From Barron's, April 10, 2026, 1:00 am EDT:
From the biggest IPO on record to the largest M&A deal in history?
SpaceX’s initial public offering may be the largest IPO ever, but it might just be a prelude to the largest merger ever—a combination of Tesla TSLA with Elon Musk’s space venture.
On April 1, SpaceX reportedly filed confidentially for an IPO. It’s likely to raise $75 billion, more than double the $29 billion Saudi Aramco raised in 2019, and three times the $25 billion Alibaba Group Holding raised in 2014. Its valuation could come in close to $2 trillion, immediately making the company the sixth-most valuable in the U.S. Not bad for a venture that was worth only $350 billion a year ago and was founded by a 30-year-old who thought it was dumb to dispose of rockets as if they were plastic straws.
SpaceX’s IPO would be remarkable on its own, but it might only be the first step in a process Musk calls “convergence,” the act of combining all his companies into one. That process is well under way. Just two months ago, SpaceX merged with Musk’s xAI in a deal that valued the X parent at $250 billion. A combination of Tesla and SpaceX, to create a $3.5 trillion behemoth, would yield an AI-infused industrial megaconglomerate that would instantly become one of the most valuable companies in the world—and the premier manufacturing company on the planet.
“I think it’s probable,” says Baird analyst Ben Kallo. “It looks like that’s going to happen.”
No matter what happens, the SpaceX IPO is coming first, and it’s the better business. Yes, it could help rescue Tesla—whose shares have fallen almost 30% after hitting a record high in December—from its current stagnation. But for now, investors may be better off focusing on SpaceX and holding off on buying both stocks.
SpaceX is already staggeringly successful—and has a knack for making others in the industry look a little foolish. It took only six years from its founding in 2002 for SpaceX to become the first privately funded organization to put a liquid-fueled rocket into orbit. Few understood exactly what was happening. In 2015, SpaceX President Gwynne Shotwell was chided in Congress about how her company could afford to offer launches at a price far below the $400 million of America’s dominant commercial launch provider, ULA, a 50/50 joint venture between Boeing and Lockheed Martin.
“It is hard for me to say,” she replied. “I don’t know how to build a $400 million rocket.” By 2017, SpaceX was reusing rockets, dramatically lowering the cost to reach orbit.
More recently, SpaceX posted a picture of its improved Raptor rocket engines, leading Tory Bruno, at the time the head of ULA, to comment that there was “no need to exaggerate” SpaceX’s tech by showing “partially assembled” engines. SpaceX responded by posting a video of the engine running. “Works pretty good for a ‘partially assembled’ engine,” said Shotwell. The tech, which integrated cooling and sensors inside components, appeared almost magical—even to industry insiders.
Investors have to put a multiple on that magic when SpaceX goes public. Currently worth $1.25 trillion after the xAI merger, SpaceX will be aiming for a valuation of up to $2 trillion, or roughly 75 times estimated 2026 sales and 160 times estimated earnings before interest, taxes, depreciation, and amortization, or Ebitda.
It’s an eye-popping valuation, and not one that lends itself to comparison—not even to Tesla, which trades for closer to 100 times estimated Ebitda. But SpaceX is unique. It handles more than half of the world’s orbital launches, helped by its massive cost advantage from reusable rockets. It also built Starlink, a profitable space-based broadband product, which had more than nine million subscribers at the end of 2025, up roughly 100% year over year, each paying at least $600 a year for the service. SpaceX is “a cash machine,” says Rainmaker Securities managing director Greg Martin, who believes SpaceX’s Ebitda profit margins were as high as 50% before the xAI merger.
For SpaceX’s valuation to make any kind of sense, the company will have to keep those margins high as it grows—and that means making it even cheaper to go to space. SpaceX’s partially reusable Falcon 9 costs an estimated $2,000 to $3,000 per kilogram to reach low Earth orbit, 1/20th the cost relative to the Space Shuttle. SpaceX’s huge, fully reusable Starship could cut costs relative to Falcon by another 80% to 90%....
....MUCH MORE, so far he's just clearing his throat.
