Space Exploration Technologies, better known simply as SpaceX, became a publicly traded company on Friday nearly a quarter of a century after it was founded.
The company began trading on the Nasdaq exchange in New York City at $135 a share, valuing SpaceX at nearly $1.8 trillion. By the end of the trading day the company’s shares were selling at $160.95, a respectable increase of more than 19 percent.
On paper, SpaceX founder Elon Musk became the world’s first trillionaire, with his personal stake in the company valued at more than $700 billion. Because of the company’s stock options plan, thousands of current and former employees became overnight millionaires. Employees at SpaceX have worked remarkably hard over the last 24 years, and now they will be richly compensated for having done so.
SpaceX now stands as one of a handful of the most valuable companies in the world. Should it be? There is broad disagreement about whether SpaceX is fool’s gold with its sky-high valuation, or represents a valuable opportunity to finally own a piece of a dominant space company that could some day command the business of data centers in orbit.
SpaceX is now largely an AI company #
One thing is clear: SpaceX is now subject to significant public disclosures, and it will conduct much more of its business in the public eye. Although Musk retains complete autonomy in terms of ownership and voting rights, he will now be beholden to shareholders in a very important way: the price of his company’s stock.
Most shareholders bought SpaceX stock today not to be part of a the company’s long-term plans to settle Mars, or to help NASA land humans on the Moon. Certainly, some space enthusiasts did. However, most people invest in stocks to make money.
As SpaceX made clear in its S-1 document filed in May, however, the company’s value does not lie in its “space-enabled solutions” or its Starlink internet constellation. As part of its “total addressable market,” the company views these as comprising less than 7 percent of its value.
Rather, Musk and SpaceX see the majority of its value in providing AI services, mostly from space, and primarily for enterprise applications. If investors agree that’s where the vast majority of the company’s profit lies, it is where they will want to see SpaceX put its time and resources.