SpaceX is experiencing a decisive week. Elon Musk’s company released documents related to its initial public offering of shares, known by the acronym IPO, and is preparing for another test of Starship, the largest launch system ever developed by the company.
Depending on the success of the operation, the company’s valuation could reach US$2 trillion or more — the equivalent of at least R$10 trillion — which could make the South African tycoon the first trillionaire in the world.
But what is an IPO?
IPO is the English acronym for Initial Public Offering, the name given to the process by which a company sells shares to the public for the first time.
In practice, it is the moment when a company goes public and starts allowing investors to buy small slices of the business on the Stock Exchange.
To achieve this, the company cannot simply offer its shares to the market. The process begins with the registration of a publicly-held company with the securities market regulatory body — in Brazil, the Securities and Exchange Commission (CVM).
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Furthermore, the company needs authorization to sell shares and to be listed on the stock exchange. After this step, you receive a code by which your shares can be traded. Ambev shares, for example, are identified by the code .
The company must also prepare an offering prospectus, a document aimed at the investing public. It presents the company’s plans, the market situation, business risks, financial data and information about management.
The offer can be primary or secondary. In the primary, the company issues new shares to sell them to the public, expanding its shareholder base. In this case, the money collected goes to the company’s own cash flow. In the secondary, existing shares are put up for sale, generally belonging to partners who have decided to reduce their stake. In this format, the resources go to the selling shareholders, and not to the company.
When carrying out an IPO, the company expands its number of partners, as whoever buys shares now owns a small part of the business. Among the main reasons for going public is the possibility of raising funds without resorting to loans or taking on new debt.
And what will happen to SpaceX?
In the case of SpaceX, the expectation is to raise tens of billions of dollars in June, in an operation that could value the company at US$2 trillion or more. The funds would help boost the company’s ambitions in artificial intelligence and fund the development of Starship.
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The launch of the rocket is considered even more important than the release of the IPO documents itself. The window for Starship’s 12th test flight opens at 6:30 p.m. Eastern Time. The broadcast can be followed on the SpaceX website and on the X platform.
The test marks the debut of the latest version of the launch system, which is about 124 meters tall when the booster and upper stage are stacked. The booster has 33 engines and produces more than 8 thousand tons of thrust.
The lower stage is expected to land on an unmanned vessel off the coast of Texas. The upper stage will have a series of test objectives, including simulating payload deployment and developing the heat shield.
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The importance of Starship is linked to the promise of drastically reducing the cost of accessing orbit. The system is designed to cut this cost by 90% or more. The Falcon 9 rocket, also from SpaceX, had already reduced the cost of reaching space by 95% compared to space shuttles.
The difference is that Starship was designed to be completely reusable, with both the lower and upper stages being reused. SpaceX pioneered reusable rockets, but in the Falcon 9, only the first stage is reused.
The reuse of the upper stage would allow for new applications, such as refueling spacecraft in orbit, a resource considered essential for increasing the range of space missions, including towards Mars.
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The cost reduction would also open up space for projects such as in-orbit artificial intelligence data centers. Elon Musk believes that orbital computing could become competitive with that performed on Earth within a few years. Although operating in space is complex, the advantage would be not to depend on energy bills paid to utilities.
Starship tests typically attract hundreds of thousands of viewers online. As SpaceX’s IPO approaches, interest is expected to be even greater.
