Elon Musk announced plans on Wednesday for a significant public stock sale of his space company, SpaceX, which is currently incurring substantial operational losses. A recent filing reveals SpaceX lost $2.6 billion from operations last year, despite generating $18.7 billion in revenue. The losses continued into this year. Although the filing does not specify the exact amount Musk intends to raise, reports estimate it will reach approximately $75 billion. This would surpass the previous record set by Saudi Aramco, which raised $26 billion in its public offering seven years ago.
SpaceX, officially Space Exploration Technologies Corp., plans to use the funds to support projects aimed at placing humans on the moon and Mars, contributing to its mission of making humanity an intergalactic species. The prospectus highlights the company’s aim to prevent humans from facing the same fate as dinosaurs. The document has a somewhat futuristic tone, outlining Musk’s unique compensation plan, which includes achieving milestones like establishing a permanent human colony on Mars with at least one million inhabitants.
The prospectus notes that the stock sale alone could make Musk the world’s first trillionaire, with Forbes currently estimating his net worth at $839 billion. SpaceX’s operations span reusable rockets and multiple ventures, some flourishing while others face challenges. Starlink, a major revenue generator, produced $4.4 billion in operating income last year. It uses a network of 10,000 satellites to deliver internet to 10 million users across 150 countries.
There are, however, struggling segments within SpaceX, notably two recent acquisitions — Musk’s social media platform X, previously known as Twitter, and his artificial intelligence venture, xAI. These acquisitions have been criticized by some SpaceX investors as financial burdens since they incur significant losses, with the AI business alone losing $6.4 billion in operations last year.
Despite challenges, SpaceX’s core business, focused on rocket production and launches, benefits from substantial government contracts. These contracts, worth $6 billion over the last five years, include partnerships with NASA and the Defense Department. A fifth of SpaceX’s revenue last year came from federal sources, raising concerns about potential favoritism stemming from Musk’s ties to the Trump administration. Musk, who was a major contributor to Trump’s campaign and maintained support despite ups and downs, could see these partnerships questioned as political landscapes change.
The filing details Musk’s compensation beyond his $54,080 annual salary, unchanged since 2019. Stock grants are structured in 15 nearly equal portions, each 67 million shares, vesting as SpaceX reaches specific market capitalization milestones. Achieving a $7.5 trillion market value or establishing massive space data centers are among these targets. Moreover, Musk’s disbursement control over SpaceX is strong. He and selected shareholders receive a special class of stock with 10 votes per share, allowing them significant influence, including electing most of the board. The company warns potential investors of limited influence over corporate decisions.
SpaceX will be able to promote its stock offering to investors, known as a “road show” in Wall Street terms, 15 days post-filing, scheduled for June 4.
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