SpaceX's IPO Bagship carries full payload of Elon's mistakes
Always dark<br>DM Sans<br>Lora<br>Underline
Subscribe
Home<br>About<br>Books<br>Patents<br>Work With Me<br>Subscribe
Behold the gleaming, silver phallus aimed squarely at the bruised velvet of the cosmos. It’s deeply romantic, isn't it? The glittering promise of a Martian utopia. The dream of a ubiquitous, invisible web of internet raining down like digital manna to the most remote corners of the globe. Now, swallow hard, wipe the stardust from your eyes, and look down at the form S-1 because SpaceX has officially filed to go public.<br>SpaceX is a cosmic dandelion seed engineered to carry humanity’s future across the vastness of space. But beneath the breathless, soaring poetry of human expansion, the filing reveals the company's true, grinding primary mission of bailing out the smoldering, cash-incinerating disasters of X (formerly Twitter) and xAI.<br>By surgically grafting these ventures into its corporate belly, SpaceX is politely asking the public market to foot the bill for a staggering $20 billion debt bailout, multi-billion-dollar operating losses, and a few ridiculously lucrative exits for private insiders.<br>From whence the greater fool<br>The machinery of capitalism requires blood, and in this case, the blood takes the form of a $20 billion bridge loan executed in March 2026, two months before the IPO filing.<br>It’s a bridge built out of public money and designed to carry the bloated carcass of X and xAI out of the private markets. According to the S-1, the proceeds were immediately used to extinguish the toxic, high-interest debt dragging down those acquisitions, including 12.5% senior secured notes and expensive floating-rate term loans.<br>To put this old debt out of its misery, SpaceX swallowed a brutal $1.5B in debt extinguishment losses in the first quarter of 2026. And the best part? SpaceX will use the IPO proceeds to repay this exact $20 billion bridge loan.<br>While the public is asked to buy the debt, insiders are already putting on their parachutes. The S-1 outlines a series of pre-IPO shenanigans heavily favoring existing royalty:<br>In the first quarter of 2026, SpaceX spent $2.41 billion repurchasing stock from xAI employees.<br>In that same quarter, they spent another $1.93 billion cashing out existing shareholders at fair market value.<br>SpaceX is currently carrying $7.92 billion in toxic, long-term related-party debt disguised as a failed sale-leaseback arrangement with board member Antonio J. Gracias’s firm, Valor Equity Partners.<br>Tesla pushed a $2 billion investment into xAI in January 2026, which miraculously transformed into 19 million split-adjusted shares of SpaceX Class A stock right before the IPO curtain goes up.<br>Then there is the newly formed "AI segment." Born from the February 2026 merger of xAI and X into SpaceX, the new AI division bled out $6.35 billion in 2025 operating losses in 2025, and another $2.46B in just the first three months of 2026.<br>X’s advertising revenue shriveled from $2.32 billion in 2023 down to a hollow $1.84 billion in 2025.<br>To keep the artificial intelligence hallucination alive, SpaceX poured $12.7 billion into AI capital expenditures in 2025.<br>They stuffed another $7.7 billion into the old bird in just the first quarter of 2026.<br>As if the existing bags weren't heavy enough to crack the planet's crust, you might recall SpaceX just entered into an option agreement to acquire AI coding company Cursor at an implied valuation of $60 billion.<br>If the newly public SpaceX decides to wake up and walk away from this objectively terrible acquisition, it is still on the hook for a $1.5 billion termination fee and an $8.5 billion deferred services fee. That is a $10 billion penalty payable by SpaceX shareholders to Cursor's venture capitalists just for saying no.<br>The dilution stack is consequential and effective dilution to IPO investors from option pool, EchoStar shares, Cursor (if exercised), and Musk new grants could be 20–35% over a 5-year horizon, depending on milestone achievement:<br>Musk's new 1.302B restricted Class B shares (not yet vested) represent potential 10% additional dilution if market cap milestones are achieved<br>EchoStar shares at $42.40 fixed price represent certain dilution to IPO investors at whatever the IPO price exceeds $42.40<br>Cursor acquisition at $60B equity value represents additional dilution if exercised<br>The option pool of ~9.4B shares, relative to ~12.5B pre-IPO shares, is 42.86% dilution on a fully diluted basis<br>Valuing SpaceX<br>The IPO is targeting a $1.75 trillion valuation and a raise of up to $75 billion. At $1.75T with blended 2026 estimated revenue of $35–40B (including Anthropic ramp, Starlink growth, Space segment), the implied forward revenue multiple falls to ~44–50x.<br>Adjusted EBITDA for 2025 was $6.6 billion with Anthropic adding ~$7.5B in incremental high-margin revenue in H2 2026, 2026E Adj. EBITDA could approach $15–18B (rough estimate obviously). At $15–18B Adj. EBITDA, the $1.75T implied multiple...