The SpaceX IPO: Your Money, Musk's Kingdom
On Friday, it could become the largest IPO ever, and Elon Musk gets 85.1% of the voting power in the world's first sovereign company. Now we find out what it will truly cost.
A.I. Disclosure: I use LLM technology to help with research, fact-checking, document summaries, editing, and rewrites. I’m trying to use it responsibly, but I’m learning as I go. You can read my full ethics disclosure here.
On September 28, 2008, on Omelek Island in the Marshall Islands, the engine of a Falcon 1 rocket sat under the nervous gaze of hundreds of SpaceX engineers and, by extension, thousands of its investors. The first three attempts to ignite and launch the thing had failed — once when a fuel leak caused a fire at launch, once when a control system failed, once when an unexpected thrust surge backed the rocket violently into its own second stage. Rocket launches are the very definition of difficult, not to mention costly: the company had only enough money left for this attempt. Employees watched a live feed from the other side of the world, some of them crying during the countdown. And then…it lit. The Falcon 1 lifted off. And it burned cleanly for nine and a half minutes. For the first time in history, a private company’s liquid-fueled rocket left the grip of gravity and reached orbit.
The rockets did exactly what the company promised, delivering NASA’s payloads to orbit cheaply and reliably. (And even, to my utter amazement, returning to Earth upright for reuse.) But the real money came from another payload they carried. By the end of 2025, Starlink (SpaceX’s satellite internet constellation, delivered into orbit in stages until they ringed Earth) had grown to more than 9 million subscribers globally, generating the majority of SpaceX’s estimated $15.6 billion in annual revenue on a recurring, subscription-based model. The kind of economics that turn an impossibly expensive rocket company into a cash machine. A machine that in 2024 quietly turned a $791 million profit.
Then Musk looked at that machine and decided to use it to fund a war for AI dominance, one he was clearly losing.
In February 2026, SpaceX acquired xAI — Musk’s artificial intelligence company, maker of the Grok chatbot — in an all-stock deal. The acquisition brought xAI’s losses onto SpaceX’s consolidated books. Building, maintaining, and launching rockets is expensive. But in 2025 alone, xAI spent $12.7 billion in capital expenditures — more than the combined $8 billion SpaceX spent on its entire Starlink and rocket launch business. SpaceX posted a net loss of $4.94 billion for the year, a swing of more than $5 billion from the year before. The profitable company became the wallet for the unprofitable one. That’s what this week’s SpaceX IPO is asking the market to fund.
Before we get to whether this is a good bet, we need to be clear about what Musk is actually asking of you, his investors.
He wants your money. He does not want your opinion.
SpaceX is listing under a dual-class share structure. “Dual-class” means two tiers of stock. One class for outside investors, with standard voting rights. One class for Musk and insiders, with dramatically amplified voting power. According to SpaceX’s own S-1 filing, as reported by Reuters, Musk’s Class B super-voting shares give him 85.1% of the voting power of the entire company. You can buy a piece of SpaceX on Friday. You cannot tell SpaceX what to do. Ever.
Musk didn't invent this arrangement. When the New York Times and the Washington Post went public in 1967 and 1971 respectively, the Sulzberger and Graham families kept voting control through dual-class share structures, explicitly to protect editorial independence from market pressure. The argument was: trust us with your money, we'll protect the journalistic mission. But that was a narrow carve-out in a market that had largely rejected the practice since a Dodge Brothers stock scandal in 1926. What tech companies did was rehabilitate dual-class shares as a general business model, and the markets rewarded them for it. Google was the first tech giant to adopt the structure when it went public in 2004. Then Meta used one. Snap went all the way and offered public shareholders zero voting rights whatsoever. Investors piled aboard anyway. The stock prices went up. The model spread.
What sets SpaceX apart is its scale…and geopolitical impact. Google, Meta, and Snap trade in your data and attention. SpaceX’s customers include NASA, the U.S. Department of Defense, commercial satellite operators, and an increasing number of foreign governments. When Russia invaded Ukraine in 2022, Starlink became the communications backbone of a nation at war in ways no government had planned for and no competitor could replace. Musk held — and on at least one documented occasion, withheld — connectivity that determined the course of military operations. No shareholder vote required. No board approval sought.
Institutional Shareholder Services once described Facebook’s governance structure as having “a defense against everything except hubris.” Fidelity’s then-general counsel said companies adopting dual-class structures are “less likely to have alignment and less likely to have the accountability.” Those lines were written about companies that sell ads alongside your information diet. SpaceX sells rockets to the US government and internet access to armies.
Now, let’s be clear: The pre-2004 era of American corporate governance was not a golden age of socially responsible capitalism.
In 1998, the Rockefeller family led a shareholder revolt against ExxonMobil over its climate change policies. Sure, the Rockefellers were heirs to a fortune built on oil, but still, it was investor activism, and from truly powerful investors.
They lost.
In 2019, ExxonMobil shareholders rejected a proposal to create a special board committee on climate change. Voting rights, held by investors who had them, did not reliably produce good outcomes for the planet, for workers, or for the communities that bore the costs of corporate decisions.
But what pre-2004 governance did punish was bad management. In 1992, GM’s outside board members removed CEO Robert Stempel — the first GM chief to lose his job since the company’s founder was ousted in 1921 — after the company lost more than $4 billion in a single year. In 2004, a 43% no-confidence vote by Disney shareholders, coordinated by Institutional Shareholder Services, Glass Lewis, and CalPERS, stripped Michael Eisner of his chairmanship and ultimately ended his tenure. Both outcomes were possible because there was a structural mechanism that made them possible. A board with real power. Investors with real votes. Accountability that a CEO could not insulate himself from by design.
The dual-class era removed that form of governance, and called it a feature. I am not mourning the loss of a system that served us well. I am noting the removal of the last responsive brake pedal — just as a company that touches nearly every corner of our lives is asking the public markets to invest the kind of capital that, in any prior era, would have come with at least some form of structural check.
Let’s make the case for Musk’s offering, because it’s real and it deserves a fair hearing.
The guy has pulled it off before. Starlink looked financially deranged until it generated $15 billion in recurring revenue. Musk has a pattern, maybe even a strategy — build infrastructure at catastrophic cost, then wait for the world to need it. And xAI’s financials, as alarming as they look, contain at least one data point you should consider: in May 2026, Anthropic — one of xAI’s chief competitors in the frontier AI race — agreed to pay xAI $1.25 billion per month to access compute through its Colossus data center. A competitor paying nine figures every 30 days for your infrastructure is an important sign you’ve created something the world wants. Maybe even something the world needs.
If the bull case is right, xAI becomes what Starlink became: infrastructure so embedded in critical systems that governments and industries cannot function without it. The compute backbone for the AI industry. A space-based cloud that governments route their most sensitive communications through.
(I’m trying to put aside my broader democratic concerns, but let me describe them for a moment: A single private actor — unelected, unaccountable to shareholders, answerable to no board with meaningful authority — will have built and will control the infrastructure that militaries, governments, rival AI companies, and billions of ordinary users depend on. Ukraine showed us what it looks like when a nation discovers mid-war that it has handed that kind of dependency to one man. So I do not find the bull case for SpaceX reassuring. If anything, I find it more alarming. Anyway, back to the investors.)
Here’s what the S-1 says about Musk’s incentives. In January 2026, SpaceX’s board approved a compensation package that will award Musk 200 million super-voting restricted shares if the company hits a market value of $7.5 trillion and establishes a permanent human colony on Mars with at least 1 million people. A separate tranche awards 60.4 million additional shares for operating space-based data centers providing at least 100 terawatts of capacity. Executive compensation expert Eric Hoffmann of Farient Advisors told Reuters he knew of nothing remotely comparable at any other company. (He also noted something that should give every SpaceX investor pause: SpaceX and Tesla — both controlled by Musk — are now effectively competing against each other for his attention.)
As an investor, you’re not just betting that the infrastructure play works. You are betting that a man whose personal compensation is tied to colonizing Mars will somehow prioritize your returns along the way.
Two institutions have rendered quiet verdicts on this offering in recent weeks.
Denmark’s AkademikerPension has blacklisted SpaceX entirely, citing what it called the company’s “catastrophic governance structure.” The S&P 500 index committee — which had considered whether to waive its profitability, seasoning, and float requirements for very huge (“megacap”) companies ahead of this listing — declined to do so last week, meaning the world’s largest passive funds will not be forced to buy this stock.
Neither institution is concerned that the rockets don’t work. Neither worries the infrastructure bet can’t pay off. What they said, in the institutional language available to them, is that this company, at this valuation, run by one man accountable to no one, is not yet a company the world's most careful money should touch.
A few weeks ago, I sat in a federal courtroom in Oakland and watched Elon Musk testify.
He wasn’t there to defend a business decision. He was there because he had sued the people who, in his view, had stolen the founding narrative of the AI industry from him — the argument that he, not Sam Altman, not the other OpenAI founders, was supposed to be the person who built the future. The trial exposed, in real time, a man for whom the question of historical credit had become consuming. Not in the way that ambitious people are ambitious. (And these people, who literally consider their companies to be the most important thing in the world, redefine ambition.) In the way that people are when they feel something has been taken from them that they cannot get back.
xAI posted an operating loss of $2.47 billion on $818 million in revenue in the first quarter of 2026 alone. That could be the financial profile of a company following a very scary but very audacious plan. That could also be the financial profile of someone utterly and irrationally determined to not be second.
The investors who show up on Friday aren’t buying a share of SpaceX. They’re buying a bet on whether the man whose people wept watching that fourth rocket light is still the one making decisions.
And once his company goes public, whoever Musk is now will have more resources — and less accountability — than ever before.
Further Reading
SpaceX S-1 filing, SEC EDGAR — the primary source document for the IPO’s governance structure, compensation terms, and voting rights disclosures
Congressional Research Service: Dual-Class Stock: Background and Policy Debate — the nonpartisan congressional primer on dual-class share history, policy debate, and the long record of companies — from Ford to Coca-Cola to media empires — that have used the structure to insulate founders from accountability
Fortune: Without WaPo, Graham Holdings Should Cede Control to Shareholders — on how the Washington Post, the New York Times, and Dow Jones all went public with dual-class share structures to protect family editorial control, and why critics said the rationale collapsed once the journalism mission was sold off; the Graham and Sulzberger families as the template SpaceX is now extending to rockets and satellites
Fortune/CNN Money: Robert Stempel — The Star-Crossed Career of a Fallen GM CEO — on the 1992 boardroom coup that removed General Motors’ CEO after the company lost more than $4 billion in a single year; the first GM chief to lose his job since the company’s founder was ousted in 1921, and the clearest pre-dual-class example of investor accountability functioning as designed
ABC News: Disney’s Eisner Rebuked in Shareholder Vote — contemporaneous March 3, 2004 coverage of the annual meeting at which 43% of Disney shareholders withheld votes from CEO Michael Eisner, forcing the board to strip him of the chairmanship the same day; the no-confidence vote was later revised upward to 45.3% by AP
New York Review of Books: The Rockefeller Family Fund vs. ExxonMobil — written by the Rockefeller family members who led the decades-long shareholder campaign against ExxonMobil’s climate denial; documents why full voting rights still failed to force social accountability, making the case that the old governance model’s brake worked for financial misconduct but not environmental harm
Reuters: SpaceX could value company at record-setting $1.75 trillion — on the IPO valuation and Musk’s 85.1% voting control, sourced directly to the S-1 filing
Reuters: SpaceX ties Musk compensation to Mars colonization goal — on the compensation package that awards Musk super-voting shares contingent on reaching a $7.5 trillion valuation and establishing a Mars colony
Reuters: Musk ordered Starlink shutdown during Ukraine’s 2022 Kherson counteroffensive — on how Musk personally ordered coverage cut during a Ukrainian military operation, disabling drones and disrupting artillery; SpaceX disputed the reporting
Harvard Law School Forum: Dual-Class Shares: Governance Risks and Company Performance — on the academic research showing firm value tends to decline over time under dual-class structures, and the alignment gap between founder voting power and financial risk
Morningstar: “Financials Look Reckless” — Lifting xAI’s Hood in the SpaceX IPO — on xAI’s burn rate and what the combined entity’s financials actually show
Interesting NY’er piece. Is Elon Musk’s SpaceX Really Worth $1.75 Trillion?https://www.newyorker.com/news/the-financial-page/is-elon-musks-spacex-really-worth-1-75-trillion