SpaceX Plans Major Stock Sale Amid Financial Challenges

Elon Musk has announced a major move to take SpaceX public, revealing plans for an enormous stock sale. According to a filing, SpaceX, officially known as Space Exploration Technologies Corp., incurred a loss of $2.6 billion from operations last year, even though it generated $18.7 billion in revenue. Losses continued to accumulate in the earlier part of this year.

The filing does not specify the amount Musk aims to raise, but reports suggest a figure around $75 billion. If achieved, this would surpass the $26 billion garnered by Saudi Aramco’s public offering seven years ago, making it the largest to date.

SpaceX intends to use the funds to support its ambitious projects aimed at human expansion beyond Earth. The company’s vision includes establishing human colonies on the moon and Mars, as detailed in the prospectus. One section highlights Musk’s compensation tied to maintaining “a permanent human colony on Mars with at least one million inhabitants.”

The potential stock sale could elevate Musk, the SpaceX founder since 2002, to the status of world’s first trillionaire. Forbes estimates his current net worth at $839 billion.

SpaceX is involved in several ventures. The company’s reusable rockets that propel astronauts into orbit rely heavily on substantial government contracts, worth $6 billion from NASA, the Defense Department, and other agencies over the past five years.

Starlink, SpaceX’s significant source of revenue, operates 10,000 satellites to provide internet to 10 million users across 150 countries. It generated $4.4 billion in operating income last year.

SpaceX has faced criticism for acquiring Musk’s social media platform X, previously Twitter, and his artificial intelligence firm xAI, both of which are losing money.

Questions have arisen about Musk’s ties to the Trump administration, including whether his significant campaign contributions have influenced the large government contracts SpaceX has received.

Musk receives $54,080 in annual salary which hasn’t changed since 2019. His compensation largely depends on stock grants divided into 15 shares, awarded based on market cap goals. For a full award, SpaceX must reach a stock market value of $7.5 trillion. Additional stock awards are possible if the company achieves space-based data centers.

Musk and certain shareholders will enjoy special voting rights, having 10 votes per share with these shares. This grants them substantial control over corporate decisions, including electing the board of directors, potentially diminishing the influence of other shareholders as warned in the prospectus.

SpaceX is set to market the offering to investors in a “road show,” starting 15 days post-prospectus release. The timeline estimates this could occur on June 4.

Associated Press writer Alex Veiga contributed from Los Angeles.