You are a private company with a proven business and a strong demand from the market for more. You decide to go public, and you have two intentions in mind:
- You want to raise capital to fund your future initiatives.
- At the same time, vaguely promising your investors they will get some multiple of their investment by getting in early.
The long-term goal of SpaceX as a company was to build colonies on Mars, because the earth will become inhabitable in the future. The medium-term goal of SpaceX is to build AI data centers in space. The objective is to leverage the short or medium-term vision to fund the long-term company goals.
In about a week — SpaceX will IPO on June 11 2026 under the ticker SPCX at the Nasdaq stock exchange in the US for a target valuation of $1.75 trillion. A few thoughts jump off that statement:
- If you are valued at $1.75 trillion, why do you need to raise public funds for short-term goals? (I genuinely do not know the answer to this and so will stay away from second-guessing it.)
- $1.75 trillion US dollars is a lot of money. You would need to create significant demand from both retail and institutional investors in order to sell that many stocks. Unsold stocks in the market would be very bad for the IPO.
SpaceX: $1.75 trillion Liquidity#
As a Millennial, I am influenced by many books to invest via ETFs and Index funds. Don’t hand-pick stocks, just buy the market. The bright side for SpaceX is that a lot of millennials (& others) invest like I do. We all own tons of index funds.
The profound way to solve the SpaceX liquidity (or market demand) problem with an IPO is: you don’t need to convince all of us to buy SpaceX; just convince all the index fund owners to add SpaceX to their listing. Index funds don’t choose to buy, they’re forced to buy whatever is in the index, and that forced buying is the liquidity.
Index Funds: Shorting SpaceX?#
You may wonder, what convinces index funds to include such a new company like SpaceX into their listings. One way to think about it is shorting SpaceX: you own an index of the most valuable companies in the world and exclude SpaceX from it.
The $1.75 trillion price tag does put SpaceX into the most valuable companies in the world. Not including SpaceX is a direct signal that you support all of the top public listed companies but SpaceX. But the Nasdaq-100 and Russell are not in the business of cherry-picking stocks. Their index is covering the entire market.
Conclusion#
If you run a total market index, leaving SpaceX out is not a choice — it is a bet against one of the most valuable companies in the world. And that is not a bet a total-market index is in the business of making.
So they include it. And the moment they include it, all of us who own those funds are buying SpaceX — without ever deciding to. There is your $1.75 trillion in demand. Nobody had to be convinced of anything. Everyone gets SpaceX shares.