by Maya Jenkins, Senior Policy Analyst
Amidst the hype dominating the news ahead of SpaceXs initial public offering (IPO) and the breathless coverage of Elon Musk’s ascension to trillionaire status following the IPO, there is also a growing chorus of market watchers — including influencers, financial analysts, and even Nobel laureates — questioning the company’s valuation and calling out the IPO’s transfer of wealth from working people to the ultra-wealthy.
‘Not Priced on Market Forces’
Between January and April of this year, SpaceX lost over $4 billion, plowing billions into xAI, the deeply unprofitable artificial intelligence business best known for generating child sexual abuse material and spewing antisemitic, racist propaganda. During that same period, Musk claimed that his company’s AI technology would soon “far exceed” that of all others. Financial research firms repeated his claims, telling audiences that Musk’s Grok – the AI chatbot that dubbed itself MechaHitler – “may soon replace millions of white collar jobs.” Similarly, in February, as SpaceX was losing money hand over fist, Musk stated that the company was shifting to prioritize the construction of a ‘self-growing city’ on the Moon within ten years. News outlets covered Musk’s pivot from Mars – which, a year ago, he’d said his Starship aimed to land on this year – to the moon as a “nearer and more achievable goal.” But when asked about the likelihood of a ‘self-growing city’ being established on the moon by 2037, even Grok reports back more honestly: it’s very very very unlikely.
This credulous reporting matters because it is one essential part of the hype machine that buoyed SpaceX stock price following the IPO. SpaceX’s valuation rose to over $2 trillion, a figure roughly 112 times its 2025 revenue, and then to $2.77 trillion less than a week later, a figure over three times the $780 billion that investment research firm Morningstar believes the company is actually worth. As one investment banker told reporters, “[t]his was not a deal that was priced on market forces.” Indeed, as of this writing, the SpaceX stock price has fallen significantly and is expected to remain volatile.
Forcing SpaceX into working peoples’ retirement accounts
The hype machine is just one of the mechanisms wealthy insiders are using to ensure the SpaceX IPO makes them even richer. In the months leading up to its IPO, SpaceX put pressure on executives at index providers to change the rules for how they include companies in their major indexes and ensure it would be included soon after its IPO. NASDAQ, FTSE Russell, and CRSP then changed their rules to fast-track SpaceX into their flagship indexes, which millions of workers’ retirement funds mirror.
Here is why this matters: fast-tracking SpaceX into the Nasdaq-100 and other major indexes all but guarantees that the retirement funds that mirror them will be forced to buy millions of likely overvalued SpaceX shares, positioning wealthy insiders to sell their long-held SpaceX stakes at market highs – and leaving everyone else exposed to the risk of excessive losses. As SpaceX officially joins major indexes, including the Nasdaq-100 as soon as July 6, the investment funds tracking those indexes – funds that working people rely on as a means of securing a dignified retirement – will face significant pressure to buy the company’s shares by the millions. As investors in funds that track these indexes, working people have little choice.
When we called NASDAQ out for fast-tracking workers’ savings into SpaceX in April, AFREF’s Natalia Renta explained that, in doing so, NASDAQ was “creating the conditions for regular investors to own potentially overvalued shares of companies before the market has had a meaningful chance to evaluate them.” By pushing index providers to fast-track its inclusion in their indexes, SpaceX is using working people’s savings into a source of upward pressure on its stock price and of ‘exit liquidity’ for insiders looking to sell long-held shares on a high. What’s more, SpaceX has locked retirement savers into absorbing massive losses should its stock price drop in value after they’ve been forced to buy it. With these mechanisms in place, SpaceX has all but guaranteed that its IPO will act as a massive transfer of wealth from working people to wealthy insiders – and of risk from those insiders to working families.
More market watchers are ringing the alarm
A growing chorus of voices are calling out the company’s inflated valuation and identifying the shifting of risk from wealthy insiders to working people, including influencers, financial analysts, labor unions, former Treasury officials, and Nobel Prize-winning economists.
Finance social media influencer – or ‘finfluencer’ – and self-described venture capitalist Jenny Stojkovic posted a series exploring the question, “is the SpaceX IPO the biggest grift in history?” Former Wall Street trader Vivian Tu – better known by the handle @YourRichBFF – gave it to her millions of followers straight: “Regular people think they’re getting access, but in reality, you are just some rich guy’s exit strategy.”
Ed Elson, a research analyst and cohost of the “Prof G Markets” podcast alongside self-described ‘centrist’ Scott Galloway, described the paperwork SpaceX filed to provide the public with the data they need to make informed investment decisions as “a trainwreck. Unserious, empty, hallucinatory, and borderline dishonest.”
Claude Cummings Jr., president of the labor union Communications Workers of America, stated following the IPO that the SpaceX valuation “is not a reflection of the company’s actual worth but of Elon Musk’s exaggerations about his AI business and corrupt capture of federal subsidies for his satellite broadband subsidiary,” and stressed that Wall Street is aiding Elon Musk by forcing the company “into the retirement and college savings plans of working Americans everywhere, whether they want to invest in SpaceX or not.”
Former U.S. Treasury official and Yale Law professor Natasha Sarin told the New York Times, “[W]hen you have these types of technological changes… they come with a bubble that eventually pops, and households are going to be massively exposed to that. And more exposed now that these companies are going public than they were a few weeks ago when all of them were private.”
Nobel-laureate Paul Krugman described Elon Musk as a ‘human Ponzi scheme,’ explaining that while “traditional Ponzi schemes only exploit investors who choose to participate,” changes made to stock market indexes like the Nasdaq-100 in advance of the SpaceX IPO make it so that, “[t]his time much of the money propping up Musk’s scam will come from ordinary Americans who have in effect been forced to buy in.”
Jared Bernstein, former Chair of the White House Council of Economic Advisors, summed the scheme up vividly, writing, “AI IPOs: How SpaceX Would Like You To Hold Their Dynamite Sticks For A While.”
The chorus warning of SpaceX’s likely overvaluation and its IPO’s all-but-certain massive transfer of wealth from workers to the one percent is growing. But, as Musk and his fellow AI executives funnel retirement savers’ assets into their overvalued companies, it will be incumbent on policymakers to step up and safeguard working families from corporate raids on their savings.