The Number Keeps Moving — And Musk Isn't Happy About It

Since we last covered this story, the valuation target has shifted again. SpaceX is now reportedly targeting at least $1.8 trillion, down from the original $2 trillion goal, according to Bloomberg.

Elon Musk responded on X with one word: "False."

The contradiction itself is striking. Stable IPOs don't have their CEOs publicly disputing their own pricing. Whether Musk is right and the leaks are wrong, or whether he's quietly accepting the valuation while downplaying it, the back-and-forth suggests instability in how this deal is being marketed.

The S-1 Numbers Don't Support the Hype

The prospectus is now public.

According to The Motley Fool's analysis of SpaceX's S-1, the company posted $18.7 billion in revenue in 2025 — a 33% increase. But the GAAP operating loss came in at $2.6 billion, a dramatic swing from a $466 million profit in 2024.

Q1 2026 is worse. Revenue growth slowed to 15.4%, bringing in $4.7 billion. The operating loss hit $1.94 billion in a single quarter, driven by R&D expense more than doubling to $3.5 billion.

At $1.8 trillion valuation against $18.7 billion in annual revenue, SpaceX trades at roughly 96x price-to-sales. That's more expensive than every stock in the S&P 500. And it's losing money.

The xAI Merger Is a Problem Nobody Wants to Name

A massive chunk of those losses traces directly to the xAI acquisition.

When SpaceX merged with xAI — Musk's AI company — xAI was valued at $250 billion. But as The Motley Fool reported, xAI's 2025 revenue was just $3.2 billion, and its growth slowed to 12.5% in Q1 2026.

Compare that to Anthropic, which just announced run-rate revenue of $47 billion and raised money at a $965 billion valuation. xAI is a fraction of that size.

SpaceX didn't just acquire an AI company. It acquired Musk's AI company, at a valuation that looks increasingly detached from reality, and now retail investors are being asked to absorb that risk.

Wall Street Is Literally Rewriting Rules for This IPO

Major indexes and ETF providers are actively reworking their methodologies to handle SpaceX's entry. Jacob Friedman, investment manager at Focused Wealth Management, said: "The biggest IPO in history is about to land in passive portfolios faster than anything comparable has before."

The float problem explains why.

SpaceX's public float — the shares actually available for trading — is tiny relative to its valuation. Business Insider reported the company would have a public float of just 2.86% if it raises $50 billion at $1.75 trillion, or 3.75% at the high end. For context, Microsoft floats roughly 99.97% of its shares. Nvidia floats about 95.8%.

Most major U.S. large-cap companies float 80% or more.

A 3% float on a $2 trillion company means index funds and ETFs will be forced to buy a stock with almost no liquidity. Any large sell order could crater the price. Any large buy order could spike it artificially. This creates a fundamentally broken price discovery mechanism — and everyday 401(k) holders will be along for the ride whether they want to be or not.

CNBC's Jim Cramer Captured the Real Problem Perfectly

In a piece for CNBC, Jim Cramer described being approached by a racetrack executive, a security guard near the NYSE, and a colleague in landscaping — all wanting to know how much SpaceX to buy.

His point wasn't bullish. It was a warning signal.

Cramer, who has spent time on both the sell-side and buy-side of IPO syndicate work, noted that Musk "wants there to be plenty of retail participation" and wants a valuation of at least $1.8 trillion. Cramer called that "absurd" — not the company, but the pricing expectation being pushed into retail hands.

When the landscaper and the security guard are asking how much to buy before the S-1 numbers are even understood, what's happening is a distribution problem disguised as demand.

What's Actually Happening With the Valuation Cut

The valuation cut from $2 trillion to $1.8 trillion signals that sophisticated institutional buyers — the ones who actually move IPO allocations — are not fully buying the original $2 trillion story. When institutions push back, bankers quietly reprice. That's what happened here, Musk's X post notwithstanding.

Meanwhile, the index rewriting story deserves far more scrutiny. The passive-investing machine that manages trillions in retirement savings is being asked to accommodate a loss-making, founder-controlled, low-float mega-cap that is pricing itself on the hope of colonizing Mars and dominating a $22.7 trillion AI market it has not yet come close to capturing.

What This Means for Regular People

If you own an S&P 500 index fund — and tens of millions of Americans do — you may end up owning SpaceX whether you want to or not, at whatever price the market settles on post-IPO.

You don't get a vote. You don't get a prospectus summary. You just get exposure.

The company is losing nearly $2 billion per quarter, trading at nearly 100x sales, carrying an AI subsidiary that's being lapped by competitors, and pricing into a market where Wall Street is literally changing the rules to fit it in. The fact that your security guard and your landscaper want in is worth considering carefully.