Is SpaceX Worth the Hype?

**Ryan Knutson** (0:05)
Elon Musk's company SpaceX is going public, meaning at some point on Friday, SpaceX will begin selling shares on the stock market, and it's aiming to raise a lot of money.

**Corrie Driebusch** (0:18)
SpaceX is by far the largest IPO ever, so I don't even have to say the largest that I've covered, it's the largest ever.

**Ryan Knutson** (0:28)
Our colleague Corrie Driebusch is an expert in initial public offerings, or IPOs, and she says that the amount of money that SpaceX is aiming to raise, a whopping $75 billion, is more than the amount typically raised in an entire year by all other IPOs combined.

**Corrie Driebusch** (0:47)
So think about the total dollars that are raised in a year by IPOs in the US.

**Ryan Knutson** (0:54)
So all of the companies that are listing, all of the money that they're raising from all these investors.

**Corrie Driebusch** (0:58)
Yeah, all the companies listing in the US to raise money each year. If you look back the last 10 years, that total has only exceeded the $75 billion SpaceX is going for twice.

**Ryan Knutson** (1:11)
That is, forgive the pun, astronomical.

**Corrie Driebusch** (1:15)
It's pretty crazy.

**Ryan Knutson** (1:17)
So what does that tell you?

**Corrie Driebusch** (1:20)
It speaks a lot to the craziness of what SpaceX hopes and dreams to do. They kind of believe in almost the quote unquote impossible.

**Ryan Knutson** (1:35)
The price SpaceX is selling shares for values the company at $1.77 trillion. That puts it among the top 10 most valuable companies in the world.
On paper, does it look like SpaceX is a company that should be worth $1.7 trillion?

**Corrie Driebusch** (1:55)
SpaceX is selling itself based on its potential, not its current ability to turn profits. SpaceX in its current iteration is unprofitable.
You're buying in to what it could be, not what it is right now.

**Ryan Knutson** (2:16)
Welcome to The Journal, our show about money, business and power. I'm Ryan Knutson. It's Thursday, June 11th.
Coming up on the show, is SpaceX really worth $1.7 trillion?

**SPEAKER_4** (2:43)
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**Ryan Knutson** (3:22)
When Elon Musk founded SpaceX in the early 2000s, he had big dreams for what the company could accomplish.

**Elon Musk** (3:28)
The long-term goal of SpaceX is perhaps not a very commercial-sounding goal at all, which is to really build the technologies necessary to make life multiplanetary.

**Ryan Knutson** (3:38)
Human life on other planets? His vision wasn't always taken that seriously.
For one, Musk didn't have a background in aerospace. And for the most part, launching rockets into space had been NASA's domain, not a private company's.
It didn't help that getting rockets into orbit is no easy task. It's literally rocket science. Plus, it's super expensive and dangerous. The first three rockets SpaceX launched, the Falcon 11, were launched in 2008 In ten, nine, eight, seven, they never made it into orbit.

**SPEAKER_4** (4:14)
Five, four.

**Ryan Knutson** (4:17)
The Falcon 1 rockets, which cost millions of dollars to make, were either destroyed or lost mid-flight. But in 2008, SpaceX finally started to take off, when Falcon 1 Flight 4 successfully reached orbit.

**SPEAKER_6** (4:33)
Which means Falcon 1 has made history as the first privately developed launch vehicle to reach Earth orbit from the ground.

**Ryan Knutson** (4:43)
SpaceX later expanded beyond the rocket business. It went on to launch a satellite internet arm called Starlink. And it eventually merged with XAI, Musk's artificial intelligence startup, which also owns the social media platform X, by the way. So SpaceX is now a rockets, internet, AI, and social media company.
How all that works out financially was mostly a mystery. Since it was a privately owned company, it didn't have to disclose very much, even to its original investors.

**Corrie Driebusch** (5:15)
One thing that's been fascinating about SpaceX for the many years that I've been watching the company is, it's been notoriously so secretive about its finances. So the majority of pre-IPO investors have been in the dark about how much it made or lost.

**Ryan Knutson** (5:32)
That's changing now that the company is going public. To be listed on stock exchanges, companies have to disclose a lot.
A few weeks ago, SpaceX released a document that was several hundred pages long and outlined the financial state of the business. Let's start with a part of the business that's making money, Starlink.