SpaceX IPO Fever: Retail Investors Bet Big on Musk Despite Risks

Anna Watts, a 33-year-old public relations manager in New York, has set aside $6,500 to buy SpaceX shares when they debut on Friday. She wanted to invest more. She asked her best friend for a $5,000 loan. She applied for a bank loan. Both said no. She is buying anyway, and she is not alone.

Watts became a Musk believer years ago when she bought Tesla stock two years after its 2010 public offering and watched it climb as the company reshaped the car industry and made its founder the world's richest person. Now, like thousands of others, she is waiting for SpaceX to go public—a company that promises to merge artificial intelligence, satellite communications, and the distant possibility of Mars colonization into a single investment thesis. "The more the better," she said. "You can't invest too much in one of the most ambitious companies that has ever existed."

SpaceX is preparing to raise roughly $75 billion this week in what could become the largest initial public offering in history. The demand is staggering. Orders for shares exceed the available supply by more than four times. Part of this frenzy is by design. Musk has spent years cultivating a devoted following at Tesla, treating his most committed fans as insiders and giving the company's stock an almost mythical quality. Now he is attempting the same strategy at SpaceX by reserving 30 percent of shares for retail investors—triple the typical allocation in IPOs, which usually favor hedge funds and other large institutional players. The result is a stampede.

Bryan Mitchell, a 48-year-old marketing executive in Indianapolis, plans to invest several thousand dollars in the IPO. He has already poured tens of thousands into Baron Partners Fund, which holds a stake in SpaceX. "This feels like an appetizer," he said. "You have to believe in Elon. I'm willing to overpay just to say I'm part of this." Danny Araújo Mota, 26, who works in educational technology in Austin, bought his first Tesla shares in 2020 because it was the only way to participate in Musk's vision. He has reserved $25,000 for SpaceX. He is not worried if his order does not fill immediately—a delay that could cost him the quick gains that often follow a successful IPO—because he sees this as a long-term bet. "Every once in a while, there are stocks where the founder's or CEO's conviction is too big not to support," he said. Sean McConnell, 47, lives in Orlando, just 40 miles from Florida's Space Coast. He can watch SpaceX launches from his backyard. He works in commercial real estate and plans to invest tens of thousands in SpaceX shares, betting the investment will pay off for him and his two teenage sons within a few years.

But the numbers tell a different story. SpaceX's $1.8 trillion valuation rests heavily on speculative ventures—Mars colonization, space-based data centers, artificial intelligence ambitions so expensive that the company's xAI division alone burns through $1 billion a month. The company's annual revenue of $19 billion is comparable to struggling retailers like Dollar Tree and AutoZone. SpaceX does have real advantages: a dominant position in commercial rocket launches, government contracts, and Starlink, its satellite internet service. Yet the gap between current earnings and the price investors are willing to pay is enormous.

Musk's track record at Tesla offers little reassurance. The company did popularize electric vehicles, but revenue growth has stalled. The robotaxi rollout disappointed. The autonomous driving software is available on fewer models than many expected. The Optimus humanoid robots remain years away from homes. Tesla stock trades at more than 180 times expected earnings, making it one of the most expensive stocks in the S&P 500. Still, investors who held on have been rewarded handsomely, and that history is what fuels the SpaceX fever.

Dec Mullarkey, chief investment officer of SLC Management, has spoken with potential investors across the industry. "Everyone I've talked to who could invest has told me their main reason is Musk's magic touch," he said. "The payoff could take a long time." Craig Stephens, founder of Access IPOs, a podcast for retail investors, says the small investors are generating "extraordinary demand" that could set SpaceX apart from other IPOs where buyers chased quick price spikes. He himself has requested several hundred shares. The enthusiasm is real, the conviction is genuine, and the risk is substantial. SpaceX's IPO will test whether Musk's ability to inspire loyalty can overcome the mathematics of valuation—and whether investors willing to overpay for belief can sustain that faith when the bills come due.