Elon Musk's SpaceX prepares for a potentially monumental stock market debut
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What is the significance of SpaceX’s upcoming IPO?
It's time now for our daily tech and business report. Today, we are joined by Bloomberg reporter Anthony Hughes. SpaceX, as you heard, is going public. CEO Elon Musk announcing plans for what is expected to be the largest stock market debut in history. And Anthony, how big is it?
Hi, Scott. Yes, well, SpaceX's IPO is going to be a big event for financial markets. And The expectation at the moment is that the IPO could raise somewhere in the order of $75 billion, which would make this the largest IPO ever.
How much money could SpaceX raise and why is it considered the largest IPO ever?
So, you know, it's a massive event for everyone on Wall Street, and, you know, there's an opportunity for investors... There will be an opportunity for investors, big and small, to get a slice of this potentially, although, you know, there's a certain amount of expectation that this offering will be pretty hotly sought, although there's a level of debate, there's quite some debate at the moment about... whether the dreams and vision that's outlined in the prospectus by Elon Musk is a bit over the top, but certainly space offers a big opportunity. for the company to potentially do well over the long term.
One of the things that's always interesting about an IPO is that we get to learn more about the company because all of the filings that they have to do ahead of it. And we did not know a whole lot about the inner workings of SpaceX before this. What have we learned from some of those filings?
Yes, well, the filing that came on Wednesday afternoon really pulled back the curtain on a a whole bunch of pretty detailed financial information about the different aspects of SpaceX. And I think, you know, there's the numbers there and you can see that the company makes in the order, made in the order of $18, $19 billion of revenue last year and, you know, lost a fair bit of money and has a lot of businesses that are, in which they're spending very, very large sums of money, you know, capital expenditure to, you know, basically create these businesses.
What financial details did the latest SpaceX filing reveal about its revenue and expenses?
But, You know, I think really probably the thing that was a real takeaway there was that this is a complex company in the fact, given that the business has changed somewhat in the last, even the last, you know, six months or so because Elon Musk decided that SpaceX would buy his AI firm, XAI. So that, you know, complicated the financials a fair bit and also means that, you know, you have to, When you're looking at this company, you have to think about the space business. And then there's also what they're calling a connectivity business, which is the Starlink sort of satellite constellation slash telecommunications business. And then there's the AI part of the business. And also there's X, which used to be called Twitter, of course.
By selling his company to the public, theoretically, Elon Musk stands to lose some control. That's how an IPO works.
How will SpaceX’s dual‑class share structure affect Elon Musk’s voting power?
But it sounds like he's protecting that. He still plans to remain in control of this company, right?
Yeah, so as we've seen with a number of these large tech IPOs over the years, when you have a stock or an IPO that's expected to be in pretty strong demand... The founders usually have a degree of leverage in the way they can structure the share structure. So in this case, this is dual class. This will be what they call a dual class share structure. So basically, that means the public will be buying class A shares, which will be one share and one vote. Whereas Mr. Musk owns really all of the Class B shares, which have 10 votes for every one share. So the net result of that is that he will not necessarily own more than half the company, something like around, at the moment he owns something like around 40% of the shares outstanding, but his level of voting power is essentially around 85% at the moment.
Will investors still have influence after the IPO, or will Musk retain control?
So even when the company goes out and sells what was going to be only 4% of the company in this IPO. He's still going to maintain a very tight grip on the voting power of the company. So what that means is that the decisions that are made are going to be made by Elon Musk. And if shareholders don't really like them, they're not really going to have a
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Chapters
5 chapters
1
What is the significance of SpaceX’s upcoming IPO?
0:00–0:33
2
How much money could SpaceX raise and why is it considered the largest IPO ever?
0:33–2:00
3
What financial details did the latest SpaceX filing reveal about its revenue and expenses?
2:00–2:55
4
How will SpaceX’s dual‑class share structure affect Elon Musk’s voting power?
2:55–4:00
5
Will investors still have influence after the IPO, or will Musk retain control?
4:00–4:56
Speakers
2 identifiedMore from KCBS Bloomberg Tech and Business Report
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