Investors have waited for SpaceX to go public for the longest time. Now, it finally looks like it's happening.



Reports say Elon Musk's space company could launch its IPO on June 12 with a valuation between $1.75 trillion and $2 trillion. If that happens, SpaceX could become the biggest IPO in history.



That is why so many people are excited.



But while many investors see this as a huge opportunity, others believe it could also become one of the riskiest stock launches Wall Street has ever seen.



<h2>What's Causing the Hype Around SpaceX?</h2>



There are not many companies like SpaceX.



The company already leads the space industry with its reusable rockets and satellite business. It has worked closely with NASA and completed several astronaut missions into space.



SpaceX is also the company behind Starlink, the satellite internet service that is growing very quickly around the world.



Reports say Starlink already has close to 10,300 satellites in orbit and about 9 million users globally. The business reportedly made around $11.4 billion in revenue last year and has very high profit margins.



That alone is enough to get investors excited. But there's more.



Earlier this year, Musk merged his AI company xAI into the SpaceX business. Reports also suggest SpaceX wants to build data centers in space to support artificial intelligence companies in the future.



Because of this, many investors no longer see SpaceX as just a rocket company. They now see it as a space, AI, the internet, and a technology giant all at once.



That's a major reason why Wall Street believes the company could be worth nearly $2 trillion.



<h2>Wall Street Is So Bullish on SpaceX</h2>



Big investors are already lining up ahead of the IPO.



Reports say BlackRock could invest between $5 billion and $10 billion into the IPO. Several hedge funds that invested in SpaceX years ago are also expected to make billions if the company goes public at its expected valuation.



One hedge fund, D1 Capital Partners, reportedly invested in SpaceX back in 2020 when the company was worth around $36 billion. Today, that investment could be worth close to $20 billion.



Wall Street banks are also expected to make huge amounts of money from the IPO. Banks like Morgan Stanley, Goldman Sachs, JPMorgan Chase, Bank of America, and Citigroup are reportedly working on the deal.



SpaceX hopes to raise around $75 billion. Even a small percentage fee from that amount could earn banks nearly $1 billion combined.



That shows just how major this IPO could be.



<h2>But History Says Investors Should Be Careful</h2>



Even with all the excitement, some analysts are warning investors not to get carried away.



History shows that many huge IPOs struggle after going public.



Research from IPO expert Jay Ritter found that large companies often underperform the market after their stock market debut. The analysis said that companies start with very high valuations, and then it becomes much harder for the stock to keep rising quickly.



For example, it's easier for a company worth $20 billion to double in value than for a company already worth nearly $2 trillion.



That doesn't mean SpaceX will fail. But it does mean investors may need to lower expectations for ridiculous gains after the IPO.



Some experts are also worried about what they call the &#34;Musk Effect.&#34;



 Elon Musk is one of the most followed business leaders in the world, but companies connected to him often experience huge price swings.



Tesla is a good example. The stock has had massive rallies and sharp drops over the years, often based on Musk-related news.



Analysts believe SpaceX could become even more volatile because investor sentiment around the company is already high.



<h2>Starship Could Decide Investor Sentiment</h2>



One major thing investors are watching closely is SpaceX's Starship rocket program.



Starship is the giant next-generation rocket Musk wants to use for moon missions, Mars travel, and future space projects.



SpaceX is preparing for another major Starship test flight ahead of the IPO. The upgraded version includes improvements for long-distance missions and space refueling.



A successful test flight could increase investor confidence even more. But there's also risk involved.



SpaceX is known for testing rockets aggressively, and failures are common during development. Explosions and delays are many times treated as part of the learning process inside the company.



Public market investors may not always react calmly to those failures. If Starship faces major problems after the IPO, the stock could become very volatile.



<h2>Tesla Investors Are Starting to Worry</h2>



The possible SpaceX IPO is already affecting Tesla stock.



Tesla shares dropped 3% during its last trading session as investors worried that money and attention could move away from Tesla and into SpaceX.



Some analysts believe Musk may focus more heavily on SpaceX in the future because of its growth opportunities.



Others think investors simply see more excitement in the space business right now compared to the electric vehicle market, which is becoming more competitive.



Tesla still has strong businesses in EVs, robotics, and AI. But SpaceX currently feels like the newer and more exciting story to many investors.



That could create more pressure on Tesla shares in the short term.



<h2>How This IPO Could Change the Market</h2>



This is one reason why this IPO seems to be so crucial, because it goes beyond simply another IPO on Wall Street.



SpaceX is emerging as the hub of the “Muskonomy.” This is an ecosystem of interconnected companies linked through AI, aerospace, satellites, robotics, social media, and computing infrastructure.



The ecosystem includes Starlink, xAI, Grok, Tesla, AI data centers, and perhaps even space-based computing systems.



Some investors are of the view that by buying the SpaceX stock, they sort of have a stake in the company's growth.



But with that come great expectations. At such a massive valuation, SpaceX will need to keep growing very quickly for years to justify its price.



That won't be easy, especially in industries that involve huge risks, expensive technology, and constant innovation.



Don't get me wrong. There's no doubt SpaceX's IPO could become one of the biggest moments in stock market history.



The company has powerful businesses, strong growth, and one of the most ambitious futures investors has ever seen.



But the risks are also very real. The valuation is huge, expectations are high, and Elon Musk's companies are known for volatility.



For investors, that means this IPO could bring both massive opportunity and risk at the same time.



Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.

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SpaceX is set to launch its IPO on June 12, potentially valuing the company between $1.75 trillion and $2 trillion, making it the largest IPO in history. While excitement grows among investors, analysts caution about potential risks, citing historical trends of large IPOs underperforming post-launch. Concerns also arise regarding the volatility associated with Elon Musk's ventures. The upcoming Starship rocket test flight could influence investor sentiment significantly, but failures during development may lead to stock volatility. Tesla shares have already seen a decline amid these developments.

- SpaceX is reportedly preparing for its IPO on June 12, potentially valuing the company between $1.75 trillion and $2 trillion.  
- While many investors are excited about the opportunity due to SpaceX's strong position in the space and technology sectors, analysts caution about the risks associated with high valuations and Elon Musk's influence.  
- The success of the upcoming Starship test flight may significantly impact investor sentiment and the stock's volatility post-IPO.

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SpaceX IPO May Break Records, But Analysts Warn Of Potential Losses