Financial documents released on Wednesday (20 May) ahead of SpaceX going public - in what is expected to be Wall Street’s biggest ever listing - revealed the firm made operating losses of $1.94 billion, despite Elon Musk being tipped to become the world’s first trillionaire.
Of SpaceX’s three divisions, only Starlink, its satellite internet arm, was profitable in the first three months of the year, making an operating profit of $1.19 billion.
Even SpaceX’s $4.69 billion in first-quarter revenue was not enough to prevent the company from posting an overall loss.
Worst hit was SpaceX’s AI division, which recorded an operating loss of $2.47 billion in the first quarter alone, driven largely by Musk’s acquisition of social media and AI firm xAI.
Musk’s purchase of xAI accounted for 76% of SpaceX’s $10.1 billion in capital spending during the quarter.
The space firm could be valued at a record-breaking $1.75 trillion when it lists on the Nasdaq and Nasdaq Texas as early as mid-June, potentially making the 54-year-old Musk the world’s first trillionaire.
The projected trillionaire status reflects investor expectations of SpaceX’s future dominance rather than its present financial performance. Musk’s fortune is based on the paper value of his holdings, not cash profits generated today.
Investors are valuing SpaceX on expectations of future technological dominance rather than current earnings.
The company’s plans rely heavily on technology that has not yet been built, including proposals to operate solar-powered data centres in space, targeting a potential market worth $28.5 trillion, according to the filing.
The documents also reveal Musk’s iron grip on the company. Filings showed he will retain 85.1% of the combined voting power.
SpaceX will use a dual-class share structure that gives Class B shareholders 10 votes each, concentrating control among Musk and a small group of insiders, while Class A shares sold to public investors will carry one vote each.
The filings also show Musk can effectively only be removed from the company by himself.
However, the board has tied much of his compensation to ambitious targets, including establishing a permanent human colony on Mars and building space-based data centres.
The disclosure comes during a critical week for the rocket maker, which is preparing to launch a test flight of its next-generation Starship rocket on Thursday (21 May).
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