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SpaceX received a major boost ahead of its highly anticipated IPO after winning a massive $2.29 billion contract from the U.S. Space Force, a move that strengthens the company’s position within the space and defense sector and gives investors an additional indication of the depth of its relationship with U.S. government institutions before one of the most anticipated IPOs in the markets.
The new contract is linked to the Pentagon’s “Space Data Network Backbone” project, which aims to build a low-orbit satellite network that provides high-speed military communications worldwide, as part of a broader trend to develop the U.S. military space infrastructure and enhance reliance on modern space communication systems.
Under the agreement, SpaceX must develop a complete operational model for the project by the end of next year, while the contract alone represents about 18% of the total procurement budget of the US Space Systems Command, which amounts to $15.6 billion, reflecting the importance of the project and the level of trust the company has gained from the US defense establishment.
This development comes at a sensitive time as SpaceX nears its entry into the public markets, with expectations that the IPO roadshow could begin in the first days of June, with trading of the stock starting around the middle of the month, in an offering that could turn into one of the largest and most significant IPOs in the history of the financial markets.
The offering’s appeal is further enhanced by reports indicating that Elon Musk is considering making a portion of the shares available to individual investors through trading platforms such as Robinhood and SoFi, a move that could give individual traders a rare opportunity to participate directly in the IPO instead of limiting it to large investment institutions.
The company is targeting a valuation close to $1.75 trillion, a level that would place SpaceX among the world’s largest publicly traded companies upon listing, and reflects the scale of the stakes involved in its space projects and long-term commercial ambitions.
But behind the media hype and the ambitions associated with space and planetary colonization, the financial picture remains more complex and raises questions that cannot be ignored. SpaceX reported revenues of $4.7 billion in the first quarter, representing only 15% year-over-year growth, while losses widened to $4.3 billion, nearly seven times their level a year earlier.
These figures present investors with an unconventional investment equation, as the targeted valuation is equivalent to about 107 times sales, which is an extremely high multiplier even by the standards of growth and technology companies in the current environment driven by the enthusiasm of artificial intelligence.
SpaceX, for its part, emphasizes that the investment vision should not be measured solely by current figures, noting that it is targeting a potential total market valued at $28.5 trillion, encompassing various activities and services from which the company sees potential for future returns.
Ultimately, SpaceX’s story appears to the markets as a gamble between two visions; the first sees the company as an exceptional project that redefines the space economy and justifies record valuations, while the second views the gap between ambitions and current financial results as a real challenge that investors will need to carefully assess as the moment of subscription approaches.
