The SpaceX IPO Grift Explained
Talk about unethical.
The SpaceX IPO is looking less and less like a galaxy-brained business decision and more like a carefully engineered way to give the billionaire SpaceX insiders an exit strategy and to make the scorching-hot potato that is SpaceX stock everyone else’s problem. The notion that this looks like a pump-and-dump scheme to scam the world of their retirement funds is now so widely recognised that it has become a meme. But how does this painfully obvious IPO grift actually work? Well, let’s go through it step by step.
I am not the first to talk about this topic. A More Perfect Union and Patrick Boyle have some great videos diving into the SpaceX IPO, and I highly recommend giving both a watch.
The Pump
All pump-and-dump schemes have two phases, hence the name. First, the price is artificially boosted, or pumped, way beyond its actual value. Then the insiders sell, or dump, at the peak, pulling the rug out from under everyone else, who are left holding the bag when the price comes crashing down. Thanks to the torrent of Crypto and NFT grifts over the past few years, most people are now fairly familiar with how this scheme plays out, how wealthy it can make the perpetrators, and how catastrophic the losses can be for the victims.
So, where is the alleged pump in the SpaceX IPO?
Well, how do you artificially raise the price of anything? Simple. Restrict the supply and coerce demand, and Musk is openly doing both.
Let’s start with supply. Most companies float between 10% and 30% of their shares in an IPO. Larger, more mature companies like SpaceX almost always aim for the higher end of that range. When you consider the colossal amount of capital SpaceX will require in the coming years just to remain functional (with more on that in a minute), it would make sense for SpaceX to offer more than 30%. But no, SpaceX is offering less than 5% of its stock.
This insane construction will create artificial scarcity, particularly when you take into account the company and the IPO’s publicity, and seriously jack up the price. This is the Beanie Baby approach to pricing.
But what about demand? Well, Musk has a way of jacking that up too.
In a normal IPO, 90% of the shares are allocated to institutional investors, such as banks and insurance funds, and 10% are allocated to retail investors, reflecting market demand. SpaceX has instead opted for a 70/30 split, allocating three times the typical amount of shares to retail investors! This strongly suggests that professional investors have seen the artificial scarcity tactics and don’t want to buy at that inflated price. So, despite offering an extremely constrained number of shares, SpaceX has to sell its wares to individual investors who are less likely to spot the ruse.
Musk has been hyping up SpaceX for years to his cult of brain-dead investors. Therefore, this split ratio also suggests they expect demand from those who swallow Musk’s constant lies and manipulations to be substantial
These factors alone are enough to jack the price up to insane levels. SpaceX targeted an IPO price of $1.75 trillion, then raised it to $2 trillion, and later lowered it to $1.8 trillion.
But I don’t think people realise the true extent of that estimate.IPOs are typically valued using a revenue multiple, where the overall value of the business is a multiple of its annual revenue, with the multiple being higher if the business is considered to have more growth potential. Most IPOs have a revenue multiple of around six, and famously, Facebook’s IPO was astonishingly high at around 11. Now, SpaceX generated $18.7 billion in revenue in 2025(including X and xAI, which recently merged). That means that it is targeting a revenue multiple of 96!
Even if you believe all of SpaceX’s BS (again, with more on that in a second), that is a totally fanciful and unjustifiable valuation.
Fortunately, Musk has found a way to push it even further and pull practically all of us into his grift.
