SpaceX is going public with a valuation of more than $1 trillion. Investor appetite is heavy for the Elon Musk-led space company with questions on just how much the company could be worth in future years as a leader in the space sector. A poll of Benzinga viewers asks how much the company will be worth in 10 years.
SpaceX Valuation in 10 Years
SpaceX is likely to go public at a valuation of $1.75 trillion in what is expected to be the biggest IPO ever and create one of the most valuable companies in the world.
With high demand for the IPO, some investors will try and sell shares for a profit shortly after the offering, while others may choose to hold the stock for the long term, betting on more growth for the space company and sector.
SpaceX investor and Baron Capital founder Ron Baron has high hopes for SpaceX in the future, with the company being his fund's largest holding.
Baron Capital's $1.7 billion invested in SpaceX is now worth more than $15 billion.
"This is going to become the largest company on the planet," Baron said during a recent interview with CNBC.
Baron said the company may IPO at a valuation of $1.5 trillion or $1.75 trillion, but ultimately it won’t matter.
“I think the company over the next 10 or 15 years is going to be worth $10 trillion, $20 trillion, $30 trillion, and I could be very low.”
Musk recently said "Ron is smart" when possibly agreeing with the $30 trillion valuation.
Currently, the most valuable company in the world is Nvidia, with a market cap of $4.97 trillion.
Baron didn't put a timetable on how long it could take SpaceX to reach a valuation of $10 trillion or more, but Benzinga viewers don't see it happening in the next 10 years.
"The year is 2036. 10 years from now the valuation of SpaceX fits in which of the following ranges?" Benzinga asked viewers of the "PreMarket Playbook" show on Tuesday, June 9. Here are the results:
- $2 trillion to $5 trillion: 36%
- Less than $2 trillion: 25%
- $5.01 trillion to $10 trillion: 23%
- More than $10.01 trillion: 16%
"PreMarket Playbook" airs on YouTube Monday through Friday at 8 a.m. ET. The show is hosted by Ryan Faloona.
The latest poll of the Benzinga viewers found that 61% of the audience sees SpaceX valued at $5 trillion or less over the next 10 years. Only 16% see SpaceX valued above $10 trillion in 2036, which doesn’t align with the latest comments from Baron.
This could be bad news for Musk and his future wealth. While SpaceX represents a large portion of Musk's wealth and could help make him a trillionaire this year, the company also has a bonus package that rewards the CEO based on several factors.
Among the items are market capitalization, having one million humans on Mars, data centers in space and more. To unlock the full value of the bonuses, Musk would have to take SpaceX to a valuation of $7.5 trillion. A majority of Benzinga readers don't see that happening anytime soon.
SpaceX Valuation Matters
While reports say the SpaceX IPO is oversubscribed, some investors remain cautious based on valuation.
Benzinga previously asked viewers of "PreMarket Playbook" about the valuation of the space company at IPO.
“What is the highest valuation you would buy SpaceX shares at during the IPO or first few days of trading?” Benzinga asked.
The results are:
- $1.75 trillion: 19%
- $2 trillion: 19%
- $2.25 trillion: 13%
- Not buying above $1.75 trillion: 49%
The poll found that a $1.75 trillion valuation may be the sweet spot for the IPO pricing. Nearly half of Benzinga viewers said they would not buy SpaceX shares above a $1.75 trillion valuation at IPO or in the first few trading days.
Of the three price ranges, 19% said they would buy shares if SpaceX’s highest valuation was $2 trillion, and 19% said they would buy shares if SpaceX’s highest valuation was $1.75 trillion.
Investors were less enthused with a potential valuation of $2.25 trillion, with only 13% of viewers saying they would buy shares at this price.
Taking the polls together, Benzinga viewers are not willing to value SpaceX at more than $2 trillion to buy into the IPO and the majority don't see the company worth more than $5 trillion over the next 10 years.
Image via Shutterstock
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