Investor Gary Black has expressed his reluctance to invest in SpaceX’s highly anticipated initial public offering (IPO), citing the company’s potentially inflated valuation. With a projected valuation of $1.75 trillion, Black believes that the Elon Musk-led company is overpriced.
Black Questions SpaceX’s IPO Valuation
Black, managing partner at The Future Fund LLC, stated that he is not interested in investing in SpaceX at its current valuation. He noted that the company’s expected valuation of 300 times EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) is unusually high, even for a company of SpaceX’s caliber. Black suggested that he would be more interested in investing in the company if its valuation were to decrease by 50%.
Concerns Over IPO Valuation
Black’s concerns over the IPO valuation are not unfounded. The company’s financial reports have shown both significant revenue growth and substantial losses. In 2025, SpaceX generated $18.67 billion in revenue, with an adjusted EBITDA of $6.58 billion. However, the company reported a loss of $4.28 billion in the first quarter of 2026, with its AI division accounting for $2.47 billion of the losses.
Retail Investors Cautioned
Black has also warned retail investors to exercise caution when investing in the SpaceX IPO. He advised against selling Tesla shares to invest in SpaceX, citing the likelihood of the IPO being oversubscribed. This could result in small investors receiving only a fraction of the shares they requested, leading to a less-than-ideal portfolio trade. Black also cautioned investors to approach bullish sell-side research with skepticism, as analysts often have a vested interest in promoting the IPO.
Bulls and Skeptics Split on SpaceX
Not all experts share Black’s concerns over the IPO valuation. Cathie Wood’s ARK Invest has estimated that SpaceX could reach an enterprise value of $2.5 trillion by 2030, driven by the growth of its Starlink satellite internet business and Starship’s heavy-lift launch capabilities. However, other valuation experts, such as Aswath Damodaran, have valued the company at around $1.22 trillion, roughly one-third below the expected IPO pricing.
Conclusion
The SpaceX IPO has generated significant hype and interest among investors. However, with concerns over the company’s valuation and financial reports, it is essential for investors to approach this investment opportunity with caution. As Gary Black and other experts have warned, the IPO may be overpriced, and investors should carefully consider their investment decisions before jumping into the fray.