SpaceX and the IPO moment

Editor’s note: This article first appeared in Money Matters, a newsletter from Britannica Money, on June 3, 2026.

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Watching a private company enter the public markets.

© KOTO/stock.adobe.com; Photo illustration Encyclopædia Britannica, Inc.

For years, we’ve watched SpaceX evolve from an ambitious private rocket company into what some might call a global obsession, with its reusable rockets, Starlink satellites, multi-billion-dollar defense contracts, and talk of someday colonizing Mars. And alongside founder Elon Musk’s famously outsize ambitions sat another eye-popping figure: the company’s soaring market capitalization after its June 12, 2026 initial public offering (IPO). Whether you love Musk or can’t stand him, it’s been hard not to watch the company’s rise with a touch of fascination. 

That’s part of what made the SpaceX IPO so compelling. We’ve spent years watching the story unfold from the sidelines. Now we’ve finally been invited to buy a piece of it. But hot IPOs have a way of blurring the line between investing in a company and chasing a story. And as anyone who lived through the dot-com bubble can tell you, the story can be right even when the price is wrong. 

Long before a company goes public, its founders typically spend years raising money from angel investors, venture capital firms, and other private investors. Each funding round helps finance growth while establishing a new valuation. By the time a company reaches the IPO stage, years of capital—and often a substantial amount of wealth creation—have already flowed into the business.

Ahead of the IPO, investment banks step in to help determine an IPO price and act as a sort of guarantor of that price. (For the SpaceX deal, Goldman Sachs took the lead, with JPMorgan Chase and several other Wall Street banks participating.) In a typical IPO, investment bankers also prepare the prospectus and other regulatory filings, and guide the company through the process. Once the shares begin trading on a stock exchange, buyers and sellers take over.

An IPO isn’t just a way to raise money or give the public access to a stock. It’s also an opportunity for founders, employees, and early investors to convert at least some of their paper wealth into cash. That’s not necessarily a warning sign—many have spent years helping build the company. But it’s worth remembering that when a company goes public, the investment public is buying in while insiders are taking money off the table.

Once a stock begins trading, the market starts the messy process of price discovery—buyers and sellers constantly negotiating what a company is worth. For mature businesses, we compare price to familiar fundamentals such as earnings, cash flow, and profit margins. But companies like SpaceX don’t fit neatly into those traditional frameworks.

Instead, we might turn to certain alternative fundamentals. Metrics such as total addressable market (TAM), serviceable addressable market (SAM), and serviceable obtainable market (SOM) attempt to estimate how large a company’s future opportunity could become if its business model succeeds. Other measures look at customer growth, lifetime value, cash burn, and operational efficiency. To invest in a growth company, you don’t just value the company that exists today—you try to guesstimate the value of the company that might exist years from now.

For example, during its early years as a public company, Amazon.com confounded traditional valuation models as management poured cash back into growth rather than maximizing short-term profits, forcing investors to decide whether they were buying a retailer, a technology platform, or something else entirely. It worked for Amazon, but similar arguments were made about hundreds of other dot-com darlings, most of which never lived up to their promise.

Before you jump into SpaceX—or any narrative-driven stock—take a step back and ask yourself if it fits in with your investment goals and strategy. Here are a few ideas to get you started:

The SpaceX IPO has been closely watched by Wall Street, not just it’s the largest IPOs in history, but also because it’s one of several high-profile private companies eager to enter the public market. If the market embraces SpaceX, OpenAI and Anthropic may soon follow. If enthusiasm cools, they and others may wait.

Whether you participated in the SpaceX IPO or you’re waiting for the next one, the lesson is the same. Investing isn’t just about identifying a great story. It’s about deciding what that story is worth—and whether the price you’re being asked to pay leaves room for reality to catch up.