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SpaceX is scheduled to hold its initial public offering of 555.6 million shares on Friday, June 12, 2026, with final pricing set for the close on June 11, 2026. However, this is not a normal IPO by many measures since the price has already been set at $135 a share (take it or leave it), the offering targets a retail allocation of 30% (whereas 5% to 10% is typical) and is said to be four-times oversubscribed. Keep in mind that many institutions will submit bids late in the process, and there are reports that several big institutions have already placed individual orders as large as $10 billion, but in this case, underwriters will stop accepting institutional orders on Wednesday at 4pm. Retail bids will be accepted after the Wednesday deadline, but in the end, the offering is expected to raise $75 billion. This would be more than 2.5 times the record $29.4 billion Saudi Aramco (TADAWUL: 2222 – $7.24 USD) IPO in 2019. SpaceX will be listed on the Nasdaq Exchange under the ticker symbol SPCX, and the anticipated $1.77 trillion valuation would make SPCX the eighth largest company in the world.
Experts such as Aswath Damodaran, NYU’s Dean of Valuation, as well as the research firm, Morningstar, have written that the SpaceX offering is significantly overvalued. Others say much of this valuation gap is due to the inability to price the artificial intelligence and social media assets of xAI, a subsidiary of SpaceX. However, nothing seems to dampen the enthusiasm for this IPO even the fact that xAI and SpaceX are being sued by Mississippi residents for the “omnipresent and inescapable” noise from a power plant fueling data centers. Nor does it seem dampened by the fact that the US is currently launching new strikes on Iran in response to Tehran shooting down a US Apache helicopter in the Strait of Hormuz. Nor by the US Energy Information Administration announcement that the oil stockpiles of the world’s largest economies are close to the lowest levels seen since at least 2003. In addition, CPI data for the month of May will be reported prior to the IPO, and since WTI crude futures (CLc1 – $88.20) were up 46% YOY in the month of May, this release could be negative for financial markets. All in all, it would not be surprising if the market was wobbly ahead of Friday’s debut of SPCX.
Many experts are turning bearish on the equity market and feel that the SpaceX IPO represents a classic bubble ending. We do not think so. In our opinion, the SpaceX IPO could be just the beginning of the final stage of a bubble, but with a dramatic finale yet to be seen. By that we mean the enthusiasm for AI and semiconductors could now begin to shift from the nuts and bolts of producing AI to AI implementation and the opportunities of space. Elon Musk has been years ahead of most mortals and the value of the Starlink global satellite constellation and orbital rocket transportation is obvious, but what plans Musk has for xAI and communication infrastructure and managing space-to-ground data traffic will be fascinating to see.
In short, this IPO is not just about SpaceX but also about the “Musk mystique” which translates into Elon’s genius and vision. Keep in mind that Tesla Inc.’s (TSLA – $396.68) amazing performance since its 2010 IPO or since the early years of 2011 to 2012, has created an estimated 3,000 to 5,000 millionaires. We expect many of them will be active investors in SpaceX, a company already more “established” than Tesla was in 2010.
Although it is encouraging to see that crude oil prices are down from April’s levels, we are worried about May’s inflation report. On the other hand, recent reports had encouraging news about employment. The May employment report was a big positive surprise with a gain of 172,000 new jobs, but equally important, another 93,000 jobs were added due to positive revisions to March and April. The unemployment rate was unchanged at 4.3%. (Without rounding, the unemployment rate actually declined 0.4%.) The majority of job growth was in the leisure and hospitality sector, where hiring had been weaker in 2025. Other sectors with job gains were government and healthcare. Nonetheless, the disparity between the two BLS surveys continued in May with the establishment survey showing job growth of 0.3% YOY and the household survey showing a job loss of 0.3% YOY. This is disturbing because job losses are characteristic of recessions. See page 3.
In the establishment survey, the 6-month average of job gains rose from 70,170 to 92,000 in May, which is the highest level since February 2025. The household survey showed a 6-month average of job losses of 164,830 in May and has been in negative territory for five consecutive months. The difference is that the establishment survey includes all employees issued a W-2, whereas the household survey also includes legal and illegal employees, unpaid home workers, and/or any working person not receiving a W-2. In short, it is a broader survey of employment. This could help explain the disconnect between the two surveys and the disconnect with sentiment indicators. See page 4. However, sentiment indicators have been warning of a recession for the last six years, not just the last six months.
May’s data on earnings was a highlight. Average weekly earnings grew from $1089.37 in April to $1092.08 in May, representing a 4.2% YOY increase. This 4.2% gain is important since inflation in May will be reported later this week, but in April it was running at 3.8% YOY. In short, real earnings are growing, but modestly, which reveals why inflation is a tax on households. The current inflation driver is energy prices, which makes the current price of WTI, down from $103.34 at the end of April, a hopeful sign for consumers. See page 5.
May’s ISM nonmanufacturing index was less positive than the ISM manufacturing survey since only four of the nine components rise in the month, one of which was prices paid. However, all but one component, employment, remained above the 50 benchmark indicating expansion for the sector. The combined ISM manufacturing/nonmanufacturing employment index rose from 94.4 to 96.5 in May, which is a good sign for the US economy. See page 6.
The NFIB small business optimism index fell 0.6 points to 95.3 in May, its lowest level since October 2024, and it was the third consecutive reading below the long-term average of 98. The employment index was essentially flat at 100.3, above the long-term average of 100, but below the 2025 average of 101.2. Net respondents planning to increase employment fell to 9%, the lowest since May 2020. A net 34% plan to raise prices, the highest since July 2022. Actual earnings and actual sales improved to -15 and -5, respectively. The -15 reading in actual earnings is the second-best result since December 2021. See page 7.
The LSEG IBES and S&P Dow Jones consensus earnings estimates for 2026 are $340.07 and $336.27, respectively. For 2027, earnings forecasts are $395.95 and $392.41, respectively. This means the S&P 500 is trading at 21.7 times 2026 and 18.7 times 2027 estimates. These multiples are not indicative of an overvalued market, particularly if inflation trends lower later this year. In short, we expect upcoming equity offerings could generate volatility in the near term, but we remain a long-term buyer of equities on weakness.
Gail Dudack
PLEASE NOTE: Unless otherwise stated, the firm and any affiliated person or entity 1) either does not own any, or owns less than 1%, of the outstanding shares of any public company mentioned, 2) does not receive, and has not within the past 12 months received, investment banking compensation or other compensation from any public company mentioned, and 3) does not expect within the next three months to receive investment banking compensation or other compensation from any public company mentioned. The firm does not currently make markets in any public securities.
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