SpaceX IPO Could Deliver Early Gains But Valuation Looks Rich, Analyst Warns

Benzinga reported Sunday that prominent investor Gary Black of The Future Fund LLC expects a short-term surge for SpaceX shareholders after the company’s eventual IPO. The predicted lift would stem from forced buying by funds tracking the Nasdaq-100 and S&P 500. Black, however, stopped well short of endorsing the stock at its current private-market price.

Index Inclusion Could Engineer an Early SpaceX IPO Pop

Black laid out his reasoning in a post on X over the weekend. When a company of SpaceX’s scale joins major benchmarks, passive funds and index-tracking ETFs must purchase shares to match their target weightings. That mechanical demand can push a newly listed stock higher in the immediate aftermath of listing, regardless of underlying fundamentals. Black acknowledged this dynamic could reward early-stage investors who get in before the debut.

The SpaceX IPO valuation, currently pegged at roughly $2 Trillion in private markets, is what concerns him beyond the opening session.

Black Questions the $2 Trillion SpaceX IPO Valuation

Black was direct about his reservations. He described SpaceX as overpriced at its present implied market capitalisation, pointing to the company’s reported earnings of $6.6 Billion alongside revenue of $18.7 Billion. In a follow-up post, he argued that no company commanding a $2 Trillion market cap typically carries a multiple of roughly 300 times EBITDA. He said that figure alone should give prospective investors reason to hesitate before buying in.

A History of Rapid Index Additions Sets the Precedent

The index-inclusion argument is not new. When Tesla joined the S&P 500 in December 2020, passive funds were compelled to absorb a massive position quickly. That event produced one of the most dramatic forced-buying episodes in index history. A SpaceX listing would likely trigger a comparable scramble, particularly given the company’s anticipated scale at debut.

What the IPO Debate Means for the Broader Market

The SpaceX IPO valuation debate arrives as investors are already scrutinising elevated multiples across the technology sector. A listing at $2 Trillion would make SpaceX one of the largest debuts in stock market history. Black has separately voiced concern that any merger between SpaceX and Tesla could dilute Tesla’s standalone value by as much as 25%, adding another layer of risk for shareholders in either vehicle.

For now, the IPO timeline remains unconfirmed. Elon Musk has not publicly committed to a listing date.

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