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Happy Friday! Enjoy the bank holiday weekend. The London Stock Exchange goes dark for the day, traders turned loose to slow-roast in the sun. Not at PensionCraft. We'll be be bunkered down with ice-cold Fanta, recording away as usual.

In-depth: SpaceX files for the biggest IPO in history.
Newsbites: Temporary inflation reprieve, permanent layoffs, and Nvidia's simultaneously amazing and underwhelming results.
PensionCraft News: Physical AI, rising yields, and portfolio critiques.

IN-DEPTH

Houston, We Have a Valuation

This week, Elon Musk's SpaceX filed for the largest initial public offering in history. My heart and head have been thrown into conflict.

I'm a self-confessed space nerd, raised on a diet of Star Trek, Arthur C. Clarke, and a cheap telescope pointed hopefully at the sky. But I'm also a valuation nerd. And valuation nerds, unfortunately, are paid to ignore the stars.

SpaceX is, by any measure, one of the most remarkable engineering companies of the twenty-first century. It launched more than 80% of the world's rockets last year. It lands its boosters back on the launchpad in perfect synchronisation. It has 10,000-odd Starlink satellites whirling overhead, beaming internet to ships, planes, war zones, and the kind of remote farmhouses that used to suffer the sound of a dial-up modem being strangled.

And the IPO itself is a cultural event as much as a financial one. For the first time, everyday investors get to own a slice of the future they were promised as children. An actual moonshot. The kind that involves real rockets, real satellites, and a roadmap that ends, with a straight face, on Mars.

And yet.

SpaceX generated $18.7 billion of revenue in 2025, up 33% on the prior year. Respectable for a rocket company. Less respectable for a company asking to be valued at $1.75 trillion.

That's a price-to-sales multiple of 94. For context, Nvidia trades on around 25. Apple, around 10. Saudi Aramco, the previous record-holder for the largest IPO in history, listed at about 5.

The bottom line is worse. After folding in xAI, the combined entity reported a $4.9 billion net loss, with $41 billion of accumulated losses on the books. And the spending taps are loosening. Capex jumped from $5.6 billion in 2024 to $20.7 billion in 2025, of which $12.7 billion went on AI infrastructure.

Three businesses in a trench coat

So where's all that money going? SpaceX is now three businesses bolted together: rockets, satellites, and, since February, artificial intelligence.

The rocket business is the famous one, but it isn't the sales engine. Starlink is. The satellite internet division generated $11.4 billion of revenue last year, up nearly 50%, and $4.4 billion of operating profit, up 120%.

Meanwhile, the AI division — acquired when xAI was absorbed at an implied $250 billion — lost $6.4 billion on $3.2 billion of revenue last year. But SpaceX expects big profits in the future, telling investors it is targeting the biggest addressable market "in human history" at $28.5 trillion, of which $26.5 trillion comes from AI. If they're right, today's price could look cheap.

For now, though, Grok — Musk's chatbot — is struggling to gain traction. Thankfully, the chips are not going to waste. Anthropic has agreed to pay $15 billion a year to lease SpaceX's Colossus 1 data centres, more than covering the AI division's hardware bill.

So what's the company actually worth? Aswath Damodaran — NYU’s so-called Dean of Valuation — models the company at a fair value of $1.22 trillion. Roughly 30% below the apparent asking price. And that's Damodaran in a generous mood, baking in years of Starlink growth and assuming nothing important blows up.

Scottish Mortgage, a prominent UK investment trust that has owned SpaceX since 2018, holds the stock on its books at a valuation of $1.25 trillion. Half a trillion dollars below what SpaceX is asking the public to pay.

If the IPO lives up to the hype, it would make SpaceX the 9th most valuable company on Earth, leapfrogging Tesla. This is no ordinary IPO. In more ways than one.

Who's flying this thing?

Firstly, there just won’t be many shares available. SpaceX is selling roughly 5% of the company, the smallest free float of any mega-cap listing in modern history. This could make trading especially volatile.

Then there's who can buy in. Unusually, SpaceX will sell a portion of its IPO directly through Robinhood, Fidelity and Charles Schwab. Normally retail investors are last in the queue, picking up shares in the open market after the institutions have already had their fill, sometimes at sharply higher prices. This time they’re being allowed in at launch.

But once you're in, you'll find your influence is limited. SpaceX is using a dual-class share structure that gives Musk near total control. Class B shares get ten votes each, and lowly Class A shareholders get just one. After the IPO, Musk is expected to control around 80% of the voting power despite a much smaller ownership share. He will likely become the world’s first trillionaire in the process.

Musk can only be removed as chair or CEO by a majority vote of the class B shareholders, in effect guaranteeing his position in perpetuity.

The SpaceX board recently granted him 1.3 billion class B shares, with the award vesting in tranches as the company meets valuation milestones and technical achievements. To get the maximum payout, Musk needs to get AI data centres orbiting Earth and establish a permanent colony on Mars with at least 1 million inhabitants. (To be fair, if Musk moves to the red planet with his kids, he’ll have got a significant head start on the target.)

Cleared for takeoff

Back on Earth, the IPO is going to leave a mark on the market long before Musk gets to Mars.

By rights, the tiny free float should have ruled SpaceX out of the major indices. The indices, on reflection, have decided the rules needed updating.

Nasdaq has shortened its waiting period from 3-12 months to fifteen days, just in time for SpaceX. The company will join the Nasdaq 100 with an index weighting equal to three times the value of its floated shares. A consultation is under way over similar fast-track changes for the S&P 500, including dropping the requirement that companies be profitable.

All the passive money mechanically flowing to SpaceX has to come from somewhere. Index funds will be forced sellers of every other constituent to make room for SpaceX, with the smallest names — the candidates for eventual index deletion — feeling it hardest. Some hedge funds are already positioning to short the most vulnerable Nasdaq 100 stragglers. The pressure will only build when an unusually permissive lockup period begins to expire and insiders are free to sell, though Musk has committed not to sell stock for a year.

Final approach

Let's run the pre-flight checks. The largest IPO in history, the thinnest float of any mega-cap, a related-party AI merger the SEC is already eyeing, a controlled company where outside shareholders get a fraction of the votes for their money, and a prospectus that relies on plans involving "technologies that do not exist".

The bull case is a genuinely unique moat and a founder you would not, on the historical evidence, want to bet against. The bear case is everything else. As one analyst put it, "the valuation is completely dependent on the degree to which people believe in Elon Musk."

And SpaceX is only the opening act. OpenAI's IPO plans are imminent, and Anthropic says it is on track to turn a profit for the first time, laying the groundwork for its own flotation. The biggest, most expensive, most narrative-driven private companies of the past decade are about to become public ones, all at once. SpaceX will set the tone for whatever follows.

T-minus twenty days until SPCX starts trading. Head or heart?

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NEWSBITEs

UK inflation fell to 2.8% in April. CPI eased to a 13-month low from 3.3% in March, as a 7% Ofgem price cap cut offset 23% motor fuel inflation from the Iran war. Starmer scrapped September's fuel duty rise, as is tradition.

UK unemployment unexpectedly climbed to 5%. Payrolled employees fell 100,000 in April, the steepest monthly drop since May 2020, while vacancies slid to a five-year low of 705,000. Hospitality and retail bore the brunt as firms froze hiring amid the Iran shock. Good news for people who hate their colleagues.

Nvidia failed to dazzle investors despite record revenue. Q1 sales hit $81.6bn, up 85% YoY, with data centre revenue surging 92% to $75.2bn. The chipmaker hiked its dividend, added $80bn to buybacks, and touted progress diversifying beyond hyperscalers—yet shares slipped 1.9% the next day. This stock picking lark is harder than it looks.

The EU finalised the text of its US trade deal. Brussels agreed to scrap tariffs on American industrial goods in exchange for a 15% ceiling on EU exports, almost a year after the Turnberry accord. Trump had threatened to lift auto tariffs from 15% to 25% if the EU stalled beyond Independence Day. Or the 4th of July, as everyone else calls it.

Washington pledged $2bn to nine quantum computing firms. The Commerce Department signed letters of intent sending $1bn to IBM's new Anderon foundry, $375m to GlobalFoundries, and $100m apiece to D-Wave, Rigetti, Quantinuum and Infleqtion. The government will take equity stakes in a push to counter China. Many of the companies saw their stock jump on the news as Uncle Sam collapsed the wave function. (A little quantum mechanics joke for you there. Can’t help myself.)