SpaceX goes public and is now worth trillions. What happens now?

0:00It's Consider This, where every day we go deep on one big news story. Today, SpaceX debuts on the stock market. That's the Nasdaq opening bell, Friday morning. It was a big day for the tech market and SpaceX and for regular investors who can now buy the company's shares. That is because the SpaceX IPO initial public offering shattered records valued at$75 billion. And that was before today's trading started. And let me tell you, if people had told me this was going to happen, I was like, man, you must be smoking some really good crack. Because I think this company is going to fail. Watching the opening bell from Starbase in Texas was CEO Elon Musk.

0:51In fact, I told people this. I said, look, we're probably going to fail, but we should give it a try. Because if we don't, if there's not a new company that enters space, we will never be a truly space-bearing civilization. That historic IPO is likely to make Musk the world's first trillionaire. And while SpaceX is not profitable yet, investors have big expectations for the company in space and artificial intelligence. You know, while the other aerospace companies, they build good rockets and everything, they were simply not pursuing the technology that's necessary to make life multi-planetary.

1:31To make Star Trek, to make the exciting science fiction futures that we've read about real. And that's what SpaceX is all about. It's to take the fiction out of science fiction. Consider this. One of the world's biggest companies is now publicly traded, and it's leaning heavily into space and AI. What does that mean for us humans here on Earth? From NPR, I'm Mary Louise Kelly.

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3:10It's Consider This from NPR. Elon Musk's company SpaceX had a banner. First day in the stock market, the company is now valued at more than$2 trillion. That is after an already record-breaking IPO. To make sense of it, we are joined by MPR's Jeff Brumfield, who covers space, and John Riewich, who covers tech. Hi, you two. Hey there. To the moon, Mary Louise. I hope so. Okay, so John, kick us off. What more can you tell us about this IPO and SpaceX's first day trading? Yeah, the IPO was the biggest in history. SpaceX raised$75 billion. That's more than twice the previous record. And demand was high for the IPO.

3:50That was borne out actually when It started trading on the Nasdaq today. The stock opened at$150, which was above expectations, rose to as high as$176 during the day, lost a little steam, and ended just shy of$161. But the bottom line is that it was up over 19 % on the day. A lot of early investors and employees in the company got rich today or richer, including Elon Musk. Who is already incredibly, insanely rich. How much richer is Elon Musk at the end of today? Yeah, it's hard to know exactly, but a little back of the envelope math, you know, Musk owns close to 40 % of SpaceX's shares. So his stake is now worth around$800 billion with a B.

4:34Plus he owns a chunk of Tesla shares and has stakes in other companies. So he probably became the planet's first trillionaire today. Holy cow. Okay, this closing price has the value of SpaceX well above$2 trillion, trillion with a T. Jeff, you track SpaceX. Is it worth that much? I think even SpaceX's supporters would tell you the business as it is today is not worth$2 trillion. According to the financial documents released ahead of the IPO, SpaceX is actually losing money. It lost$5 billion last year and another$4 billion in the first quarter of this year. A lot of those losses are due to the AI side of the business, which used to be Musk's other company, XAI.

5:18It's been burning cash at this incredible rate. It's sort of a financial black hole. if you will. Even without the AI losses, though, the rocket and satellite company are probably worth far less, somewhere in the hundreds of billions of dollars. Yeah, just to add on to what Jeff is saying here, analysts at the investment research company Morningstar did a deep dive into SpaceX's core businesses. They crunched some numbers around what they think is likely or probable at this moment in terms of the company achieving its goals in space and AI. And they think a fair value per share of this company is$63, which is a lot less than it is now.

5:53Nicholas Owens is a financial analyst at Morningstar. I would argue that for the next week, really what you're looking at is simple supply and demand. Today, there's limited supply and exuberant demand. Yeah, on the supply front, the company only floated about 4 % of its outstanding shares, so not much. In terms of demand, there's a lot of hype and excitement. But even for people who aren't actively buying these shares, SpaceX is likely to end up in their portfolios because it's being included in a few stock indexes earlier than normal. So, Jeff, back to you. What does the company need to do to actually meet these very high-flowing expectations?

6:30Well, I mean, I think the company itself, I just want to read their mission statement in their documents, Mary Louise, because it really gives a sense of their ambition. Our mission is to build the systems and technologies necessary to make life multi-planetary, to understand the true nature of the universe, and to extend the light of consciousness to the stars. That might be worth$2 trillion. No big deal there. Yeah, right. Exactly. The first step to getting to that kind of evaluation is to build this giant rocket called Starship. Now, Starship is behind schedule. It's costing the company billions to develop.

7:04But if it works, it will reduce the cost of sending things to space. Speaking at the opening bell today, SpaceX President Gwen Shotwell sounded a defiant note as she addressed her employees. She said they've proven the skeptics wrong before. The thank yous go to all of you for hanging in there, for keeping a straight spine as the doubters doubt. But Starship is a lot more complicated than SpaceX's other rockets. So for all these dreams to happen, it's going to take a lot of work. I don't think anyone's ever been able to build a rocket quite like it. We'll have to see what happens. Worth noting, today's IPO is the first of several blockbuster IPOs we expect this year.

7:47Jeff, tell us about those. Yeah, that's right. I mean, the other big two are Anthropic and OpenAI, the big AI companies. They're each ballparked at around a trillion dollar valuations. And like SpaceX, there's a lot of fuzziness about how much they're actually worth. A lot of this comes down to we don't really know just how big the market is for AI or what it's going to be used for. So, you know, a lot of this stuff is really betting on the future, I'd say. John, just to let you land us and circle back around to the possibly, as of today, trillionaire Elon Musk. I mean, we've talked a lot about that, just how much money that is, but how much more powerful is he as a result of this IPO?

8:30I think you could say a lot. When companies go public like this and start selling shares to ordinary people, it usually means that those investors will be able to have more say in how companies run. But here, the investors will have very limited ability to check Musk. He has an iron grip on the company. He's CEO. He will control the board of directors. He holds more than 80 % of the voting power of shareholders. Elon Musk obviously has his fans. There are a lot of believers. There are a lot of people buying the stock today because they think his vision is brilliant, frankly. He's highly controversial also.

9:08And so I think today he ends up more powerful in some ways than ever. And he's really put himself at the center of his own universe. And for John Rewich and Jeff Brumfield, thanks to you both. Thank you. This episode was produced by Alejandra Marquez-Hainse with audio engineering by Ted Meebane and Becky Brown. It was edited by Courtney Dording and Patrick Jaron Wadananen. Our interim executive producer is Courtney Dorning. And a big thank you to our Consider This Plus listeners who support the work of NPR journalists and help keep public radio strong. Supporters also hear every episode without messages from sponsors and unlock bonus episodes of Consider This.

9:53You can learn more at plus.npr.org.

10:00It's Consider This from NPR. I'm Mary Louise Kelly. This message comes from Monarch. Monarch is the personal finance app that brings all your accounts into one place so you can track spending, budgets, investments, debt, and goals in one clear view. Monarch automatically surfaces insights to prevent wasted spending, showcase savings opportunities, and save you time above all else. Manage money the modern way and get half off your first year of Monarch Core with code VALUE at monarch.com. This is Ira Glass. On This American Life, one thing we like is a good mystery. Sometimes about really big things, but most times, the little mysteries are the best.

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