The clock is ticking down as SpaceX, the renowned enterprise helmed by Elon Musk that specializes in rockets, satellites, and artificial intelligence, gears up for a monumental stock market debut. Estimated at a staggering $1.75 trillion (£1.3 trillion), this flotation is poised to make waves.
Anticipation mounts as the company eyes a potential launch date of June 12 for its public offering on the US stock market. This impending event is generating a palpable buzz not only around SpaceX itself but also among its peers in the burgeoning space industry.
Fueling this enthusiasm is SpaceX’s optimistic projection that the global market for space technologies could reach an astronomical $28.3 trillion. Such figures have undoubtedly sparked interest and investment, reflecting a growing confidence in the sector’s future.
A testament to this burgeoning confidence is the impressive rise in the value of shares for the Seraphim Space investment trust. This trust, which supports space-focused companies across the US, Europe, and the UK, is set to make its debut on the FTSE 250 next Tuesday, further indicating the industry’s robust momentum.
Interestingly, while Seraphim Space does not invest directly in SpaceX, its manager, Mark Boggett, views the forthcoming flotation as ‘a powerful validation of space not just as a frontier, but as critical economic infrastructure.’
Despite these promising developments, some skepticism may linger, particularly regarding SpaceX’s ambitious plans. These include constructing solar-powered data centers in space—a concept that, while seemingly futuristic, appears increasingly feasible—and the more daunting endeavor of colonizing Mars.
Reaching for the stars: SpaceX could be launched on to the US stock market as early as June 12
The investor roadshow, which begins on June 4, should spell out the company’s goals – both commercial and interplanetary.
There will also be guidance on how private investors can apply for shares with 30 per cent of the sale reserved for them, far more than is usual.
Meanwhile, the interest in other space stocks is forecast to grow. If an extra-terrestrial foray is your summer investor adventure, here are the names to explore – and the way to secure a slice of SpaceX before the sale.
Looking ahead: SpaceX boss Elon Musk
SPACE RACE CONTENDERS
Amid the SpaceX buzz – and boosted by new Nasa plans for communities on the Moon – US, European and British space companies are in demand. Many play a key role in defence, with systems that can also protect Earth’s environment.
The S&P Kensho Final Frontiers index, which tracks US aerospace, satellite and related businesses, has surged by 47 per cent since January. Heading for the stratosphere has been Rocket Lab, whose price is 102 per cent higher than at the start of the year, thanks to the perception that this Californian business is, albeit much smaller, a SpaceX rival. Since January, shares in US satellite imagery provider Planet Labs have jumped by 147 per cent to $49.
European space players are also on a thrill ride. OHB, the German satellite operator, has risen by 279 per cent to €443 since January. SES, another satellite operator but Luxembourg-based, has bounced by 70 per cent in the same period, too. Meanwhile, the price of Filtronic, a British supplier of satellite communication components, has leapt by 115 per cent to 390p. SpaceX has a 15 per cent slice in the business.
Also moving upwards has been EutelSat. Since January, the French satellite group’s shares are up by 133 per cent to €3.98 thanks to its status as a competitor to Starlink – SpaceX’s internet division.
EutelSat owns OneWeb, a British firm with which it merged in 2023. The Government controls 11 per cent of OneWeb’s shares and has an additional golden share, having bailed out the firm in 2020.
Some of the biggest space businesses remain private, but you can gain access to them through Seraphim Space. Among the trust’s largest holdings are ICEYE, a Finnish satellite manufacturer, and D-Orbit, an Italian space logistics company.
Seraphim’s shares have surged 79 per cent since the trust featured in this column in March as a route to participate in space exploration and innovation. I followed my own advice and will stay on board,
hoping for more fun, but also acknowledging the risks. If SpaceX shares dazzle briefly before losing their lustre, this could cast a shadow over other space stocks.
SPACE X FUNDS
Before hitching a ride into space, it’s worth checking whether your existing investments in aerospace and defence are also competitors in the cosmic race. AJ Bell lists the European group Airbus as well as Lockheed Martin, the US corporation that makes exploration vehicles such as Nasa’s Orion.
Another US company, Northrop Grumman, has just won a $398m contract from the US Space Force to devise a communications satellite with advanced anti-jamming capabilities.
Through its GKN Aerospace subsidiary, Melrose Industries – a UK company – supplies parts for the European Space Agency Ariane rocket programme.
AJ Bell also cites the FTSE 100 defence titan BAE Systems, which in 2024 bought the American firm Ball Aerospace to expand into satellites, sensors and spacecraft. As the hype for SpaceX builds, some uncomfortable facts may be overlooked. The company as a whole runs at a loss – Starlink is the only profitable division. The need for more funds, particularly for its AI operations, is the main reason that Musk (pictured) has decided to list the company publicly.
He is chief executive, chief technology officer and chief engineer at SpaceX – a set of titles that remind us investing represents a bet on this mercurial multi-billionaire who is also boss at Tesla, as Darius McDermott of FundCalibre points out. He also describes the valuation of the company as ‘extreme’.
The returns from Tesla since its stock market debut in 2010 – the shares have grown from $10 to $437 – may suggest it can be worth backing Musk, even when his ventures seem expensive. But today’s higher interest rates are likely to make it more difficult for Musk to deliver.
SpaceX may be an investment you have already made – if you have savings in the popular Baillie Gifford investment trust Scottish Mortgage. SpaceX accounts for 19 per cent of the trust’s assets and has been its single greatest contributor to returns.
The trust will not be selling its SpaceX shares at the flotation, such is its confidence in the company. Manager Tom Slater describes SpaceX ‘as a dual monopoly, being both the world’s dominant rocket launch provider and a global connectivity utility through Starlink’.
Scottish Mortgage is my portfolio’s bit of derring-do. But if you have cash in some other Baillie Gifford funds – Edinburgh Worldwide, Monks, Schiehallion and US Growth – you will also have exposure to SpaceX.
RIT Capital Partners is the only other UK fund to have invested in SpaceX, backing Musk’s ambition ‘to go forth, be out there among the stars and expand the scope and scale of human consciousness’.
The flotation means that membership of this club will no longer be exclusive.
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