pop investors, something to industry like to call retail investors, get an opportunity to invest here, through their brokerage accounts like Charles Schwab or Robin Hood, typically you get five to 10% of shares in an IPO reserve for retail. There's a discussion now of about 30% being allowed to retail. So three times more, that's meaningful. And why is Musk making this stock so much more available than normal to your regular retail investor than most companies that are going public?

I think it's just the sheer size of this thing. It's going to need investors beyond your traditional banks and funds that typically put their money into IPO's. And it's also going to need a hefty base of investors to continue believing in this company and holding its shares. And so Elon Musk over the years has been pretty brilliant in this strategy of courting the everyday person. And he's building on that to attract retail investors here and build this hype.

You know, he has always on Twitter, for example, on X these days tweeting and building essentially a community of people of fans of folks that are just interested in his companies and in him.

And he wants to get those people in opportunity to invest because once this thing IPOs, it's going to need shareholders to sustain it and to own it and to continue investing in it. God, basically Elon Musk needs regular investors for the store. Correct, but even if you don't want to own SpaceX shares or if you avoid this IPO, you may essentially end up owning a part of SpaceX indirectly. And how is that? Why would that be? So like many Americans, you know, you and I have investments in retirement funds and, you know, these retirement funds are often invested in index funds, which are a collection of companies and stocks that are meant to mirror American industry.

So for example, the Nasdaq 100 is a collection of 100 companies and their stocks trade publicly and so you may own a chunk of the Nasdaq 100. Right, the Nasdaq 100 is relaxing its rules to allow for SpaceX to enter the index a lot more quickly than in the past. Yeah, typically what happens is that when a company goes public, it stock needs about three months on the public market for a cooling off period. And that's because there's fluctuations in stock prices, you kind of want to see where investors settle out with the stock, you know, if it goes up or down.

And after that three months, typically you get the thumbs up and you get to enter the index. What's happening here instead is that after just 15 days of trading with SpaceX, so 15 days after the IPO, SpaceX will be added to the Nasdaq 100. And essentially force the funds that trade off the Nasdaq 100 to buy shares of the company to mirror essentially what's in the index.

And you know, shareholders that are already going to own your stock because of this index opportunity.

This is kind of fascinating. Why are these indexes relaxing changing, making more elastic. They're rules for SpaceX is that their own decision or is that at the urging of Musk and SpaceX.

“That's a great question. I think it's a bit of both for Musk and SpaceX.”

They get access to a lot of capital billions of dollars worse that they wouldn't have had access to without these rule changes or they would have had to wait much longer to get access to that. For the indexes, there is a fear of missing out here, a phomo that you know, they could be missing out on these potential gains for their investors in this kind of once in a lifetime IPO. And that has frightened a lot of experts. You know, I talked to one, for example, who said, it's like creating rules for football and right before you get to the Super Bowl, you throw some of those rules out the window.

You know, you've created these rules of the road here that have simply been eliminated at this kind of monumental event. Well, it's interesting, right, on one level, being invested in something that you don't anticipate or necessarily a desire being invested in feels risky, just inherently. On the other hand, if this IPO is a huge financial success, then lots of people will be benefiting from it more rapidly than they would have in the past.

“That makes me think about Google's IPO. We all wish we had been invested in Google when it went public. I think it was up something like 80% in its first six months on the market.”

It probably wasn't on these indexes either, perhaps we wish it had been. And in this case, SpaceX will be, which could be a boon. I think when numbers go up, everyone is happy, you know, everyone gets to celebrate and you know, take part in the win.

But there's no guarantee that this necessarily goes up. And what happens if shares start to fall after the first couple days of trading.

I mentioned Google there, but I think of something like Facebook when it went public. And the trials and tribulations at face, you know, it's stock went down. Shortly thereafter, of course, it's gone up many times over since that time, but in those first early days of trading, there were a lot of questions. If SpaceX doesn't hit its milestones or some of these very pie in the sky goals that Elon Musk has set out for the company, you may have a lot of investors asking, why was this allowed? Why am I holding this stock? Why was it in these indexes to begin with?

So quite clearly, the story of this IPO so far is how clearly it's seeking to put this stock, put a piece of SpaceX into the hands of a lot of regular people. And that, of course, means that if this is a great IPO, the upside for lots and lots of people is going to be unusually spread out. But if it goes south and is bad, then the pain is going to be felt by a lot larger group of people than normal.

“Right. When you think about that, you have to think about what kind of business is essentially holding up those valuations.”

With an IPO, every company has to file what's called an S1 to disclose their financial health and their projections for the future.

And so I've been covering Elon Musk for many years now. This is the first time I've been able to see the full picture of what's going on at SpaceX.

And after spending a couple of days with this document, which is 277 pages, I and many others just have a lot of questions as to whether or not the business that we're seeing here, the numbers that it's putting up, can justify these trillion dollar valuations that people will be investing in. We'll do it back. I'm Jonathan Knight, and I'm the general manager of New York Times Games. If you play our games, you probably know there's something a bit different about them. Just like there are writers behind the articles you read in the Times, there are creators behind our daily puzzles.

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Puzzles hand-crafted for you. We think that's something worth investing in, and something worth paying for. Subscribe now for a special offer on all of our games at nytimes.com/joingames. So Ryan, now that you have spent time with this nearly 300-page document, and you've peeked behind the curtain of SpaceX's actual business, how healthy a business have you concluded that it is, or isn't, as everyone is deciding whether or not to participate in its IPO.

“I think the answer to that is that it's quite complicated. There are some positives about this business, and there are a lot of questions marks or negatives about this business as well.”

I will start with the positive. Sure, so let's start with the crown jewel of the company, which right now appears to be Starlink. This is the company's satellite internet service. The company has launched these satellites that circle the earth, and the satellites beam down internet service to people on the ground.

It's now racked up about 10 million users and about $4.4 billion in profit last year.

Well, that's enormous. I mean, that's a very healthy business.

“And that's because the company dominates the launch business. That was essentially the business that SpaceX was founded on this idea that it could privatize rocket launches, essentially that were owned by NASA and the government at the time.”

And that bet has paid off well. The company now dominates that market. There estimates that it does more than 85% of all mass into orbit from earth is the aerospace x rocket. And from that, it's been able to build up Starlink as well. And so you get this kind of very healthy business off those two things. And where are the question marks slash serious risks? So the question marks are stemming from the company's investment into AI. Earlier this year, you had SpaceX merged with Elon Musk's AI company x AI. And at the time, Musk justified it as the convergence of synergies. He saw the future of AI taking part in space.

And that's because he believed that these AI data centers, which take up a lot of land and resources on earth, should be put into orbit where they'll have easier access to energy.

“They'll be closer to the sun and where they won't take up as many resources as they would on earth.”

Basically data centers in the sky. Circling the earth. You know, that was the vision for this merger. And bolting on that AI company onto this successful space company has caused financial strain.

The company's capital expenditures doubled to $20.7 billion in 2024 in 2025. It recorded a $4.3 billion loss across its whole business.

And that has put a financial strain on SpaceX's IPO documents. Okay, so basically AI is costing SpaceX so much money that when you look at the overall bottom line, including the profitability of starlink, SpaceX is losing money somehow. Correct. And I should say that there are other factors beyond AI. It's incredibly expensive to build these rockets. The company is also looking to build something called Starship, which is the rocket they believe will bring people to Mars. But AI right now is the most shown around the company's neck.

Right. I mean, a company that's 20 years old, losing money over a full year, makes it hard, at least for me, to understand how you get to an overall valuation of $1.25 trillion. There are several companies in our economy that are valued at $20, but they are hugely profitable, thinking of Nvidia or Microsoft. So how does SpaceX get to that number? Well, it's going to do all these things in the future. It's going to put data centers into space. It's going to build factories on the moon.

It's going to land people on Mars. And essentially what investors are betting on is not the current fundamentals of the company, but you're betting on the future. Right. And the future that he's promising sounds extraordinary, but I wonder how if you're a mom and pop investor, literally if you're my mom or my dad, how are you supposed to judge whether buying into this IPO through Charles Schwab or an index fund actually makes sense if that valuation feels realistic.

You're not doing your traditional analyses of shares or financials here. A lot of this is simply hype. And I say that looking at a number that the company put out in their own document, something called total addressable market. Okay. This is the market that the company projects. It will be able to attain in the future. And it estimated in its own financial documents that it's total addressable market is the largest ever in human history. And that it estimates it to be 28.5 trillion dollars.

Wow. Put that number in a context.

“I don't know if I can. I mean, it's so massive. It's close to the US GDP. I believe.”

Wow. And the company is telling investors that if you invest in us, we may become a company that controls a market that is 28.5 trillion dollars.

Right. That basically does the kind of commerce that the entirety of the United States economy does someday.

Yeah, someday. And that is AI and rockets to space and Starlink. And all that is 28.5 trillion dollars. That's the type of hype that Elon Musk is able to sell. And I think people buy into that largely because he's been successful in the past. You look at, you know, his net worth, for example, which can fluctuate anywhere from $600 to $800 million these days. And you might see that, be like, while this man's been very successful. And he's telling me he's going to hit these trillion dollars in total addressable market.

Let me put my faith into him and let me let me bet on him because he seems to be going places. Well, let me put that proposition to the test. Elon Musk's track record in the past quickly summarized it. We have a couple of examples to play with. Obviously, we have Tesla. We also have X formerly known as Twitter. So let's say Tesla. He took the company public and the company has mainstream electric cars around the world. It has been wildly successful from a stock price perspective. This made folks a lot of money and it continues to be a strong public company from a stock price perspective.

“Well, instead of investors, I mean, I think I was looking up before we spoke that if you invested $1,000 in Tesla at its initial public offering,”

you'd have something like a quarter million dollars today. That is a hell of a return.

And I think that's, you know, part of the appeal of Musk and the part of the appeal of so much of this hype around him. But also, I covered his acquisition of Twitter back in 2022, which was not as much of a success. No. You know, he bought that company at $44 billion. At one point, the valuation of the company has marked down by some of his investors was down to $10 billion. But he was able to rescue that company by merging it with, at the time, his AI company XAI. And so even though that company has not been a financial success, he's been able to bury that within his AI company, which on paper was quite the success in terms of raising money.

“Right, which I guess does point to the fact that risk isn't even normal risk with someone like Elon Musk because he's able to use one arm of his business”

to, in this case, rescue another. And if you're someone who invested in X, are you doing okay now? You are because if you were an investor in his Twitter takeover, you now presumably hold space X shares. So you're doing quite well for yourself. And so you think about risk and you think about accountability for someone like Elon Musk and the rules of the game are just completely different. Hmm, just explain why you're raising the issue of accountability here for SpaceX and Musk. Because with most public companies, public CEOs are accountable to their shareholders. These shareholders have votes.

And if a company doesn't do well, they can vote against their CEO or pressure the board to take action against CEO. Or in some cases, file shareholder lawsuits. If they believe something untoward has been done by the CEO or other executives. Right, or if, for example, the company's valuation no longer bears any resemblance to what shareholders were promised. Right. And what Elon Musk has done in this case at SpaceX is remove a lot of the levers for accountability. I look at the amount of power he has in the company. He has instituted what we call super voting shares where the shares he holds have in this case 10 to 1 votes compared to your average share.

He has almost 85% of the voting control in the company.

He has this incredible supermajority where he essentially has unchallenged power. He controls the board. He has appointed friends and associates to the board.

There's no way for shareholders to essentially stage any kind of revolt or intervention, even if the company's performance is quite bad.

Right. You're kind of with Elon up or down.

“The accountability issues you're raising in particular, I think bring us back to this inevitable question of Musk and how SpaceX, as you said, is really an investment in him, his vision, his judgments, his past track record.”

And while that track record suggests that in general, you're going to win if you invest with Musk, the past few years have raised meaningful questions about his conduct. He went off to go try to reduce government spending under the second term of President Trump through Doge and that failed and Musk got really distracted from Tesla, especially right. And at the same time, he got into a huge fight with Trump that almost resulted in Trump threatening his contracts through SpaceX as I recall it. There's also questions about his use of drugs raised in reporting by our colleagues here at the Times. So this is not a traditional CEO, which is part of the allure, but it's also clearly part of the risk. And from what you're saying, none of the normal accountability mechanisms are in place.

If he starts to go off the rails. So how should we think about that as a risk in this all?

I mean, that should be the top line risk for anyone thinking of investing in any of his companies. That Elon Musk is a singular figure, good or bad.

“And I think that is something I think about a lot. This individual who has that much power, that much wealth, who is essentially unaccountable here, and he's unaccountable because of that wealth.”

And so when you think about the SpaceX IPO and the potential for what it can do to his net worth to potentially make him a trillionaire, this could give him even more power. Right. And I guess the way to think about this IPO is that one way or another, we're even more bound up with Musk's success or failure than we have ever been before.

I mean, if he goes up with this IPO, we all go up with him for all the reasons we've talked about, including especially the index funds.

And if he goes down, a ton, we all go down with him. We are all tied to Musk, whether we want to be or not. And that's just the story right now of the economy he's created. Yeah, there's really no way off the rocket ship. And I think there's an argument to be made that this IPO could go well. It could make a lot of money for folks. And in the short term, it could sustain on this hype alone. But in the long term, this is now going to be a public company.

It's going to have financial results. It's going to disclose. It's going to have quarterly earnings calls with investors. And it's going to need to show progress towards these very lofty goals that people have already invested in. Right. Whether that's putting data centers in a space or getting people to Mars. And if the company and Elon Musk doesn't show that progress, investors may start to get antsy. And while he is largely unaccountable, investors do have one main way to show their displeasure, which is to sell the stock.

And if that's the case, they'll be potentially reckoning for SpaceX and for Elon Musk. And this rocket ship that SpaceX has taken off on that we're all aboard could come crashing back down to Earth. Orion, thank you very much for your push-up. Thanks for having me. We'll do a back.

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