By Ross Kerber, Echo Wang and Joey Roulette
BOSTON/NEW YORK, Dec 11 (Reuters) – Investors welcomed reports that SpaceX (SPAX.PVT) was mulling a potential IPO that would help fund Elon Musk’s Mars ambitions and value the rocket and satellite company at more than $1 trillion, as some have been waiting for years to buy into the company.
SpaceX is looking to raise more than $25 billion in an initial public offering that could come as early as June, a person familiar with the matter told Reuters.
Though it is a high-risk and capital-intensive business, the demand for shares from retail investors will be “substantial,” Shay Boloor, chief market strategist for Futurum Equities Research, said in an interview.
“It’s going to be the craziest IPO in the history of the stock market. If it’s trying to go for $1.5 trillion, I wouldn’t be surprised if it goes up to over $2 trillion once it gets open,” Boloor said.
SpaceX CEO, chief designer and founder Musk’s well-documented unorthodox management style and anti-establishment rhetoric are not a deterrent, investors and analysts said.
Of the five companies Musk currently leads, including infrastructure firm The Boring Company and artificial intelligence startup and X owner xAI, his oversight of the only publicly traded one – electric vehicle maker Tesla – has been fraught with civil fines and clashes with regulators.
He once called U.S. Securities and Exchange Commission officials “bastards” after they stripped him of his role as chairman at Tesla and restricted his social media use over his 2018 tweet saying he had “funding secured” to take Tesla private.
Musk, who is already the world’s richest person with a net worth of more than $460 billion, threatened to leave Tesla earlier this year if the board did not approve an unprecedented 10-year, $1 trillion pay package. Tesla’s shares and sales suffered after Musk’s four-month stint running the Trump administration’s Department of Government Efficiency.
The risks and drama an innovative CEO like Musk brings to a company are “part and parcel of being an investor in these types of companies, the reward has to compensate holders for the risk,” said Christopher Marangi, co-chief investment officer for value at Mario Gabelli’s GAMCO Investors.
GAMCO has exposure to SpaceX through its investment in EchoStar, which took the company’s shares as part of a spectrum deal in September.
It is “too speculative” to say whether GAMCO would buy more shares in a SpaceX IPO, but “conceptually we would be excited for the prospect of space-oriented companies,” Marangi said, noting that GAMCO also has a stake in Telesat.
