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

Space X’s initial public offering is just one day away, and it is widely expected to be the largest on record. At its IPO price, Space X is expected to be valued at around $1.75 trillion—a staggering sum that would put it firmly in the rankings of the world’s most valuable companies. The IPO may also help make Space X founder Elon Musk the world’s first trillionaire. But as the company’s stock listing nears, several lingering concerns about the offering have been expressed by market watchers, from analysts to lawmakers. Here are two of the most prominent. Valuation concerns SpaceX’s IPO price is expected to be $135 per share. That puts the company’s total valuation at around $1.75 trillion, an astonishingly high sum for any company. At that valuation, it would instantly make SpaceX the world’s eighth most valuable public company, just behind Broadcom, which currently has a market cap of $1.77 trillion, and just ahead of Saudi Aramco, which currently has a market cap of around $1.74 trillion. The thing is, many industry analysts and retail investors have expressed concern over this sky-high valuation. The main reason for these concerns is that while most other companies in the trillion-dollar club have firm profitability behind them quarter after quarter, SpaceX reported a net loss of around $4.9 billion last quarter. Only one of its divisions, Starlink, generates a profit. As the Motley Fool noted, the company as a whole is “deeply unprofitable.” In other words, many analysts and investors feel that SpaceX’s IPO valuation prices in a lot of faith that the company will succeed on several fronts in the years ahead. However, as with all things in life, whether that actually pans out is uncertain. Some high-profile analysts have argued that SpaceX’s IPO is highly overvalued. This includes analysts at Morningstar, who have said that SpaceX actually has a much smaller fair market value of around $780 billion, notes CNBC. If this analysis is right, and more investors come to