But not all investors are on board
When a company goes public at a valuation of $1.75 trillion and raises $75 billion in a single day, it is tempting to declare a new era in capital markets. The hyperbole around SpaceX’s IPO has indeed been considerable. As trading begins today at $135 per share, SpaceX launches the largest public offering in history, with indications that the stock is already trading c.30% higher in pre-market activity. Elon Musk, meanwhile, is set to become the world’s first trillionaire on paper, underscoring the scale of both the company and its founder’s ambitions. Beyond the company’s scale and capabilities, however, the listing is symptomatic of a structural change in markets. This is not simply a landmark IPO; it reflects how capital markets have evolved, and where value is now being created.
At first glance, SpaceX enters public markets as one of the world’s largest companies. In reality, the investable opportunity is far smaller. The ‘free float’, or the portion of the company made available to investors, is only around 4-5%, meaning the effective market exposure is a fraction of the headline valuation. Because indices are weighted on a float-adjusted basis, SpaceX’s initial influence on passive portfolios will be relatively modest. A trillion‑dollar company with limited float behaves more like a mid‑cap stock, at least at the outset.
Saudi Aramco faced the same dynamic after its bumper IPO in 2019; despite being the world’s most profitable company, its index weight was negligible for months. Lock-up provisions and staggered releases will gradually increase tradeable supply, with full liquidity only emerging after roughly six months. The market effect will unfold in phases, becoming more meaningful as the free float expands.
This also introduces a further layer of complexity: index outcomes will diverge meaningfully. Different providers will include SpaceX at different times and weights, meaning ostensibly “passive” portfolios may exhibit materially different exposures depending on the benchmark used. In practice, this creates an additional friction – investors may struggle to access sufficient shares to match index weights in the early stages, as limited supply meets strong demand.
Mega-IPOs of this scale can reshape indices by altering sector weights, reinforcing US market dominance and driving passive capital flows. This process is gradual, but it is likely to play out differently this time. The experience with Tesla provides a useful reference point. Musk’s electric car business went public in 2010 and was, by most measures, S&P 500-eligible for years, but the profitability rule kept it out until December 2020. While S&P 500 trackers sat on the sidelines, Tesla rose roughly 700% in 2020 alone. Passive investors missed the entire run, before being forced to buy in at scale, with an estimated $78 billion of stock purchased in a compressed window.
Musk lobbied hard to avoid a repeat with SpaceX, but S&P Dow Jones Indices ultimately declined to adjust its rules. SpaceX’s net loss of almost $5 billion in 2025 means it is unlikely to clear the profitability threshold before mid-2027. The Nasdaq-100 has taken a different approach. From May 2026, any newly listed company ranking in the top 40 by market capitalisation can enter after 15 trading days, with no minimum float requirement. SpaceX will almost certainly qualify, meaning Nasdaq-100 trackers are likely to gain exposure quickly.
Irrespective of index inclusion, SpaceX comes to market at scale, with established operations and approximately $18.7 billion in revenue. The valuation, at roughly 90x revenue, is far more reflective of expectations of future growth. This highlights a broader shift: companies are staying private for longer, capturing a larger share of their growth before listing. The median age of a company at IPO was 13.5 years in 2024, compared with 5–9 years historically, and public market investors are increasingly arriving later in the value creation cycle.
This changes the nature of investing. Rather than accessing early-stage growth, investors are buying into mature platforms with long-term optionality. In SpaceX’s case, that means combining established launch and connectivity businesses with more uncertain, capital-intensive ambitions. As Starlink expands beyond its rural base into more competitive markets, sustaining growth and pricing power will be a key test. The IPO is therefore less a starting point than a transition into a new phase of development.
For our clients, the most direct relevance lies in existing exposure through Scottish Mortgage Investment Trust. The trust invested in SpaceX between 2018 and 2021, committing around £151 million. Following the latest revaluation in line with the IPO price, the holding is now worth around £3 billion (approximately $4 billion) and represents around 21.0% of total assets. This equates to a return of nearly 20 times the original investment and makes SpaceX the largest contributor to performance over one, three, and five-year periods. It is a clear illustration of the value of accessing transformational businesses before they reach public markets.
Gaining exposure to the most dynamic sources of growth increasingly requires skin in the game before companies reach public markets. Callanish is positioned accordingly, combining public market expertise with access to high-quality private investments, enabling clients to capture growth throughout the company lifecycle. Index inclusion may be rules-based, but the timing and weighting of exposure increasingly embed active decisions.
The path to “infinity and beyond” is no longer paved in public markets – it starts much earlier.
Please be aware that the value of investments may go up or down and you may receive back less than you invested originally. Past performance is not a guide to the future.
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