Key insights
- Traders are speculating on SpaceX's IPO valuation, with some prediction markets suggesting it could exceed $4 trillion, surpassing Microsoft and nearing Alphabet's market cap on its debut. While a $4 trillion valuation is an outlier with low perceived odds, a $2.4 trillion valuation has a 38% probability, implying a 35% stock price increase. This high level of speculative interest and potential for a significant IPO debut could signal broader market sentiment towards high-growth, potentially unprofitable companies, influencing investor risk appetite.
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Could Elon Musk's rocket company rank among the Magnificent 7 on its debut day? Some traders are betting on it.
On prediction markets, some bettors figure that SpaceX's market capitalization will exceed $4 trillion by the end of its first day of trading, valuing the company more richly than Microsoft (MSFT) and possibly putting it in the neighborhood of Alphabet (GOOGL).1
Clearly, there's euphoric sentiment around what is slated to be the largest IPO in history, seen landing next week: With SpaceX expected to have about 13 billion shares outstanding, not counting underwriters' options to purchase extra shares, a value of $4 trillion-plus would mean that shares would close above $300 apiece.2 That implies a first-day jump of 125%-plus from its expected IPO price of $135.
If investors bid up SpaceX's stock to the highest point prediction market bettors think it could reach, the yet-to-be profitable company would rank among the most valuable firms in the world.
To be sure, the $4 trillion bet—which would put SpaceX somewhere in the top 5 of U.S. companies—is an outlier: The Polymarket event contract for it was recently priced at less than 2 cents, meaning the perceived odds of that happening, per bettors, are just 1%, down from 4% a couple of weeks ago.
Polymarket bettors place a 38% probability that SpaceX's closing market valuation will exceed $2.4 trillion. That bet implies the stock will end the day at roughly $185 apiece, a 35% premium to the expected IPO price.
At the other end of the range of bets, per Polymarket: There are low odds, of about 1%, that SpaceX's closing valuation won't exceed $1 trillion. That would suggest the stock would close at around $76, some 40% below its IPO price.
To be sure, some market watchers think something along those lines is possible, with an analyst earlier this month valuing the company at $780 billion.