‘Extreme concern’: 2 big reasons why the SpaceX IPO is worrying some stock market watchers

SpaceX is preparing for its initial public offering (IPO), with expectations pointing towards it being the largest on record. At an anticipated IPO price of $135 per share, the company's valuation is projected to reach approximately $1.75 trillion. This valuation would position SpaceX among the world's most valuable public companies, ranking it eighth, just below Broadcom ($1.77 trillion) and above Saudi Aramco ($1.74 trillion). However, market watchers have raised significant concerns regarding this high valuation. A primary concern stems from SpaceX's financial performance, as the company reported a net loss of around $4.9 billion last quarter. Only its Starlink division is currently profitable, leading some analysts and investors to describe the company as "deeply unprofitable," according to The Motley Fool. This suggests that the IPO valuation heavily relies on future success across multiple ventures, the certainty of which remains a point of contention. For instance, Morningstar analysts, as reported by CNBC, have suggested a significantly lower fair market value for SpaceX, estimating it at approximately $780 billion, indicating a potential overvaluation.