Musk's SpaceX share sale: Four things you need to know

Next week shares go on sale in Musk's Texas-based SpaceX, a company that is planning to colonise Mars and put artificial intelligence (AI) data centres in space.

It is set to be the largest ever public sale of shares and will make SpaceX one of the US's top ten largest listed firms.

But for those who invest, what exactly will they be buying and what are the risks?

SpaceX is currently owned by Musk and other private investors.

On 12 June millions of new shares in the company will go on sale and then will start trading publicly on the stock market in what is known as an Initial Public Offering, or IPO.

The IPO aims to raise a vast amount of money - at least $75bn - and gives investors the chance to buy into a business whose activities range from space exploration and satellite communication to the social media site X and the controversial AI platform Grok.

SpaceX is separate from Musk's most well-known company, the electric car maker Tesla, although it is thought the two may end up merging next year.

Musk plans to use the extra money he is raising to expand SpaceX's current activities but also to fund new future ventures: mining asteroids, colonising Mars and putting AI data centres in space.

The sci-fi style sales prospectus says humans must avoid "the same fate as dinosaurs" and plan for an "age of abundance" based in space because the "light of consciousness" will not be tied to a single planet.

There is plenty of scepticism about the feasibility of some of these ambitions. But Musk's backers say he has beaten the doubters before.

And if the share sale goes ahead as outlined, it could make him a trillionaire.

SpaceX shares will be traded on the New York technology-focused Nasdaq market, and some of the big global investment institutions are likely to buy shares. But individuals, including in the UK, will also get a chance to buy via certain investment platforms and brokers.

There are more than 550 million shares available, which SpaceX has announced it hopes to sell at $135 (£100) each. Investors must decide if they think the shares are worth that much. And once they start trading their value could quickly rise or fall depending on whether the wider market thinks that initial price was too low or too high.

Even if you do not invest in SpaceX shares directly you may find you have an indirect financial interest if your pension or savings fund manager buys shares as part of their investment strategy, or if you have an index-tracking fund that automatically buys into the biggest firms.

SpaceX is set to be valued at around $1.75tn which would make it larger than rivals Anthropic and OpenAI, but smaller than the big tech giants such as Alphabet (Google), Apple, Microsoft and Amazon.

Teams of analysts follow the performance of companies like SpaceX and even they do not know whether the price will rise or fall once the shares start trading.

In the past Musk has weathered setbacks such as failed rocket-launches, production bottlenecks and political controversy, but the AI race especially is hugely expensive and fraught with uncertainty, raising widespread concern that share prices are already inflated and that the bubble may burst.

Last year, Space Exploration Technologies - as SpaceX is officially known - brought in $18.6bn (£13.8bn) in revenue but had a net loss of $4.9bn.

And the IPO prospectus - the document that outlines the terms of the share sale - even says the company has "a history of net losses" and "may not achieve profitability in the future".

Ruth Foxe-Blader at US venture capital firm Citrine Venture Partners thinks the number and range of SpaceX's projects mean it has many selling points.

But Michael Hewson at iForex says the "numbers defy belief" and amount to a bet on Musk's "ability to deliver" on some very big ambitions.

The SpaceX share sale is the first of three AI-related mega-listings expected this year. When Anthropic and Open AI sell their shares the same basic principle will apply: a lot of money is being invested with no guarantee of future profits to match.

When it comes to company decisions Musk will still hold more than 80% of the voting power after the share sale, only marginally less than he currently has. He will still determine who runs the company and its overall strategy.

That has raised some eyebrows, given Musk's erratic management style and his many enterprises. But paradoxically for some investors it may be his reputation that drives interest in this venture.