SpaceX – Are you about to own it (by doing nothing)?
SPaceX:You’re About to Own It – Without Even Trying
You’re About to Own SpaceX (And Nobody Asked You)
There is a good chance that, by the end of next week, you will own a piece of SpaceX. And here is the odd part – you will not have chosen to.You will not have logged in. You will not have placed a trade. You will not have read a single page of the prospectus. And yet, if you hold a tracker, a workplace pension, or one of those nice tidy global index funds, the fund machinery may quietly buy it on your behalf.
So I am not going to tell you whether to buy SpaceX. As you will know if you have been around here a while, that is not how we do things. We are DIY-Investors. We do our own research. What I want to do instead is show you three things the headlines are getting wrong, and then tell you honestly what I am doing in my own portfolios. The “we”, as usual, being me and my AI research assistant Cedric, who has spent a fair bit of this week reading the documents most people will only ever read the headline about.
A quick note on dates, because the timing matters. On the filings as they stand, pricing is expected around 11th June, with the first trade on 12th June 2026.
1. The misconception worth fixing
Let me start with the line you have probably seen a dozen times this week: “Do not worry, the S and P 500 will not be buying SpaceX.” It has been repeated everywhere, usually with great confidence.
And it is true. Sort of. Which is the most dangerous kind of true.
Here is what actually happened. On 4th June, S and P Dow Jones Indices published the results of a consultation. Two things came out of it, and almost everyone has reported the first and missed the second.
The first thing. For the headline indices – the S and P 500, the MidCap 400 and the SmallCap 600 – nothing changed. To get into the S and P 500 you still have to be profitable on a GAAP basis. SpaceX is not. At the time of writing it lost somewhere in the region of 4.9 billion dollars last year. So it is excluded at IPO, and on the rules as they stand the earliest it could even be considered is around the middle of 2027, and only then if it has turned a profit. So far, so reassuring.
But here is the second thing, buried in the very same announcement. For the broad, total-market indices – the sort that sit quietly inside a great many trackers – S and P introduced a new fast-track route of roughly five business days, taking effect on 8th June. So if you own a total US market fund – the iShares ITOT is a very common one – that fund can pick up SpaceX almost immediately. Not in 2027. Within days of it listing.
And it is not just S and P. The Nasdaq 100 route is roughly fifteen trading days; FTSE Russell relaxed their rules too, around five. So the comforting headline, “the index funds will not touch it”, is only true of one specific index. For a great many other funds that millions of people hold without thinking about it, the honest answer is – quite possibly, and quite soon.
That, in a nutshell, is the difference between reading a headline and reading the document. And it is rather the whole reason this channel exists.
2. The valuation reality
Now to the number that makes everybody raise their eyebrows. The talk is of SpaceX coming to market at something close to 1.7 trillion dollars.
I want to be fair here, because SpaceX is a genuinely remarkable company. Starlink is a real business with real revenue. The engineering is extraordinary, and I am not in the business of sneering at it. But – we are not buying the rockets. We are buying the shares. And the price of the shares is a separate question from the brilliance of the engineering. Keeping those two things apart is, as far as I am concerned, the most important part of being a DIY-Investor.
So here are the facts as I read them. On its own SEC filing the company lost around 4.9 billion dollars last year. And the independent view does not match the headline price either: Morningstar, who are nobody’s idea of a wild bunch, put a fair value on it of somewhere around 780 billion dollars.
I cannot tell you which of those is right – nobody can, with any certainty. But when the asking price is more than double an independent fair value estimate, and the company is losing the thick end of five billion dollars a year, that is not a reason to panic. It is very much a reason to slow down. The enthusiasm is being priced in years, possibly decades, ahead of the cash.
There is an old distinction I keep coming back to. There is the cathedral – the slow, productive business of actually building something that generates cash over time. And there is the casino – buying a thing today because you are confident someone will pay more for it tomorrow. A SpaceX at this price is being sold as a cathedral. A lot of people will buy it as a casino chip. Just be honest with yourself about which one you are doing.
3. Where is the money actually going?
This is the one I find most interesting, because it is where the headlines and the documents part company most sharply.
You may have seen a striking figure doing the rounds, from a forensic research outfit called New Constructs: that something like 62.8 billion dollars, around 78 percent of the whole raise, is just cashing out insiders rather than going into the business. It is a brilliant headline, designed to grab eyeballs and (possibly) make you cross. But when Cedric and I sat down with the actual prospectus, it turned out to be a number stitched together from three quite different things.
The Use of Proceeds section gives you a total – about 74.4 billion dollars of net proceeds – but, tellingly, no split. The filing itself says management “will have significant flexibility in applying the net proceeds.” In other words, trust us, we will work it out as we go.
And here is the part that gives me pause. The one firm, legally committed use of the money does not appear on the Use of Proceeds page at all. You have to go digging to find a covenant requiring roughly 20 billion dollars – about a quarter of the raise – to repay something called the SpaceX Bridge Loan within six months. Trace that loan back, and it financed a clean-up of debt connected to X and to xAI, Musk’s other companies. Not illegal, not even unusual. But exactly the sort of thing you only ever find if you do your own research.
There is a second, separate 20 billion dollar arrangement too – equipment leases for AI hardware, financed by Valor Equity Partners, whose founder Antonio Gracias sits on the SpaceX board as lead independent director. In fairness, dig into the accounts and these are structured as financing, not a giveaway – a director’s firm acting as a lender to the business, properly disclosed. But it is still a director on both sides of a 20 billion dollar arrangement that the company guarantees, and the filing does not tell you whether the terms are genuinely arm’s length. Worth understanding before you part with a penny.
So, the honest version. Is some of your money repaying old debt rather than building rockets? Yes – about a quarter of it, on the company’s own covenant, and some of that traces back to Musk’s other ventures. Is it 78 percent secretly cashing out insiders? No. The truth is less dramatic than the headline, and a good deal more useful, because it tells you exactly what you are buying into.
4. So what do I actually do?
Not “is it good” or “is it bad”, but what does a sensible DIY-Investor actually do about it. I will give you four tiers, and you decide where you sit – because we are all at different stages of life, with different objectives, circumstances and risk tolerance. Any idea that there is one right answer for everybody is, as far as I am concerned, just plain daft.
1. Avoid it at the IPO. For most people, most of the time, this is the right answer. There is no prize for being early, and the first few weeks of a hyped mega-IPO are about sentiment and lock-ups, not value. Sitting it out is a perfectly respectable position – often the smartest one.
2. At most, a tiny speculative sliver. If you genuinely want a piece of the story, keep it to the sort of money that, if it halved, would annoy you but would not change your life. Treat it as the casino chip it is. Size it so that being wrong is survivable.
3. No leverage. None. Do not borrow to buy this, and do not let a broker tempt you into spread bets, CFDs or margin on a loss-making company priced at more than double its independent fair value. Leverage turns a survivable mistake into an unsurvivable one, and this is exactly the kind of stock where that happens.
4. Know your passive exposure. This one applies to everybody, even those in tier one. Go and look at what you actually hold. If you own a total US market fund or a global tracker, accept that you may end up holding SpaceX through the back door, whether you wanted to or not. For a tiny weight in a broad fund, that is probably fine. But the decision should be yours, made with your eyes open, not made for you by an index committee you have never met.
That is the framework. Avoid at IPO. At most a tiny sliver. No leverage. And know your passive exposure. It is not exciting, and it will not get me a million views with a thumbnail of a rocket and a screaming red arrow. But it is honest, and it is the approach I am actually following myself.
So, what am I doing? At the time of writing, I am not buying SpaceX at the IPO. I will watch it, I will read the first set of results when they come, and I will keep an eye on how the listing affects the global tracker funds. If my view changes, I will tell you, and I will tell you why – same as always.
The full forensic walk-through, with page references, the exact covenant wording, the Valor and EchoStar detail, and what it all means for the quality of this raise – is written up as a primary-source breakdown for Inner Circle members over at diy-investors.com. If that read-the-document-yourself work is what you want from your investing, that is where to find it.
As ever – get the facts, ignore the noise, and make your own mind up.
Risk Warning: Investing involves significant risks, including the potential loss of your entire investment. The value of investments can fluctuate, and past performance is not indicative of future results. This report does not constitute financial advice; you should carefully assess your financial situation, risk tolerance, and investment objectives before making decisions. Always conduct your own research (DYOR) and consult an independent financial advisor if necessary. This report is produced for informational purposes only and does not constitute a recommendation to buy, sell, or hold any securities.
Mick (8th June 2026)