I haven\u2019t seen anything as stupid as the WeWork IPO document<\/a> in a very long time \u2014 that is, until Elon Musk filed to take SpaceX public. WeWork was a joke. SpaceX is a threat. And if Musk and his bankers have their way, you are going to be their bagholder.<\/p>\n<\/div>\n Lots of the top-line details leaked long before the S-1 filing itself became public. There\u2019s the rumored valuation of more than $1 trillion. That\u2019s despite the nearly $5 billion in losses last year<\/a>. The total addressable market (TAM) for SpaceX \u2014 the amount of revenue SpaceX thinks it could make if won over what it thinks is its entire customer base \u2014 was listed as $28.5 trillion. By way of comparison, the gross domestic product of the US as a whole was a hair over $24 trillion<\/a>, according to the St. Louis Fed.<\/p>\n<\/div>\n I guess I could believe that Musk is the Lord and Savior of a bunch of weird polygons<\/p>\n<\/div>\n<\/div>\n This is absurd nonsense, but it might not matter. Musk is the original financial influencer, and his struggling electric car company, Tesla, trades at more than 300 times earnings. Ford and Toyota both trade at about 11 times earnings. Even Nvidia, a company that is arguably printing money, trades at 33 times earnings. Tesla is a meme stock, and SpaceX is poised to be the next one. Never mind that it is basically a space company plus an AI company plus a social network \u2014 a meme stock doesn\u2019t have to make sense.<\/p>\n<\/div>\n So where do I start? I guess we\u2019re all supposed to pretend it\u2019s 2015 and that Musk cares about humanity, and especially about sending humanity to space. Musk is trying to sell a big company with a big story: his messianic mission to \u201cextend the light of consciousness to the stars,\u201d a phrase that occurs seven times in the S-1. (\u201cLight of consciousness\u201d without its astral accompaniment occurs an additional three times.) There is an artist\u2019s illustration of \u201cLife on Mars.\u201d The people who live there appear to be composed of polygons. I guess I could believe that Musk is the Lord and Savior of a bunch of weird polygons; I\u2019ve seen the Cybertruck.<\/p>\n<\/div>\n (WeWork guru Rebekah Neumann must be eating her heart out right now \u2014 \u201cthe power of We\u201d is so quaint by comparison.)<\/p>\n<\/div>\n Musk knows that his strength is the cult of losers who worship him. That\u2019s why 30 percent of the IPO is reserved for retail investors. As for the grown-ups, well, there\u2019s a Keynesian beauty contest in play; if you know that the loser cultists will buy whatever he\u2019s selling, and that Nasdaq rule changes may get it fast-tracked onto the index, it might make sense to buy into the IPO. You\u2019ll be watching Number Go Up regardless of the underlying value, and you\u2019d be an idiot to leave that on the table. And the more people think that way, the more<\/em> Number Go Up. Say it with me now, my Keynesians: The market can stay irrational longer than you can stay solvent.<\/em><\/p>\n<\/div>\n In some ways, this isn\u2019t just SpaceX\u2019s IPO. It\u2019s the IPO of financial nihilism writ large. Robinhood profited<\/em> off financial nihilism<\/a>, but it wasn\u2019t itself a meme stock. SpaceX is different. It\u2019s worse. And I don\u2019t know how normal people can avoid having it stuffed down their throats.<\/p>\n<\/div>\n This company is called SpaceX, and it\u2019s known for building rockets. The filing is peppered with references to the Moon (74), Mars (63) and \u201cand beyond\u201d (13), as in \u201cEarth\u2019s orbit and beyond\u201d or \u201cthe Moon, Mars, and beyond.\u201d But looking at the numbers from its IPO document, this is, by SpaceX\u2019s own admission, an AI company. $26.5 trillion of its $28.5 trillion TAM is AI applications. If that seems awfully optimistic to you, don\u2019t worry: SpaceX excluded the Russian and Chinese markets from its estimates.<\/p>\n<\/div>\n About $13 billion, or roughly two-thirds, of SpaceX\u2019s capital spending in 2025 went to AI buildout. How did that go? Well, the AI arm of SpaceX lost $6 billion in operations and had revenue of just $3.2 billion. Meanwhile, Anthropic is going to be turning an operating profit <\/a>of $559 million in the second quarter of this year. Yeah, you read that right: Profit. <\/em>In the quarter<\/em>.<\/p>\n<\/div>\n Is Grok one of the most advanced frontier models? Well, it\u2019s distilled from them, anyway!<\/p>\n<\/div>\n<\/div>\n Of course, you could figure the vibes on that out just by knowing that SpaceX leased out its massive cloud computing operation to Anthropic for what the S-1 reveals to be $15 billion a year. Incidentally, xAI\u2019s government contracts aren\u2019t going so hot<\/a>, which is possibly a problem for the company\u2019s planned IPO.<\/p>\n<\/div>\n So let\u2019s talk about Grok, which Verge<\/em> readers may also know as MechaHitler<\/a>, \u201ca truth-seeking AI model … which has emerged as one of the world\u2019s most advanced frontier models,\u201d according to the S-1. This is quite a turnaround from Musk saying in March<\/a> that \u201cxAI was not built right first time around, so is being rebuilt from the foundations up.\u201d Is it one of the most advanced frontier models? Well, it\u2019s distilled from them<\/a>, anyway!<\/p>\n<\/div>\n The details on xAI\u2019s recent deal with Cursor make this look even worse. You may recall that in April, SpaceX announced it made a commitment<\/a> to maybe buy the AI coding company, which would give SpaceX a way to compete with enterprise AI products made by Anthropic and OpenAI. Well, if the deal goes through, existing shareholders will be diluted to the tune of $60 billion. If it does not go through, SpaceX pays Cursor $1.5 billion and also lets Cursor use more than $8 billion of compute. This does not suggest a strong negotiating position for SpaceX.<\/p>\n<\/div>\n Greg Brockman and Ilya Sutskever, two OpenAI cofounders, felt in 2018 that Musk \u201creally hasn\u2019t done his homework [on] AI \/ AGI.\u201d<\/p>\n<\/div>\n<\/div>\n The filing notes all the places SpaceX is now under investigation for Grok\u2019s production of nonconsensual sexualized images, including those of children. Three lawsuits are called out specifically in the filing, two of which are attempting to achieve class-action status.<\/p>\n<\/div>\n The timing of this filing is a little bit funny. Just last week, Musk lost his suit against Sam Altman and OpenAI, which accomplished basically nothing except revealing how bad Musk is at AI<\/a>. Greg Brockman and Ilya Sutskever, two OpenAI cofounders, felt in 2018 that Musk \u201creally hasn\u2019t done his homework [on] AI \/ AGI<\/a>.\u201d That appears to still be true today.<\/p>\n<\/div>\n SpaceX said that the AI unit containing X and xAI generated only $818 million in revenue in the first quarter of 2026. By way of comparison, Twitter alone made $1.2 billion<\/a> in the first quarter of 2022, or about 30 percent more, before <\/em>Musk bought it. A remarkable business mind, truly.<\/p>\n<\/div>\n Doubtless you are thinking, well, but what about space<\/em>? There\u2019s plenty of AI bullshit there, and we\u2019ll get to it later, but in this case it all hinges on Starship, which has so far been prone<\/a> to unexpected <\/a>explosions<\/a>. Starship is clutch for launching the heavier versions of Starlink satellites<\/a>, some of which are currently sitting around gathering dust as they wait for their rides into orbit. Some NASA<\/a> (and other) government contracts hinge on it, too.<\/p>\n<\/div>\n When the filing dropped, the Starship prototypes launched had barely carried more<\/a> than the Falcon 9, the lowest-end rocket SpaceX has. You may be thinking that\u2019s the kind of thing that would be disclosed in an IPO filing, but you\u2019d be mistaken. \u201cStarship V3 is designed to deliver 100 metric tons to space in a fully reusable configuration while enabling rapid turnaround times.\u201d I am going to skip \u201cfully reusable\u201d except to point out that it will limit capacity<\/a> if it is even achievable.<\/p>\n<\/div>\n Instead of disclosure about what SpaceX had actually achieved to date with Starship, the language we see is this: \u201cWe expect to commence deploying our next-generation V3 satellites, designed to offer one Tbps of downlink capacity per satellite, using Starship in the second half of 2026. We expect that a single Starship launch will be capable of deploying up to 60 V3 satellites.\u201d<\/p>\n<\/div>\n Okay, so the V3 did launch two days after the filing, on May 22nd, with a sort-of successful mission<\/a>. I say \u201csort-of successful\u201d in that it did not blow up on launch and did manage to reach space. The problem was, Starship couldn\u2019t keep all its candles lit \u2014 one of its engines failed. Its booster also exploded on return, but I am less concerned about this. Just getting the satellites in space is the main problem. This test flight deployed 20 dummy satellites. I don\u2019t know how many metric tons that is, and it seems SpaceX didn\u2019t say, but it\u2019s still shy of the goal of 60 satellites. Again, this is the sort of thing it feels like you should tell investors about? You know, how your key rocket<\/em> that is required for all your big plans is actually working<\/em>?<\/p>\n<\/div>\n Speaking of investors, there is an irritating detail I noticed in the S-1. Assume the timeline in the S-1 is correct \u2014 we have no reason to assume this, by the way; SpaceX\u2019s delays are legendary \u2014 and let\u2019s do some math. The V3 satellites Musk is talking about weigh 2,000kg, according to an FCC filing<\/a>. Sixty of them add up to 120,000kg, or 120 metric tons. If Starship works as advertised, delivering 100 metric tons, that is still not enough for all 60 V3 satellites<\/em>.<\/p>\n<\/div>\n \u201cIt\u2019s Musk math,\u201d says Chris Quilty, the cofounder and co-CEO of Quilty Space, an analytics firm. He notes that the V3 satellites may not weigh exactly 2,000kg, and that if SpaceX stacks them so there\u2019s no wasted volume, 60 satellites may be possible. Sure, maybe. Hard to know without details in the filing, though. If everything hinges on this ship, I expect more fucking details on the ship, you know?<\/p>\n<\/div>\n There is also some outright fantasy in this section: the vision of Starship as a point-to-point transportation system<\/p>\n<\/div>\n<\/div>\n Revenue from the launch business decreased by more than a quarter in the first three months of this year, primarily because there were fewer customer launches. One possible theory of SpaceX was that if someone made rocketry much cheaper, many more people would want to shoot shit into space. The paperwork suggests that SpaceX\u2019s biggest customer, when it comes to rockets, is SpaceX.<\/p>\n<\/div>\n There is also some outright fantasy in this section: the vision of Starship as a point-to-point transportation system as imagined by Elon Musk in 2017<\/a>. In-space manufacturing. Space tourism. Asteroid mining. Sure. Whatever. Starship was supposed to have its first crewed flight two years ago<\/a>. Obviously, that hasn\u2019t happened. But people like fantasy I guess, so it\u2019s there in the S-1.<\/p>\n<\/div>\n Starlink has also been a cost center, though it hasn\u2019t been as bad as AI. In 2025, the company spent $3 billion; for the first quarter of 2026, $930 million. The rocket is the lynchpin of SpaceX\u2019s moneymaking plans, so it sort of has<\/em> to work.<\/p>\n<\/div>\n There is one viable business in this IPO. It is Starlink, the satellite internet provider, which brought in more than $11 billion in revenue last year. \u201cThe reality is that Starlink is the cashflow machine that will fund the xAI and SpaceX Starship business,\u201d says Quilty.<\/p>\n<\/div>\n Starlink is an actual good business, even if the revenue reported in the S-1 is less than both Morgan Stanley\u2019s projections and what SpaceX told potential investors earlier this year<\/a>. That may be because it was heavily discounted, and consequently, the revenue per subscriber declined by about 25 percent. I don\u2019t know, and the filing doesn\u2019t say, what that will mean for retaining those subscribers.<\/p>\n<\/div>\n SpaceX has stapled its unsuccessful AI dreams to the successful business<\/p>\n<\/div>\n<\/div>\n But Starlink emerged at the right time \u2014 as TV was losing dominance, meaning less revenue for the geostationary satellite TV providers. Though it started with consumers, it\u2019s proven itself to enterprise customers as well, Quilty notes. Starlink has a significant lead on all its competitors. Maybe SpaceX is juicing its numbers for an IPO, but that hardly seems necessary. And while some critics note that there\u2019s no cost of deorbiting<\/a> written into the S-1, Quilty tells me that at the low orbit at which the Starlink satellites are now being sent \u2014 they\u2019re moving down to 380km above Earth \u2014 those objects are functionally self-cleaning. That\u2019s because the closer an object is to Earth, the less time it takes to decay; above 700km, it may take years, but at 300km it\u2019s weeks to months, he says.<\/p>\n<\/div>\n SpaceX has stapled its unsuccessful AI dreams to the successful business using Starlink as a guide. The idea is: data centers in space, with Starlink beaming the data back down. The pitch is that it\u2019s easier to get solar energy in space, so that will solve AI\u2019s energy bottleneck. (Presumably also the environment will help with cooling, which is often done, controversially, with water. I suppose you could radiate heat to space like the James Webb Space Telescope does<\/a>?) \u201cOur goal over time is to launch 100 gigawatts of compute to space each year,\u201d the filing reads.<\/p>\n<\/div>\n In case you are wondering, some variation of the phrase \u201cThe Sun contains approximately 99.8% of the solar system\u2019s energy\u201d occurs four times in this document. I want you to look at how stupid that is. You could say \u201calmost all\u201d or \u201cmore than 99 percent\u201d and get the job done, but it wouldn\u2019t make you sound like a real nerd. No, you need to really drive home that the decimal place is still<\/em> just not quite accurate enough for your engineering needs.<\/p>\n<\/div>\n Musk has figured out that if you make a bunch of sci-fi bullshit promises, people can\u2019t really examine them carefully for plausibility<\/p>\n<\/div>\n<\/div>\n This kind of speaks to what makes my hackles go up. A very cynical way of reading this filing is that Musk has figured out that if you make a bunch of sci-fi bullshit promises, people can\u2019t really examine them carefully for plausibility the way they might for, I don\u2019t know, regular data centers on Earth.<\/p>\n<\/div>\n So let\u2019s talk about those.<\/p>\n<\/div>\n Musk, who claims to want to save humanity by spreading us out among the stars and whose car company is premised on renewable energy, bought another $2.8 billion of polluting gas turbines<\/a> to power SpaceX\u2019s data centers, and tried to bury that particular statistic in a footnote. SpaceX is already being sued for its use of turbines<\/a>. It\u2019s been granted permits for 15; it\u2019s using 46. Those turbines even show up in the risk factor section because if an injunction is granted or the permits are revoked, the existing bad AI business will suffer. Exciting stuff!<\/p>\n<\/div>\n Quilty, the space analyst, is more upbeat about data centers in space than I am, viewing them as a mid- to long-term opportunity for the company that hinges on Starship\u2019s success. Musk is not the only person hyping them; Jeff Bezos is excited about them, too<\/a>, and there are several smaller companies making their own attempts. There are good reasons to be skeptical, which are, in brief: launch and repair costs<\/a>, the difficulty of replacing air and water radiation cooling<\/a>, the potential dangers of space debris and solar flares, slower data transfer, and the fact that Earth-based facilities will always be more cutting-edge. To me, the excitement about space-based data centers suggests typical Silicon Valley groupthink that gave Musk a chance to execute a hail-mary pass.<\/p>\n<\/div>\n By stapling several failing businesses onto SpaceX, Musk is attempting to become too big to fail. If his road show is successful, the fast-tracking rules change that Nasdaq just pushed through<\/a> means that SpaceX will join the Nasdaq 100 in just 15 days \u2014 putting it in the index funds favored by many passive investors. One index fund analyst suggests the effect will be that the funds will buy \u201d$7-ish billion\u201d of SpaceX<\/a> on just one day.<\/em><\/p>\n<\/div>\n Artists\u2019 renderings of Mars are just window dressing. This IPO will make Musk the world\u2019s first trillionaire. He\u2019ll control 85 percent of SpaceX\u2019s voting rights, by the way. (The distrust that Sam Altman and Greg Brockman felt<\/a> about Musk ever loosening his grip on OpenAI seems pretty justified, doesn\u2019t it? Getting me to sympathize with Altman<\/a> isn\u2019t the most loathsome thing Musk has done \u2014 that would be the hundreds of thousands of deaths<\/a> he caused \u2014 but I may resent it the most.) Assorted Wall Street types are currently jerking off imagining what they are going to do with all that sweet, sweet money. Goldman\u2019s David Solomon didn\u2019t do that DM slide for nothing<\/a>! How do you think he got \u201clead left<\/a>\u201d on the prospectus?<\/p>\n<\/div>\n Let\u2019s talk about what is<\/em> real: $30 billion of debt<\/p>\n<\/div>\n<\/div>\n Anyway, we know the Mars thing isn\u2019t serious because there is nothing in SpaceX\u2019s risk factors about how the company has done no work whatsoever on the biological issues facing people who might attempt to live \u2014 or even just work \u2014 in space<\/a>. The hope is that people will simply get so excited about the promised sci-fi future that they\u2019ll just ignore the rest of it.<\/p>\n<\/div>\n So let\u2019s talk about what is<\/em> real: the debt, which, according to SpaceX\u2019s risk factors, is almost $30 billion.<\/p>\n<\/div>\n Before its IPO, SpaceX refinanced some of its debt<\/a> with a $20 billion bridge loan that comes due in September 2027, with the possibility of extension. To do that, SpaceX took a $1 billion prepayment penalty on one of its loans. (Curiously<\/a>, SpaceX also spent about $4 billion repurchasing stock in the first quarter of this year.) According to the contract\u2019s terms, as disclosed in the S-1 filing, SpaceX must use the first $20 billion it raises from the IPO to repay this debt.<\/p>\n<\/div>\n Also, interestingly, SpaceX went into a technical default on a $1.5 billion credit facility by acquiring xAI, because of the amount of debt xAI brought with it. Yet another reason to view that acquisition askance!<\/p>\n<\/div>\n Because Musk has 80 percent of the SpaceX voting rights, shareholders effectively have none<\/p>\n<\/div>\n<\/div>\n The other thing to point out about the debt is the related party: Antonio Gracias, who sits on the board of SpaceX and Tesla. His company, Valor Equity Partners, has three lease deals with SpaceX subsidiaries, worth a combined $20 billion, that are guaranteed by SpaceX. I would not be making a huge deal out of this except that they are noted as a \u201cfailed sale leaseback\u201d \u2014 which means a loan with GPU collateral. It\u2019s funky enough that Fortune<\/em> says<\/a> \u201cSpaceX and xAI structured the deals in a way that, if accepted, would have kept the financing off SpaceX\u2019s balance sheet.\u201d It seems SpaceX\u2019s auditors refused this. So that\u2019s $9 billion in debt.<\/p>\n<\/div>\n \u201cThat\u2019s to me, that\u2019s the worst,\u201d said Nell Minow, a chair of ValueEdge Advisors, to Fortune<\/em>, when asked how the arrangement stacks up against all the related-party deals she\u2019s seen in the last 40 years.<\/p>\n<\/div>\n Then there\u2019s the governance issues. Specifically: Elon Musk. If shareholders don\u2019t like the direction of a company, they have about three major rights: They can vote, they can sell their stock, and they can sue. \u201cWe\u2019re now in a period where all those rights are diminishing,\u201d says Ann Lipton, a professor at the University of Colorado\u2019s law school.<\/p>\n<\/div>\n Because Musk has 80 percent of the SpaceX voting rights, shareholders effectively have none. The litigation rights have been curtailed, and there\u2019s an arbitration clause that suggests \u201cthere\u2019s a real chance he\u2019s barred anyone from suing for securities fraud,\u201d Lipton says. The SEC under Donald Trump is effectively toothless \u2014 there\u2019s already an attempt at settling a suit over Musk\u2019s failure<\/a> to properly disclose his Twitter ownership before his buyout offer \u2014 so there\u2019s no real risk from them. And the index fund inclusion makes it more difficult for people to actually get rid of SpaceX shares \u2014 there\u2019s much more forced buying.<\/p>\n<\/div>\n \u201cThere\u2019s no getting off the train.\u201d<\/p>\n<\/div>\n<\/div>\n \u201cThere\u2019s no getting off the train,\u201d Lipton says.<\/p>\n<\/div>\n Which brings me back to WeWork. One major difference between Adam Neumann and Elon Musk \u2014 besides the scale of their grandiosity \u2014 is that Musk has a proven ability to rally stocks. Another is all those leaks from the S-1 that came through before the actual document dropped to create buzz and hype. It\u2019s a violation of securities laws to leak the S-1 before the filing, Lipton says. And while it\u2019s not impossible that they are coming from somewhere other than SpaceX, based on what she\u2019s observed publicly, she thinks that SpaceX is the likeliest leaker. \u201cThat\u2019s exactly what they\u2019re not supposed to do, but it\u2019s what I believe they\u2019re doing, and the SEC hasn\u2019t shown the slightest interest,\u201d she says. \u201cYou\u2019d think they\u2019d at least look into it.\u201d<\/p>\n<\/div>\n The top-line data without the details on debt and related party transactions make SpaceX look better than it is. Now, more than ever, our society is built around gambling, and it seems a lot of people are feeling lucky. And that means that you, my friend, may wind up helping make Elon Musk a trillionaire whether you like it or not. An early index listing gives SpaceX more access to institutional investors through their index funds. Those index funds will have to buy SpaceX shares, and that means actively managed funds will probably buy SpaceX shares, too, to benefit from the trade \u2014 since passive funds like index funds now outnumber active funds in assets<\/a>. (The passive tail is wagging the active dog, if you will.) The likelihood the shares wind up in many people\u2019s retirement accounts means that if SpaceX fails, the people who get hit are not the wised-up early investors but basically a bunch of normal people, the ones who can least afford it.<\/p>\n<\/div>\n And that, along with Musk\u2019s coziness with the Trump administration, suggests that Musk has positioned himself for a government bailout if SpaceX fails. Now, if that\u2019s not spreading the light of consciousness, I don\u2019t know what is. The largest IPO of all time, after all, also means that we will possibly see the biggest flop of all time. And if I know Musk, he\u2019ll do everything he can to make sure someone else is on the hook for that.<\/p>\n<\/div>\nThe business and fantasy of space<\/strong><\/h2>\n<\/p>\n<\/div>\n
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