You’re About To Own Part Of SpaceX, Like It Or Not
Tens of millions of us are about to be forced by an alien onto his spacecraft.
On June 12, eight days from now, Elon Musk’s company SpaceX will begin trading on the Nasdaq stock exchange, in what is expected to be the largest initial public offering in stock market history. Most people don’t realize it yet, but the investing public is being forced by new rules, bent to favor Musk, to own a big chunk of it.
According to Bloomberg, SpaceX is aiming to raise as much as $75 billion in the listing, more than twice the previous record holder, at a valuation of at least $1.8 trillion. Musk is already the world’s richest person, but at a projected IPO price of $135 per share, Musk’s net worth could reach nearly $1 trillion. No person in history has ever held that much wealth.
And here’s the blink twice part. To help launch Musk’s mind-spinning IPO, regulators rewrote the rules governing public offerings, bending their own standards so far that the retirement savings of millions of ordinary Americans will soon automatically include a piece of SpaceX.
The Musk mystique behind the IPO craze
Musk is not a conventional business figure. He is, at least to his adoring followers, something closer to a prophet. And in fairness, he has made many people who banked on his success quite wealthy.
When Tesla went public in 2010, the conventional wisdom was that you couldn’t build a car company from scratch, let alone one whose products run solely on batteries. Every major automaker had tried and abandoned electric vehicles, but Musk kept going.
By 2021, Fortune credited him with “finally pushing the legacy auto industry to get serious about producing electric cars” — Ford, GM, Volkswagen and the rest had been dragged, sometimes reluctantly, into an electric future they had long resisted, in large part because Tesla had proven the market existed. Along the way, Tesla’s shareholders, including many ordinary “retail investors” who had bet on Musk personally, made a fortune, too.
That experience created something unusual: a mass investor following that functions less like a shareholder base and more like a fan community. Tesla has attracted more than one million individual retail investors, the largest base for any company in the S&P 500, according to market analysts. These investors track Musk’s every move on X, the social media platform he owns, and have shown a remarkable willingness to buy through downturns that would have routed a conventional company.
Now Musk is deploying that same dynamic for SpaceX. According to CNBC, SpaceX CFO Bret Johnsen told bankers the company intends to set aside up to 30 percent of IPO shares for retail investors. That’s far above the usual 5 to 10 percent for an IPO. The company plans to host 1,500 of them at a special event following the roadshow launch. Johnsen explained, “Those are folks that have been incredibly supportive of us and of Elon for a long time, and we want to make sure that we recognize that.”
The appeal is not irrational. Starlink, a satellite-based internet service owned by SpaceX, is a genuinely remarkable business. It has 10.3 million subscribers, is in 164 countries, and represents the only profitable segment of the company. Through SpaceX’s launch dominance and Starlink’s scale, the company controls more than half of all global orbital launches and enjoys cost advantages no competitor can easily replicate.
But beware the Musk hype
Musk’s actual record of delivering on his promises is not quite what his admirers think.
The New York Times published a detailed analysis this week of more than 602 public goals Musk has announced over the years in investor calls, social media posts and public statements. Fewer than one in five were delivered as promised. His track record has also worsened significantly over time: In 2015, he fulfilled nearly three-quarters of the goals he announced. By 2020, he had completed fewer than half of his promises on schedule. Bloomberg maintains its own tracker of Musk’s goals that tells a similar story: ambitious timelines announced, then quietly revised, then revised again.
For SpaceX specifically, the Times found that of roughly 150 goals Musk set for the company, he achieved only about 32 percent within a year of their stated deadline, and half couldn’t be verified at all because the plans were too vague or the target dates too far out. For example, he first promised to send an uncrewed mission to Mars by 2018. Then 2020. Then 2024. He now says there’s a 50-50 chance of doing it by the end of this year. Full self-driving for Tesla has been “one to two years away” since 2016. The humanoid robot Optimus was supposed to thread a needle. It cannot.
Supporters of the SpaceX offering counter that this misses the point. Musk’s timelines have always been aspirational rather than contractual. After all, Amazon’s early investors who stayed patient through years of losses were eventually rewarded beyond anything they imagined. While that argument has genuine force, the deeper question is whether the very rules of public markets should be rewritten to accommodate it.
Rules and why they exist
When a company offers its shares to the public for the first time, the process is normally carefully regulated. Those regulations weren’t invented to make things difficult; they were invented to protect investors.
The seasoning requirement. Under longstanding rules, a company generally has to have been publicly trading for at least 12 months before it could join a major stock index. The idea is simple: Give the market time to breathe and see how a newly public company actually behaves before folding it into the indexes that anchor most Americans’ retirement savings.
The profitability requirement. To join the S&P 500, a company traditionally had to demonstrate four consecutive quarters of positive earnings under standard accounting rules. If a company is losing money, it shouldn’t automatically join the index that millions of people depend on for their financial futures.
The float requirement. Most major indexes required that at least 5 to 10 percent of a company’s shares be available for public trading. A very small “float”—meaning very few shares actually changing hands—makes a stock vulnerable to extreme price swings, which puts the pension funds and 401(k) plans that must buy in at risk.
The SpaceX arrangement, as currently constituted, fails all three tests. It will join major stock indexes long before it has “seasoned” for a year. Per CNBC, it recorded a $4.28 billion net loss in the first quarter of 2026 alone, not the positive earnings normally required, and will go public with a float estimated at just 3 to 5 percent. As Caleb Ecarma noted in Oligarch Watch, companies with market caps comparable to SpaceX’s target, such as Amazon, Nvidia and Microsoft, float more than 90 percent of their shares.
How the rules got bent
Axios reported that SEC Chairman Paul Atkins pushed through what the agency itself called the largest overhaul of IPO rules in 20 years, framed around the stated goal (and obvious nod) of “making IPOs great again.”
At the same time, the private organizations that run the major indexes took action of their own.
Nasdaq moved first and most decisively, but only after SpaceX made it a condition of choosing Nasdaq as its listing venue. Reuters reported in March that SpaceX conditioned its interest in a Nasdaq listing on guaranteed early index inclusion; after its demand was heard, SpaceX chose Nasdaq. As CNBC reported, Nasdaq then instituted a rule change that shortens the time for newly public companies to enter its index. As of May 1, companies with market caps ranking within the top 40 members of the Nasdaq-100 can join the index within just 15 trading days after going public. Meanwhile, Nasdaq eliminated the minimum float requirement outright. Bloomberg captured this arrangement in a telling headline: “SpaceX’s IPO Led by Elon Musk Forces Index Funds and Retail to Change the Rules.”
As Bloomberg reported, S&P Dow Jones Indices is now also considering changes to the rules governing how companies join the S&P 500, a move that would potentially fast-track SpaceX’s entry.
The New York Stock Exchange (a competitor of Nasdaq) questioned whether some of Nasdaq’s rule changes were designed to attract SpaceX’s listing. “From our perspective,” said its president, Lynn Martin, “market integrity is not something that is a competitive dynamic.”
Defenders of the rule changes argue the old standards were designed for a different era, when companies listed young and needed time to mature in public markets. Today’s tech giants stay private for a decade, backed by institutional capital, and arrive at their IPOs already dominant in their industries. They claim that forcing SpaceX, which has operated for more than 20 years, employs 15,000 people, and controls half the world’s orbital launches, to wait 12 months before joining a major index serves no protective purpose.
But the timing and specificity to SpaceX can’t be dismissed through such broad arguments. Index providers do not typically rewrite foundational rules in a matter of weeks. Multiple providers moved simultaneously, in the months immediately preceding one specific company’s planned IPO. And that company had already told Nasdaq that early index inclusion was a precondition for choosing its exchange.
Michael Burry, the investor who predicted the 2008 financial crisis depicted in The Big Short, flagged the mechanics of the rule change, citing one Wall Street veteran’s description of them as “a recipe for a massive, artificial supply-and-demand squeeze.”
You might own it, but Musk controls it
When you buy shares in most public companies, you get a vote. It’s not a decisive vote in most cases, but it’s a real one. You can vote on who sits on the board, on major company transactions, and on resolutions to hold management accountable. But this is the age of unaccountability, and the SpaceX offering strips most of that power away.
As Fortune reported, when SpaceX goes public, ordinary investors will purchase Class A common stock, carrying one vote per share. Meanwhile, Musk and a select group of insiders hold Class B shares, which carry 10 votes each. That will allow them to dominate all decision-making even with a minority of the actual equity.
The prospectus, as reported by CNBC, designates SpaceX a “controlled company.” It’s a legal classification that allows exceptions to governance rules, meaning Class A shareholders “will not have the same protections afforded to shareholders of companies that are subject to all of the corporate governance” requirements. Musk himself holds 85 percent of the voting power. Gautam Mukunda, who teaches leadership at the Yale School of Management, opined that Musk’s title at SpaceX might as well be “God Emperor”—though he noted Musk is far from the only CEO dismantling traditional governance guardrails.
The governance structure is so extreme that it triggered a formal protest from some of the largest pension funds in America. In May, CalPERS CEO Marcie Frost, New York State Comptroller Thomas DiNapoli and New York City Comptroller Mark Levine, who oversee a combined $1 trillion in assets held for teachers, firefighters, police officers, and nurses, sent a joint letter to SpaceX calling its planned governance structure “the most management-favorable governance structure ever brought to the U.S. public markets at this scale.” The letter objected specifically to Musk’s veto power over his own removal as CEO; the mandatory arbitration clauses that bar shareholders from bringing class-action lawsuits; and the company’s reincorporation in Texas, a state that requires shareholders to own at least three percent of outstanding stock, meaning potentially hundreds of billions of dollars worth, just to bring a shareholder proposal. SpaceX ignored their objections.
Securities attorney Joseph Lucoski put it bluntly: “I practice every day with the exchanges and regulators, and they would never accept this onerous and one-sided a structure for an emerging growth company. Normally, you’d see a lot of pushback.”
David Trainer, CEO of research firm New Constructs, was equally direct. In a research note titled Going Boldly Where No One Has Gone Before, Trainer concluded, “We recommend that investors avoid this IPO.” His core argument: investors are paying nearly $1.75 trillion for a company burning billions in cash, where all the money flows to Musk and his vision, and where public shareholders will have “zero influence over how the enterprise is run.”
We’ve already seen what can happen when Musk is accountable to no one. He folded his AI company, which runs Grok, into his own rocket company in a transaction he controlled on both sides. Morningstar’s analysts called xAI a “material threat of value destruction” to SpaceX, and noted that because Musk owned and controlled both entities, he did not conduct the transaction at arm’s length, meaning ordinary safeguards against self-dealing did not apply.
You’re likely already on board his spacecraft
Most Americans who have a 401(k) or a pension don’t pick individual stocks. They invest in index funds that automatically buy a little bit of every company in a given index, like the S&P 500 or the Nasdaq-100. These funds rise or fall with the market as a whole, and as a result, they’re considered safe and sensible long-term investments. They stay that way because the indexes are diversified across hundreds of companies, and because those companies have to meet meaningful standards before they’re included.
Supporters of the SpaceX IPO note that index fund investors are not literally trapped into owning the company. Anyone who objects can sell their index fund and move to a different vehicle, and that is technically true. In practice, however, most people in 401(k) plans choose a handful of funds at enrollment and never revisit them. And pension fund beneficiaries have no choice at all. The passive investor, by definition, trusts the index to do the screening. So when the index stops screening properly, that trust gets diluted.
Because the index providers are rewriting their eligibility rules to accommodate SpaceX, passive index funds will be forced to sell portions of Apple, Microsoft, Nvidia and every other part of their portfolio to make room for a single low-float newcomer. They’ll have to do so at whatever price the market sets on the day of rebalancing. Such rejiggering isn’t something fund managers decide on their own. The mechanics are automatic: SpaceX goes into the index, the index fund buys it, and that purchase is funded by trimming a small piece of every other company. Bloomberg reported that roughly $24 trillion is tied to the S&P 500 alone, meaning the ripple effects of this one IPO likely will reach into pension plans and retirement accounts across the country.
Ecarma, writing in Oligarch Watch, identified a compounding effect that makes this dynamic even harder to escape. As index funds are forced to buy, SpaceX’s weighting within the index grows, triggering further purchases by other trackers. The result is a feedback loop that drives the price higher, independent of the company’s actual financial performance.
European funds aren’t obligated to play along, and one has already said no. AkademikerPension, a Danish fund managing $25 billion for academic professionals, has excluded SpaceX entirely. Its chief investment officer, Anders Schelde, called the company “grossly overvalued” and its governance structure “catastrophic.”
A company built on promises
Morningstar, one of the most respected independent research firms in finance, placed its fair-value estimate for SpaceX at $780 billion—roughly half the IPO target. Its analysts wrote that the company has been “significantly overvalued,” and added: “We don’t see Grok as one of the leading AI labs today.”
They have cause to be concerned. In 2025 alone, xAI burned through $12.7 billion in capital expenditures. That’s more than SpaceX spent on its entire Starlink satellite service and rocket launch business combined. SpaceX recorded cumulative net losses totaling $9.2 billion with an accumulated deficit of $41.3 billion.
And if investors are concerned about risk, there is also the matter of Musk himself. He runs multiple major enterprises simultaneously, has feuded with important allies, including within this administration, and the New York Times reported in detail last year that during the 2024 presidential campaign, his drug use—including ketamine, ecstasy and psychedelic mushrooms—went well beyond occasional use, and that he told people his ketamine consumption was so frequent it was affecting his bladder. Board members at his companies were reportedly alarmed: SpaceX is a large government contractor required to maintain a drug-free workplace.
Failure to launch?
IPOs are supposed to be voluntary. Investors choose to participate and accept the risks.
The difference with SpaceX is that the choice is being made for us all. The rules that were supposed to give the market time to evaluate a new company before it became part of our retirement savings have been waived. The profitability standards designed to ensure the companies in our index funds are viable businesses have been waived. The float requirements intended to protect us from price swings in thinly traded stocks have been waived.
Perhaps none of that will matter in retrospect if the IPO is a huge success and SpaceX takes off as hyped. But what if it explodes on the launch pad? Or breaks up just as it’s supposed to reach escape velocity? Forcing the nonconsenting public to carry this burden and bear a significant share of the downside risk isn’t real capitalism, say critics. It’s an abuse of the public fisc—and disturbingly on-brand in this era.
So he took his only profitable company, merged it with two massive money losers in a transaction that would not be permitted for anyone else and walks away with both a massive IPO to borrow against and a company with essentially manufactured losses as a tax write-off. Nice robbery if you can afford it.
An incredible heist.