Dear Reader,
I promised to keep you updated on the SpaceX IPO, and I'm a man of my word.
New details have emerged, so let's get into it.
What’s Changed Since Last Time
A couple of weeks ago, it looked like Bank of America was going to receive a large allotment of SpaceX shares for retail investors.
That has shifted.
It now appears that Morgan Stanley is getting a big block of shares — and retail investors will be able to access them through E*TRADE, not Morgan Stanley directly.
That's how things look right now, but this is a fluid situation.
What We Know
The amount SpaceX plans to raise is $75 billion.
The final valuation looks set at $1.75 trillion.
A major part of SpaceX's growth plan is selling Starlink mobile service directly to consumers.
To that end, they just signed a deal with T-Mobile, which will pay SpaceX $100 million for the right to sell Starlink's direct-to-mobile satellite service.
That's ironic, because I use T-Mobile — and it is literally the worst service in the world.
Let's hope SpaceX fixes that!
The Business Itself
As we discussed a few weeks ago, SpaceX's core business — rocket launches and Starlink combined — generates about $16 billion a year in revenue and roughly $8 billion in EBITDA.
That's a 50% EBITDA margin.
That is a wonderful business!
The complication is xAI, which SpaceX just merged with.
xAI is doing about $200 million in revenue and losing roughly that same amount.
So the combined entity has a money-losing operation now layered on top of a highly profitable one.
That's worth keeping in mind.
The Road Show —
Or Rather, The Movie Launch
As a former investment banker and owner of Lexington Capital Partners, I've watched a lot of IPO road shows.
This one is different.
Elon Musk, being Elon Musk…
Means this “road show” is less like a traditional IPO and more like a blockbuster movie launch.
Remember how they'd tease a film like Jurassic Park six months out, then drop a big trailer three months later, then another one a month before release?
That's exactly what's happening here —
A carefully timed, expertly executed marketing campaign designed to build maximum frenzy by the time the shares go live.
This is a very sophisticated propaganda machine.
And it is working.
Should You Buy It?
I'll be honest with you — I'm in an impossible position here.
If I tell you not to buy it and it pops, you think I'm crazy.
If I tell you to buy it and it goes down, same problem.
So here's what I'll say:
SpaceX the business is a hell of a company — truly extraordinary.
SpaceX the stock at $1.75 trillion is a different conversation…
At this valuation, most of the institutional investors who got in early at lower prices will be selling their shares to retail investors on IPO day.
Can the stock go higher on the open?
Absolutely — crowd frenzy is a real force.
Can it go lower? Of course.
What this story really illustrates is the extraordinary power of the Elon Musk brand and marketing machine.
He represents something genuinely unique in this country's history.
Whatever happens, it promises to be fun to watch.
Have a wonderful Wednesday. I'll see you tomorrow.
“The Buck Stops Here,”
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Written by Dylan Jovine