SpaceX Targets Record GHS 75 Billion IPO

SpaceX, the rocket company led by Elon Musk, is aiming to raise a record GHS 75 billion in its planned stock market debut. The company has set a suggested share price of $135. This will value SpaceX at GHS 1.75 trillion.

This IPO is set to be the largest in history if all shares are sold. SpaceX expects to begin trading on the Nasdaq stock index on June 12. Setting a share price this far in advance is uncommon. Companies usually reveal their stock price the day before trading begins. SpaceX's valuation has grown significantly, reaching GHS 1.75 trillion from GHS 1.25 trillion earlier this year.

SpaceX's flotation comes at a time when technology companies are investing heavily in artificial intelligence (AI). The company's recent financial reports show substantial revenue but also significant losses. In 2023, SpaceX earned GHS 18.6 billion but reported a net loss of GHS 4.9 billion. In the first three months of this year, sales reached GHS 4.7 billion, with a net loss of GHS 4.3 billion. The company holds GHS 102 billion in assets but also carries GHS 60.5 billion in debt.

Samuel Kerr, head of equity capital markets research at Mergermarket, described the valuation as "incredibly rich." He stated that SpaceX's price-to-sales ratio is higher than other major companies in the "Mag 7" group, which includes Alphabet, Amazon, Apple, Meta, Nvidia, Microsoft, and Tesla. Kerr noted that investors might overlook this due to SpaceX's focus on future earnings and revenue.

SpaceX is expanding beyond rocket launches and satellite internet services. It now owns xAI, an artificial intelligence company. SpaceX also plans to develop AI satellites and orbital data centres. Laurence Pevsner, a partner at Lux Capital, noted that the AI component is driving the current valuation and represents a risky investment for shareholders. Other AI companies like Anthropic, Alphabet, and OpenAI are also planning significant fundraising initiatives.