is a reporter who writes about tech, money, and human behavior. She joined The Verge in 2014 as science editor. Previously, she was a reporter at Bloomberg.
I am excited about the SpaceX IPO for all the reasons investors shouldn’t be. Maybe it’ll be a real marquee moment for Silicon Valley, but I see the potential for a shitshow. After all, more than a decade ago, Musk said that SpaceX going public before going to Mars would be bad for the company.
Are private markets tapped out on cash to fund SpaceX ambitions? Elon Musk has been very clear about his feelings on publicly traded companies. Specifically: He doesn’t like them!
“I am hesitant to foist being public on SpaceX, especially given the long term nature of our mission.”
In 2013, Musk sent an email to SpaceX, which his biographer Ashlee Vance reprinted in his book, saying he didn’t want to take the company public until his Mars transport system is in place. Tesla went public because it “didn’t have any choice,” Musk wrote in a memo to SpaceX employees in 2013. “I am hesitant to foist being public on SpaceX, especially given the long term nature of our mission.”
An IPO can raise a lot of money for a company while letting longtime investors exit. But there’s a price. It’s possible the private market has overvalued the company or the financials don’t look as good as everyone hoped. And it’s much easier for investors to bail on a public company than a private one.
There are other things Musk cited in his 2013 memo, too. “Public companies are judged on quarterly performance,” he wrote. If SpaceX had a bad quarter as a public company, “short sellers would be hitting us over the head with a large stick.” The stock also would get beaten up every time something went wrong with a SpaceX rocket. (In non-Trump administrations, public companies are also scrutinized more closely by financial regulators than private ones — though Trump’s SEC seems to exist largely to get rid of old SEC cases.)
Data centers in space are the purported reason for acquiring xAI
Tesla has an inflated share price because of Musk’s fandom, which effectively precludes activists from taking over the board and ejecting its CEO; also, it is a mess. Given its business with the government, SpaceX could be worth taking a risk on. If SpaceX goes public, there’s a world in which a firm like Elliott Management buys shares and starts agitating. SpaceX’s sheer size may make that difficult for now, but if it has a couple bad quarters, that could change.
Data centers in space are the purported reason for acquiring xAI, Musk’s tremendously money-losing home of the social media platform formerly known as Twitter and its boutique child porn generator Grok. Maybe adding X and xAI to SpaceX will “make a sentient sun to understand the Universe and extend the light of consciousness to the stars!” SpaceX alone would have been a pretty clean IPO, one that would be easy to make a case for. But SpaceX plus xAI is a mess, not least because a number of governments are very unhappy about the aforementioned child porn.
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