Why I won’t be buying into SpaceX
Tuesday, 9 June 2026
Martin Hawes is a financial writer and presenter, and has written 25 personal finance books. He writes a weekly column.
OPINION: The world’s richest person is selling a bit of one of his businesses. In history’s biggest IPO, Elon Musk and friends are selling about 4% of SpaceX.
I had anticipated this IPO and being very keen on tech investments I read a lot about it. More recently I had also read about the nature of the offer, the value of the business, its future governance.
My first consideration was this: if Musk is selling, should I be buying? After all, Elon Musk did not become the richest person in the world by selling stuff cheap. He is very bright and brilliant at business – I do not think Musk would ever be a buddy, but I salute the way he can make things happen within his various businesses.
In fact, buying into SpaceX is very tempting and Musk himself is a part of the temptation. If I bought shares in the company, Musk would effectively become my business partner. We would be on the same side (albeit with quite different amounts invested). I don’t have to like Musk, but when it comes to doing business, I would rather have him on my side than playing against me.
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Moreover, there are some good businesses going into this IPO: Starlink continues to grow strongly. The business of launching rockets seems to be ahead of any competitors: they launched 350 rockets last calendar year and there is plenty of development to come, especially bigger reusable rockets. There is also xAI that will get some development cash from the IPO.
And then there is the blue sky. First up, we could see orbital datacentres for AI – these will use solar energy and will beam data back to earth. No more huge warehouses draining electricity in a paddock near you; these datacentres will float in space. Some analysts think that this is further off than the company thinks, but Musk has moved quickly before and confounded the experts.
A moon shot is possible but the most audacious of plans is for colonising Mars – ie, human settlement on the red planet; Musk gets a bonus if there is a settlement of 1 million people on Mars.
The price of the shares is the first negative: the value of the whole company is set at US$1.77 trillion – that is a lot of money for a company that does not make profits and unlikely to for years. The price represents 100 times sales – an extraordinarily high number. It is many times more expensive than anything that ever came out of the dotcom mania.
I suppose Mr Musk kept a straight face when he first suggested that price, but that must have been hard. I agree that there are few companies like SpaceX and fewer still businesspeople like Elon Musk, but the price must assume that all the future plans (including Martian settlement) are executed perfectly.
Second are the governance arrangements and voting rights. After the IPO, Musk will have around 40% of the shares but he will exercise 82% of the voting rights. Musk is ensuring that he maintains control of this company. This is another major negative– who wants to be in a company where just one shareholder has all the say?
Third, this IPO is huge. The company will go straight into some indexes which will mean there will be a lot of buying, especially by passive funds. The IPO will probably be successful at the start. However, there are a lot of shareholders who have bought into SpaceX over the last 20 years. Their shares will be in escrow and can only be sold incrementally over some months. However, when they are fully released, there could be a lot of selling. It may be tempting to think that you could buy in at the start and sell before the others do, but the timing would be tricky.
Finally, consider whether you already own shares in SpaceX. Through our KiwiSavers and other investments, we own companies like Alphabet/Google and Nvidia which already own SpaceX shares. Before you buy into the IPO, consider whether you need more SpaceX.
The negatives trump the positives; price and governance weigh especially heavy. Musk is an exceptionally good businessman. Even so, he is not perfect and I am not particularly keen to help him become the world’s first trillionaire (I think that an especially empty goal).
Musk does not need my paltry amount of money to help make him richer, and with plenty of other tech opportunities to invest in, I am going to sit this one out.
Martin Hawes is not a financial adviser, and the information and opinions here should not be taken as financial advice.