SpaceX made its debut on the Nasdaq stock exchange on Friday, with its share price at one stage climbing 25% above its opening level. The initial public offering (IPO) has made Musk the world’s first trillionaire, at least on a paper basis.
On Friday, Elon Musk became the first person on the planet to achieve trillionaire status, following the stock market listing of his aerospace and artificial intelligence (AI) company, SpaceX.
In the hours after the IPO on the Nasdaq, shares soared well beyond their opening price of $135 (approximately €117).
By the close of their first trading day, shares ended up just over 19% at around $161, giving SpaceX a valuation of roughly $2.1 trillion and pushing Musk’s estimated net worth to approximately $1.1 trillion, according to Forbes magazine.
Around 1 p.m. in New York (1700 GMT/UTC), the stock had been trading near the $173 mark—a gain of almost 28%—which translated into a market capitalization of about $2.26 trillion for the Texas-based space and satellite company. The shares then dipped slightly by the end of the session.
This valuation makes Musk the first individual in history to hold a trillion-dollar fortune, at least on paper, largely due to his stakes in SpaceX and electric vehicle maker Tesla.
How much did the record-breaking IPO raise?
SpaceX sold approximately 555.6 million shares at the issue price of $135, successfully hitting its target of raising $75 billion.
That made it the most lucrative IPO in history by a wide margin, surpassing the roughly $29 billion raised by Saudi Arabian oil giant Aramco in 2019.
On Friday, Musk joined via videolink from a ceremonial bell-ringing at Starbase, SpaceX’s facility in South Texas, explaining that the company was going public now because it requires capital to fund ambitions such as launching more satellites and even data centers into orbit.
He repeated his objective “to make life multi-planetary.”
“Not just a few astronauts, I mean literally you,” Musk said. “Whoever you are watching this, SpaceX wants to be able to take you to the moon, take you to Mars, and ultimately beyond.”
How does SpaceX’s market cap compare with its revenues and profits (or losses)?
Much like Musk’s other cash cow, Tesla, it is not immediately obvious why SpaceX can command such a lofty valuation from investors.
The South African entrepreneur’s own celebrity status and success as a hype man, along with the perceived potential in the company’s future performance, play a bigger role in the pricing than current fundamentals.
Last year, SpaceX generated $18.7 billion in revenue and posted a net loss of $4.9 billion, largely due to heavy investments in AI and other ventures.
Friday’s market capitalization, therefore, represents well over a century of the company’s current revenue. By comparison, struggling Volkswagen has a market cap of €48.46 billion, which is less than two months of the carmaker’s revenue.
In other words, Volkswagen Group brings in more revenue in a fortnight than SpaceX does in a year—and at a profit, not a loss—yet investors perceive it to be worth more than 40 times less.
As for profits, SpaceX has never recorded a net gain in any calendar year. However, similar issues did little to slow the meteoric rise of Tesla’s shares in recent years.
SpaceX is now among the most valuable U.S. companies, trailing only Nvidia, Apple, Google parent Alphabet, Microsoft, and Amazon. Tesla has a market capitalization of $1.26 trillion, despite finally beginning to generate consistent profits.
Nvidia, boosted by the AI boom, currently stands in a league of its own in overall nominal valuation rankings, with investors valuing it at nearly $5 trillion.
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Edited by: Sean Sinico and Karl Sexton
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