SpaceX: A Structured IPO

Three features of SpaceX's S-1/A that we think are getting less attention than they deserve ahead of next week's anticipated listing.

Disclosures. This post reflects PEP's views as of June 4, 2026 and is provided for informational and educational purposes only. It is not investment advice, a recommendation, or an offer to buy or sell any security. PEP and its affiliates and clients invest in private-company secondary transactions and may hold, acquire, or dispose of interests in SpaceX, xAI, Cursor, Anthropic, Tesla, Apollo, NVIDIA, Valor-managed funds, or other parties referenced below. We have no role as a selling shareholder, underwriter, or placement agent in the SpaceX offering, and no allocation through the directed share program. All facts about SpaceX, xAI, and the offering are sourced from the company's S-1/A filed June 3, 2026, or from the third-party reports cited inline. This post contains forward-looking statements that involve significant uncertainty; actual outcomes may differ materially. Past performance is not indicative of future results. See additional disclaimers at the bottom.

We've previously written about whether the public market would underwrite SpaceX's ascendant private mark on the strength of its strategic positioning, or whether the messiness several layers down would force a pause. We now have the answer in two stages. On May 11, 2026 SpaceX filed its initial Form S-1, and on June 3 the company filed an amended S-1/A that, unusually, set an exact offering price rather than a range: 555,555,555 Class A shares at $135.00, raising approximately $75 billion at a $1.77 trillion fully diluted valuation. Shares are expected to begin trading on Nasdaq under the ticker SPCX later this month, per press reports. The size is unprecedented — the largest IPO in U.S. history, twice the prior record.

Most coverage will quote the trailing P/S multiple (roughly 94x at the reported $1.77 trillion mark). The more interesting story sits one layer below the headline, in three structural features of the deal that the multiple, on its own, does not price.

1. The PRSU package frames the valuation conversation

Given the legal history around Elon Musk's prior equity awards, the executive compensation note repays close reading. On January 13, 2026, the SpaceX board approved a grant to Mr. Musk of one billion performance-based Class B restricted shares, structured in 15 equal tranches (S-1/A, "Executive Compensation — Other Matters — 2026 Compensation Developments"). Each tranche vests only when both (i) a specific market capitalization milestone is met and (ii) the company has established a permanent human colony on Mars with at least one million inhabitants. The market-cap milestones run from $500 billion (tranche 1) to $7.5 trillion (tranche 15), each step adding $500 billion. On March 23, 2026, the board cancelled a prior xAI-originated award and replaced it with 302,072,285 additional performance-based Class B restricted shares across 12 tranches, with milestones from $1.065 trillion to $6.565 trillion and an operational gate of "non-Earth-based data centers capable of delivering 100 terawatts of compute per year."

The same ambition runs through the TAM disclosure. SpaceX estimates its quantifiable TAM at $28.5 trillion — $370 billion in Space, $1.6 trillion in Connectivity, and $26.5 trillion in AI, of which $22.7 trillion is "enterprise applications" (S-1/A, "Business — Our Market Opportunity"). The enterprise figure is functionally all global enterprise IT spending, indefinitely. Aspirational TAM slides are common in pitch decks; what stands out here is that SpaceX is a mature, scaled business including the figure in its IPO prospectus.

Taken together, the PRSU package and the TAM disclosure shift the valuation conversation from "what does $18.7 billion of 2025 revenue support?" to "what does a credible path toward $7.5 trillion look like?" A year ago SpaceX cleared a tender at roughly $400 billion. The new mark of $1.77 trillion requires investors to credit forward optionality on Starship, the xAI integration, orbital compute, and Starlink's continued scaling.

Mr. Musk has a track record of delivering on packages structured this way. The 2018 Tesla performance award — also a market-cap-hurdle structure that many at the time dismissed — fully vested by 2022. Falcon 9 reusability was widely written off as economically impossible before it became the industry default. Starlink was supposed to fail; it now reports more than 10 million subscribers, with the most recent million added in 53 days (SpaceX/Shotwell, Feb. 14, 2026). None of which guarantees Mars or 100 terawatts of orbital compute, but it shapes how the market is likely to weigh the long-dated optionality embedded in the offering. The bull case is a founder who has repeatedly delivered against aggressive targets. The bear case is that the aspirational frame distracts from near-term numbers that, on their own, are difficult to reconcile with a $1.77 trillion mark.

2. The AI segment merits its own SOTP analysis

The clearest place to see the gap between the aspirational frame and the underlying business is the AI segment. xAI was acquired in February 2026 in an all-stock transaction at a reported $250 billion implied valuation (Bloomberg). On a 2025 trailing-revenue base of approximately $3.2 billion (S-1/A, "Note 19 — Segments"), most of which is legacy X (Twitter) advertising rather than frontier-AI revenue, that's roughly 78x trailing sales, set internally between Musk-controlled entities trading equity with each other.

The forward picture is materially different. Two 2026 compute arrangements reshape it. In May 2026 SpaceX entered Cloud Services Agreements with Anthropic for access to roughly 325,000 NVIDIA GPUs across COLOSSUS and COLOSSUS II, under which the customer agreed to pay $1.25 billion per month through May 2029 (S-1/A, "Compute Services Agreements with Third Parties"). After an initial three-month period, either party may terminate on 90 days' notice. Separately, in April 2026 SpaceX entered a compute and option agreement with Anysphere (doing business as Cursor), which gives SpaceX a right (but not obligation) to acquire Cursor at an implied equity value of $60 billion, subject to a $1.5 billion termination fee in specified cases (S-1/A, "Business — Collaboration with Cursor"). By 2027 we expect the AI segment's revenue mix to be predominantly compute-as-a-service rather than X advertising, Grok subscriptions, or model API revenue.

This matters for how the segment should be valued. Compute-leasing revenue is fundamentally a neocloud business — comparable to CoreWeave, Lambda, Crusoe, and Nebius. Public neocloud peers trade in the rough range of 6–10x forward sales and 10–14x forward EBITDA, reflecting capital intensity, contractually-driven revenue, and a different margin profile from software. By bundling Anthropic's $15 billion of annualized compute revenue inside an "AI segment" that also contains Grok and X, SpaceX may earn frontier-lab multiples on revenue that, decomposed, looks more like a neocloud's. We think a sum-of-parts analysis on the AI segment is the right exercise.

A second consideration: the contribution margin on the Anthropic deal is meaningfully affected by a related-party arrangement that has received less attention. The xAI GPU fleet at COLOSSUS II was financed through three equipment lease agreements with Valor Equity Partners — the firm of sitting SpaceX director Antonio J. Gracias, who, together with Valor-affiliated entities, beneficially owns 7.3% of SpaceX's Class A common stock pre-IPO (S-1/A, "Security Ownership of Certain Beneficial Owners and Management"). Public reporting indicates Valor backed the structure with a $3.5 billion senior credit solution from Apollo and anchor equity participation from NVIDIA. Under the three lease agreements, the xAI lessee subsidiary has agreed to make aggregate cash payments of $6,986 million, $6,633 million, and $6,587 million — roughly $20.2 billion in total undiscounted lease payments over the terms. SpaceX or one of its subsidiaries guarantees the payments. Through April 30, 2026, $885 million had been paid in 2025 and $1,917 million in the first four months of 2026 — implying a current run-rate of roughly $5.8 billion per year, of which a meaningful portion is recycled from the Anthropic compute revenue (a back-of-the-envelope estimate, not a number drawn from the S-1/A).

Three additional points are worth highlighting.

First, on accounting, the S-1/A discloses that "the Valor transaction was deemed to be a failed sale-leaseback transaction" and SpaceX has recorded the related debt on its consolidated balance sheet (S-1/A, "Note 18 — Related Party Transactions," and "Note 17 — Related Party Transactions" in the March 31, 2026 interim financials). We do not characterize the auditor's reasoning beyond what the filing says.

Second, on representations, the S-1/A's Tesla-related-party disclosure uses the standard arm's-length representation ("on terms no less favorable to SpaceX than those generally available to unaffiliated third parties under similar circumstances"). We did not find equivalent language in the Valor section. We flag the difference; we don't draw a conclusion from it. The S-1/A also discloses that SpaceX will adopt a written related-person-transaction policy administered by the audit committee following the offering.

Third, there is duration mismatch. Anthropic can terminate its compute purchases on 90 days' notice after the initial three-month period. The Valor lease payments — and SpaceX's guarantee of them — are fixed and multi-year. If the Anthropic relationship changes, the Valor obligations do not. That outcome is not necessarily bad — Grok demand or third-party compute resale could absorb the capacity — but it is a structural feature investors should price.

Finally, COLOSSUS II's near-term power supply faces regulatory friction. The NAACP, represented by Earthjustice, has sued xAI under the Clean Air Act for operating unpermitted methane gas turbines at the Southaven, Mississippi facility supporting Colossus 2; the Mississippi Department of Environmental Quality reports 46 mobile turbines on site. On April 30, 2026, SpaceX also entered an asset purchase agreement to acquire roughly $2 billion of mobile gas turbines from an unaffiliated third party (S-1/A, Note 9). Space-based data centers will likely face less scrutiny, but the terrestrial buildout continues to operate against a friction-heavy permitting backdrop.

3. The lock-up architecture and the demand mechanisms it meets

The most LP-relevant section of the S-1/A is the underwriting note. SpaceX's lock-up differs from recent IPOs in ways designed for the specific demand environment around this listing.

The basics: 555,555,555 shares at $135, or roughly 4.4% of common stock outstanding post-offering — about $75 billion at IPO, which would still make it the largest U.S. IPO ever by absolute proceeds. Mr. Musk is subject to a 366-day lock-up with no early-release provisions. Approximately 60% of shares outstanding are subject to lock-ups of more than one year (S-1/A, "Shares Eligible for Future Sale"). All other holders are subject to a 180-day lock-up with a staircase of timed and milestone-triggered automatic early releases. Per the S-1/A, the schedule is as follows.

On the second full trading day after the first quarterly earnings release as a public company ("First Earnings Release Date"): up to 911.5 million shares (20% of the 180-day cohort) are released. If the closing price has been at least 30% above the IPO price for five of the ten consecutive trading days ending on the First Earnings Release Date, an additional 455.8 million shares are released on that same date. Further tranches release at days 70, 90, 105, 120 and 135 (319.0M, 319.0M, 328.4M, 328.4M and 328.4M respectively). On the second trading day after Q3 2026 earnings, up to 1.3 billion additional shares (28%) release. Remaining 180-day-cohort shares release at day 180. The extended (366-day) cohort then releases on a separate schedule ending with the Q2 2027 earnings release.

What makes the architecture notable is the demand environment it meets, not the structure on its own.

The first demand source is faster index inclusion. Nasdaq's "Fast Entry" methodology, effective May 1, 2026, permits newly listed companies in the top 40 by market cap to enter the Nasdaq-100 after 15 trading days, down from a multi-month seasoning period; the minimum float requirement was eliminated. Reuters and other outlets have reported that rapid index inclusion was a stated condition of SpaceX's listing-venue choice. Similar fast-entry adjustments by FTSE Russell and CRSP point in the same direction. According to a Benzinga report citing Goldman Sachs analysts, the rule change could trigger roughly $22–27 billion of forced ETF buying from physically backed index funds, with potentially $60 billion-plus across the broader Nasdaq-100 ecosystem. We do not have access to the underlying Goldman note and present these figures as press attribution, not endorsed forecasts.

The second is retail demand. The S-1/A reserves shares through a Directed Share Program for parties "identified by our management." Mr. Musk's direct social-media reach — Statista reports approximately 240 million followers on X as of May 2026 — has historically been an effective channel for mobilizing retail interest around his companies. Combined with the Fast Entry passive bid, the retail and passive demand sources are positioned to absorb the staged supply.

The 30%-above-IPO bonus tranche at the First Earnings Release Date is the linkage between the supply and demand sides: a Q2 print that holds the stock 30% above $135 for the required window unlocks an additional 10% of the 180-day cohort. If everything works, the equity transitions from scarce-and-volatile to liquid-and-passive-bid over a deliberate 12-month curve. The reverse case is structurally symmetric — a Q2 miss leaves the conditional supply sealed, but with sentiment weakening at the same time. S&P 500 inclusion remains a separate, later question that requires four consecutive quarters of GAAP profitability under current rules.

For LPs, the takeaway is that the lock-up structure is forward-leaning rather than defensive. SpaceX is asking the public market to engage with both the company's fundamentals and the trading dynamics the structure was designed for.

What we're watching

Three markers in particular:

• Pricing dynamics. Cerebras showed strong momentum through bookbuilding. SpaceX's choice to set an exact price up front rather than a range is unusual; we'll be watching for any pricing-supplement amendments and aftermarket trading in the first days.

• COLOSSUS II power buildout and the Anthropic relationship. The next 400+ MW at COLOSSUS II depend on permitting outcomes under continuing Clean Air Act litigation. If construction or operation slips, the GPU pipeline supported by the Valor structure could outpace the power supply. We'll also be watching how the Anthropic relationship evolves; Mr. Musk has been publicly critical of Anthropic in the past, and the duration of the relationship beyond the initial three months is at each party's option.

• The Q2 2026 earnings print and the 30% trigger. Whether the earnings date falls within the post-Fast-Entry passive-bid window, and whether the print supports a stock price 30% above the IPO price, will determine whether the conditional release tranches unlock.

SpaceX's S-1/A is an important piece of disclosure for public investors. What it shows is a company that has applied the same vertical-integration philosophy to its IPO that it applies to its rockets and its data centers — extending the design discipline to the lock-up staircase, the underwriting note, the index providers' listing rules, and the demand sources positioned to meet them. That on its own is a notable feat, even before the opening bell.

Additional disclaimers

This material is provided by PEP for informational purposes only and does not constitute investment, legal, tax, or accounting advice, or an offer or solicitation to buy or sell any security or to invest in any fund or other investment vehicle. PEP and its affiliated funds may hold, acquire, or dispose of positions in any of the companies referenced. No representation is made that the strategies or trading dynamics discussed will be successful. Forward-looking statements in this post — including statements about index inclusion, lock-up release outcomes, the Anthropic and Valor relationships, regulatory developments, and potential public-market trading dynamics — involve known and unknown risks and uncertainties; actual results may differ materially. All financial figures attributed to SpaceX are sourced from the company's S-1/A filed with the SEC on June 3, 2026. Third-party press reports are cited inline; PEP has not independently verified those reports. Recipients should conduct their own due diligence and consult their own advisers before making any investment decision.

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RESEARCH DISCLOSURE This article is for informational and educational purposes only. It represents independent thematic analysis prepared by PrePublic Equity Partners ("PEP") and is intended to discuss industry trends and company dynamics in the private markets. This content does not constitute investment advice, a recommendation, or a solicitation to buy or sell any security or investment product. PEP is not a registered investment adviser or broker-dealer. Any offer or solicitation relating to securities will be made only through definitive offering documents to eligible investors. PEP and its affiliates may hold financial interests in companies discussed herein and reserve the right to trade such positions at any time without notice. Private market investing involves significant risk, including illiquidity and potential loss of principal. All data is sourced from publicly available information and has not been independently verified.

IMPORTANT DISCLOSURE This content is published by PrePublic Equity Partners ("PEP") for informational and educational purposes only. It does not constitute an offer to sell, or solicitation of an offer to buy, any security. No such offer or solicitation is made except by means of a confidential Private Placement Memorandum or other definitive offering documents delivered to eligible investors only. PEP is not a registered investment adviser with the SEC or any state securities regulator. Nothing in this article should be construed as personalized investment, financial, legal, or tax advice. All views are the opinions of the author as of the date of publication and are subject to change without notice. Private market and pre-IPO investing involves a high degree of risk, including illiquidity, potential total loss of principal, and reliance on unverified private company data. Past analytical observations are not indicative of future results. PEP and its affiliates, officers, or employees may hold financial interests in companies discussed in this article. PEP reserves the right to buy or sell such positions at any time without notice. PEP does not receive compensation from issuers mentioned in its research. PEP is an independently operated subsidiary of Alumni Ventures, LLC.