To The Moon

Musk Drops a Bombshell! SpaceX’s IPO Filing Reveals Historic Numbers. Can Ordinary Investors Still Get In?

On May 20, Eastern Time, SpaceX officially filed its S-1 registration statement with the SEC. The company is reportedly targeting a valuation between $1.75 trillion and $2 trillion. If the IPO is completed at that level, it would become the largest public listing in U.S. market history.

I spent the weekend going through the 190-page filing. There is a lot inside, and some of the numbers are big enough to change how investors should think about SpaceX.

So in this article, I want to walk through the filing in plain language: what the company does, where the money comes from, where the risks are, and why this IPO could become one of the defining market events of the space economy.

SpaceX Is No Longer Just a Rocket Company

Most people still think of SpaceX as “Musk’s rocket company.”

That description is no longer enough.

Based on the filing, SpaceX is becoming a much broader technology platform. The company now has three major business pillars:

Connectivity, Space, and AI.

That means this IPO is not simply about rockets. Musk is packaging together a satellite internet business, a launch and space infrastructure business, and an AI compute business into one public-market story.

This is the key point. SpaceX is no longer just trying to dominate space launch. It is trying to build the infrastructure layer for satellite internet, space transportation, and artificial intelligence.

1. Connectivity: Starlink Is the Main Cash Engine

The first business segment is Connectivity, which mainly refers to Starlink.

Starlink’s business model is easy to understand. The company launches satellites, provides internet coverage, and collects monthly subscription fees from customers.

In the early stage, satellite internet was expensive and mostly served niche users. Now Starlink is moving into a much larger market. The service is becoming more accessible to ordinary households, especially in areas where traditional broadband is weak or unavailable.

This strategy has a trade-off. As Starlink pushes into broader and lower-priced markets, ARPU, or average revenue per user, may decline.

But that does not necessarily hurt the overall story. Lower pricing can expand the customer base. Starlink is also gaining more enterprise customers, including airlines, cruise operators, and international users outside the United States.

So the real story is not just ARPU pressure. The real story is scale. Starlink is trading some pricing power for a much larger market opportunity.

So far, that strategy appears to be working. Revenue and profitability are both moving higher.

2. Space: The Rocket Business Is Big, but Starlink Is the Real Anchor Customer

The second segment is Space. This is the business people usually associate with SpaceX: building rockets and launching payloads.

SpaceX has already won many fixed-price contracts from the U.S. government and military. Those contracts helped the company build a strong position in the launch market.

But the filing reveals an important detail: the biggest customer of the Space segment is actually Starlink.

Nearly three-quarters of Space segment revenue comes from Starlink-related launches. This changes how we should think about this business.

SpaceX is not just a launch provider selling services to outside customers. It is also using its launch capability to build and expand its own satellite internet network. That creates an internal flywheel:

So this segment is valuable, but it is still in a heavy investment stage.

3. AI: xAI Adds a New Growth Story, but Also Adds Pressure

The third segment is AI, mainly through xAI.

After SpaceX acquired xAI earlier this year, it became part of the IPO package.

Among AI companies, xAI already has meaningful revenue. But the business is extremely capital-intensive. The company is not trying to maximize near-term profit. It is focused on building massive compute capacity.

Most of xAI’s revenue, and even more than that, is being reinvested into the Colossus data center and related infrastructure.

This gives xAI one of the strongest compute positions among major AI players. At the same time, it creates real financial pressure for SpaceX.

This is the trade-off investors need to understand. xAI adds another growth engine to the SpaceX story, but it also brings large capital expenditures, GPU depreciation, data center costs, and financing needs.

In short, xAI makes the long-term story more exciting, but the near-term financial profile more difficult.

Financial Performance and Outlook

SpaceX now has three major business lines. Before looking at each one separately, it helps to start with the overall financial picture.

At the group level, revenue is still growing. The pace of growth has slowed, but the direction remains positive.

The bigger issue is spending. SpaceX’s investment cycle is moving faster than its revenue growth. That is why net losses have been volatile.

This is not a company managing for smooth quarterly earnings. It is a company spending aggressively to build infrastructure before the full revenue opportunity arrives.

Now let’s look at the three segments separately.

Starlink is clearly the cash cow.

It contributes a large share of revenue and continues to grow quickly. More importantly, it can still generate positive free cash flow even while investing heavily in network expansion.

That makes Starlink the financial backbone of SpaceX. It is effectively helping fund the other two businesses.

The Space and AI segments look very different. Both generate revenue, but both are still consuming capital. Starship development, launch infrastructure, AI data centers, GPU investment, and integration costs are all expensive.

Because of this, SpaceX remains negative on consolidated free cash flow.

Free Cash Flow Breakdown

This is probably the most important financial takeaway.

SpaceX already has a real cash-generating business in Starlink. But that cash is being used to fund two much larger bets: Starship and AI compute infrastructure.

So investors are not only buying current cash flow. They are buying a long-term capital deployment story.

That can create huge upside if the projects work. It also creates risk if the spending cycle lasts longer than expected.

Capital Spending: Aggressive Even Compared with Tech Peers

To judge whether SpaceX’s spending is high, we can compare it with other technology companies.

For traditional SaaS companies, and even for the broader technology sector, capital expenditure as a percentage of revenue is often around the 30% range.

SpaceX is far more aggressive.

This fits Musk’s style. His companies tend to spend heavily upfront, build physical infrastructure at scale, and try to turn that scale into a long-term competitive advantage.

xAI is the clearest example.

Among major AI companies, xAI appears to be one of the most aggressive players in compute expansion. Its infrastructure buildout is extremely fast.

This May, xAI signed a compute support agreement with Anthropic. According to the filing, this agreement is expected to bring in around $1.25 billion in monthly revenue.

That deal matters because it suggests xAI is not only building AI models. It is also trying to become a major supplier of AI compute infrastructure.

This is a different kind of AI bet. Musk is not only competing at the application or model layer. He is trying to control part of the compute layer.

Debt and Leverage: The Part Investors Should Not Ignore

The growth story is attractive, but the balance sheet deserves serious attention.

SpaceX currently reports $29.1 billion of debt. Its debt-to-EBITDA ratio is 4.4x, already above the level typically associated with investment-grade credit quality.

But the reported debt number may understate the real financial burden.

SpaceX also has several additional obligations and commitments, including:

• $7 billion of preferred equity

• A $10 billion breakup fee related to the acquisition of AI programming software company Cursor

• Around $2 billion of monthly interest payments to EchoStar, the U.S. satellite communications company

• Financing leases tied to data center construction

• Possible repayment obligations related to prepaid contracts, including the Anthropic agreement

The data center financing is especially important. Some of these assets may appear as infrastructure on the balance sheet, but economically they behave more like liabilities because they are funded through lease structures.

The Anthropic contract also creates potential repayment risk. If the agreement can be terminated with six months’ notice and prepaid amounts must be returned, then part of that revenue comes with a contingent obligation.

After adjusting for these items, SpaceX’s real leverage could be closer to 7.4x, based on about $49 billion of adjusted debt and $6.6 billion of EBITDA.

That is high.

This does not mean SpaceX is a bad business. It means the company is taking a very aggressive financing approach. Investors need to be comfortable with that before buying into the IPO story.

Musk’s Compensation: Why It Matters for the Valuation Story

One of the most interesting parts of the filing is Elon Musk’s compensation structure.

For the past seven years, Musk’s salary at SpaceX has stayed at California’s minimum legal wage of $54,080 per year. That is lower than the pay of any other SpaceX employee.

But on January 13 this year, Musk and the board reached a new agreement. Musk was granted 1.0 billion Class B performance-based restricted shares.

These shares do not vest simply because time passes. They only vest if SpaceX hits very aggressive targets.

The award has two major conditions:

1. SpaceX must reach specific market capitalization milestones

2. SpaceX must establish a permanent human colony on Mars with at least 1 million residents

Both conditions must be met. Reaching only the valuation target is not enough.

This is not a normal executive pay package. It is a highly ambitious incentive plan tied directly to SpaceX’s long-term mission.

At first glance, the targets sound unrealistic.

But this is where the Tesla comparison becomes important.

In 2018, Tesla gave Musk a compensation package that also looked almost impossible at the time. Tesla’s market cap needed to grow from roughly $59 billion to $650 billion, about an 11x increase. Within four years, Tesla reached all 12 milestones.

That precedent does not prove SpaceX will succeed. Mars colonization is a completely different challenge from scaling Tesla.

But it does explain why investors may take the target seriously. Musk has done something similar before in public markets: he turned an apparently unrealistic market cap goal into reality.

Conclusion

SpaceX could become the most important IPO of this generation.

The company has several things investors love: a dominant founder, a massive addressable market, strategic importance, real revenue, and a business line in Starlink that already generates positive cash flow.

But this is not a simple profit story.

SpaceX is entering the market during an aggressive expansion cycle. The financials show the trade-off clearly: high growth, high capital spending, high leverage, and negative consolidated free cash flow.

That creates the central valuation question.

At a potential valuation near $2 trillion, investors are not just paying for SpaceX as it exists today. They are paying for the possibility that it becomes a combined satellite internet, space infrastructure, and AI compute empire.

That upside is enormous. But a lot of future success is already being priced in.

For ordinary investors, the question is not whether SpaceX is an extraordinary company. It clearly is.

The real question is whether the IPO price leaves enough room for upside after accounting for the risks.

This IPO could become a milestone for the space economy. In the next article, I will look at how investors may position before the listing through names such as NASA, DXYZ, VCX, SATS, GOOG, and RKLB. $Tema Space Innovators ETF(NASA)$ $Destiny Tech100 Inc(DXYZ)$ $Fundrise Innovation Fund LLC(VCX)$ $EchoStar(SATS)$ $Rocket Lab USA, Inc.(RKLB)$

Stay tuned. $SpaceX(SPCX)$