Why Investors Say Space X's IPO Valuation Does Not Need to "Make Sense"

If SpaceX goes ahead with its contemplated 2026 IPO, investors are likely to pay valuations that would, in any other circumstances, be seen as outrageous.

The potential IPO is widely expected to raise $30 billion and value the whole company at as much as $1.5 trillion, or about 1o0-times revenue (well beyond what even highly prized public tech companies typically trade at).

Here, portfolio manager Jeremy Abelson explains why investors are likely to pay valuations that would, in other circumstances, be seen as outrageous.

This is an N of 1 company with no real competition from the Magnificent 7, and it will likely have the biggest retail bid of all time. The valuation will not, and does not need to, make sense when it comes public.
— Jeremy Abelson

Abelson is the founder of Irving Investors, which has invested in SpaceX.

He believes the strong and growing cash flows from Starlink, SpaceX's internet service, and the long-term potential to dominate emerging space industries, such as satellite data centers, will prove irresistible to investors.

Another factor in SpaceX's favor is that it does not compete with any of the other tech giants. It is neither ad-driven nor dependent on AI capital expenditures. That makes it a diversification opportunity for investors worried about overconcentration in mega-cap tech and AI.

If you want to learn more about SpaceX, one of the best books available is Eric Berger's Reentry: SpaceX, Elon Musk, and the Reusable Rockets that Launched a Second Space Age.

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