SpaceX's IPO, which aims to raise $75 billion, could surpass the previous record set by Saudi Aramco's $25.6 billion IPO in 2019. With a proposed valuation of $1.8 trillion, SpaceX would rank among the most valuable publicly traded companies, alongside giants like Alphabet and Apple.
This valuation is significantly higher than those of other tech companies at their IPOs; for instance, Nvidia started at $600 million and has grown to a market cap of $4.8 trillion. Jay Ritter, a finance professor, notes that such a high starting valuation may limit SpaceX's future growth potential, as companies with elevated price-to-sales ratios often struggle to meet optimistic expectations.
The trend of high valuations may continue as other AI firms approach public markets, but Ritter warns that the high price means many factors must align for success. Investors should be cautious and consider the implications of paying a premium for shares in a company that has been private for 24 years, unlike many tech firms that went public much earlier in their development