A satellite internet company dressed as a space empire
SpaceX filed its S-1 prospectus on 20 May, targeting a Nasdaq listing at a valuation of roughly US$1.75 trillion, with some reports citing nearly US$2 trillion. The company wants to raise up to US$75 billion, more than three times Alibaba’s record US$22 billion float in 2014. In New Zealand dollar terms, the valuation equates to roughly NZ$3 trillion and the capital raise to NZ$87-127 billion.
Those are extraordinary numbers for a company that lost US$4.9 billion on revenue of US$18.7 billion in 2025. In Q1 2026 alone, losses hit US$4.28 billion on just US$4.7 billion in revenue, an eightfold increase from the prior year. The accumulated deficit stands at US$41.31 billion.
The most revealing line in the filing is not the losses. It is where the capital goes.
Sixty cents of every capex dollar went to someone else’s AI company
SpaceX directed approximately 60% of its 2025 capital spending, around US$10 billion, to xAI, Musk’s separate artificial intelligence venture. In Q1 2026, total capex reached US$10.1 billion, with US$7.72 billion attributed to AI. Losses at the AI business ballooned to US$2.47 billion in Q1 2026 alone.
Public investors buying SpaceX shares are not primarily funding rockets to Mars. They are funding the build-out of an AI company they do not separately own, cannot separately value, and cannot separately exit. Cash on hand fell from US$24.75 billion to US$15.85 billion in a single quarter. At that burn rate, the IPO proceeds are not growth capital. They are oxygen.
Meanwhile, the actual space launch business is shrinking. Space revenue fell 28.4% in Q1 2026 and losses widened to US$662 million from US$70 million a year earlier. What keeps the lights on is Starlink, the satellite internet arm, which accounts for nearly 70% of revenue with 10.3 million subscribers across 164 countries. Strip away the Mars rhetoric and this is a broadband company with a very expensive side habit.
Governance that makes dual-class look democratic
Musk will serve as CEO, CTO, and chairman after the listing. His 93.6% of Class B stock, carrying 10 votes per share, gives him 85.1% of combined voting power. Public shareholders will have no meaningful ability to challenge capital allocation, related-party transactions, or strategic direction.
His compensation package is indexed to outcomes most investors will never see realised: up to 1 billion Class B shares if SpaceX reaches a US$7.5 trillion valuation and establishes a permanent Mars colony with at least one million inhabitants. The filing also discloses 36 pages of risk factors and flags US$530 million in expected legal costs from absorbing Musk’s other companies.
Greg Martin, cofounder of Rainmaker Securities, told the Globe and Mail that “you are not going to justify a US$1.75-trillion or US$2-trillion valuation for SpaceX using traditional fundamental metrics alone.” That is not reassurance. That is the pitch.
What this reprices for New Zealand
Rocket Lab is the most direct local exposure. Peter Beck’s company reported record Q1 2026 revenue of US$200.3 million, up 63.5% year-on-year, with a record backlog of US$2.2 billion. A public SpaceX legitimises the sector and draws investor attention to space. But it also creates a valuation benchmark that could compress multiples for smaller players if SpaceX’s unit economics disappoint.
Starlink already competes in New Zealand’s rural broadband market. Whether public markets continue to fund its expansion directly affects NZ telcos and the rural businesses that depend on satellite connectivity.
KiwiSaver providers and institutional funds face a forced decision. NZ Super Fund, ACC, and the major providers will need to assess SpaceX as a potential holding. New Zealand’s FIF tax regime, which taxes offshore equity annually on unrealised gains, means mark-to-market swings in a volatile growth stock create tax liabilities even in loss-making years. That structural friction will shape how NZ portfolio managers approach the listing.
New Zealand’s space sector contributed NZ$1.69 billion to the economy and supported 12,000 jobs in 2018-19, according to a Deloitte report cited in the government’s 2023 National Space Policy. How global capital prices the space economy after this IPO will directly shape the investment environment for every NZ company in the sector.
Faith-based investing at a trillion-dollar scale
Reena Aggarwal, professor of finance at Georgetown, noted in April that even with the hype around Musk, SpaceX still needs a receptive public market. The market is likely to oblige. Retail demand for Musk exposure is enormous, and index inclusion would force passive funds to buy regardless of fundamentals.
But the S-1 tells a clear story. This is a company burning cash faster than it earns it, channelling the majority of investment into a related-party AI venture, offering shareholders no governance rights, and asking to be valued at nearly US$2 trillion on the promise that one man’s vision will eventually justify the price. The last time investors were asked to make that kind of bet at this scale, the company was called Tesla. It worked, until it didn’t, and then it worked again. Whether you find that pattern reassuring says more about your risk tolerance than your analysis.
Sources
- Globe and Mail: SpaceX IPO bets $2-trillion on Musk’s ambitious rockets-to-AI vision (2026-05-21)
- TechCrunch: The SpaceX IPO filing has arrived (2026-05-20)
- CNBC: SpaceX confidentially files for IPO, setting stage for record offering (2026-04-01)
- RNZ: SpaceX files for IPO, sources say, offering investors a stake in Musk’s moon and Mars ambitions (2026-04-01)
- Rocket Lab Announces First Quarter 2026 Financial Results (2026-05-07)
- National Space Policy – May 2023 (2023-05)