Despite record valuation: Why SpaceX is avoiding an IPO

SpaceX currently commands an impressive valuation of $350 billion in the private market. The space company probably won’t go public any time soon. That’s what lies behind it.

• SpaceX valuation rises to $350 billion
• An IPO seems unlikely for now
• SpaceX benefits from the private market

SpaceX’s private market valuation rises to $350 billion, making the tech giant the most valuable company in the world, as Bloomberg first confirmed in early December 2024. SpaceX previously had a private market valuation of about $212 billion, according to MarketWatch’s latest review, which references data from private company stock trading platform ForgeGlobal. This increases the valuation by an impressive $138 billion.

CEO Elon Musk commented on the current development in an reduced the amount of shares it repurchased from employees to allow some new investors to come in,” he wrote.

This development is causing a great stir and is causing investors to speculate whether an IPO is imminent. But many factors suggest that SpaceX will probably not take the step to go public any time soon.

No IPO in sight: Elon Musk relies on private investors

SpaceX is currently taking advantage of the opportunity to raise capital through the private market rather than considering an IPO. A planned capital increase with a valuation of $350 billion shows that the company continues to be supported by private investors. These are accredited investors who are permitted to invest in privately held stocks, which requires assets of at least $1 million less the value of the investor’s primary residential property.

Why more and more tech giants are avoiding IPOs

SpaceX isn’t the only company avoiding the IPO. More and more tech companies, such as Stripe and Databricks, are choosing to remain private. The high regulatory requirements and the risk of uncontrolled market movements could potentially cause more harm than good. An IPO risks leaving the company vulnerable to market sales that have little to do with actual company performance.

The decision to focus on the private market allows SpaceX to maintain more flexibility in its capital raising and focus on long-term goals without having to face the immediate attention and demands of the public market. In the current market situation, in which many tech companies are struggling with uncertainty and volatile markets, SpaceX is likely to continue to value the advantage of a private valuation.

Sought-after tech companies like SpaceX, Stripe or Databricks, valued at more than $1 billion, “can remain private indefinitely” and will be in no rush to go public, said Matthew Kennedy, senior strategist at Renaissance Capital told MarketWatch columnist Therese Poletti. “I expect that these companies should have no difficulty raising funds privately as long as they wish,” Kennedy continued. With private investors keen to participate in a SpaceX capital raise, it is more likely that the company will continue to rely on private funding sources rather than pursue an IPO on the NASDAQ.

No IPO for SpaceX: Investors have to be patient for now

The example of SpaceX shows that more and more companies are avoiding going public in order to maintain greater control over their finances and strategic decisions. An IPO is not urgently needed for SpaceX, with its current valuation of $350 billion and a strong capital base. The benefits of private financing and high demand from investors provide SpaceX with the opportunity to continue to grow without the pressure of a public market. At a time when more and more technology companies are avoiding going public, it remains to be seen if and when SpaceX will change this decision.

Editorial team finanzen.net

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