Congrats. You’re About to Unwittingly Make Elon Musk a Trillionaire.

SpaceX is IPOing next week. And there’s a good chance you’re gonna own a portion of it—whether you like it or not.

(Photo illustration by The Bulwark / Photos: Getty)

IF YOU’RE READING THIS, you might be about to help make Elon Musk the world’s first trillionaire.

If so, you’ll also be risking your retirement savings while simultaneously bailing out X and Cybertrucks.

And to top it off: You have pretty much no say in the matter.

That’s because Musk’s SpaceX is IPOing next week, and it’s getting special treatment that allows it to enter many of the major stock indices without meeting the usual requirements to do so. What that means is that if you hold an index fund—which you probably do, if you have a 401(k)—you may be forced to transfer some of your wealth to this money-losing rocket company and, by extension, its megalomaniacal CEO. And you won’t really be able to complain if he screws up.

Let’s talk through how we’re privatizing gains for Musk and socializing the costs for the rest of us.

The rocket stock

SpaceX, the space-travel-but-actually-AI company, will IPO next week at a total valuation of $1.77 trillion. That would make it the largest IPO on record. It’s being valued this high despite the fact that the company loses massive amounts of money—and when I say massive, I mean massive. It lost $4.9 billion in 2025, and almost that much in the first quarter of 2026 alone. The company’s prospectus has a lot of pretty photos of rockets, and not much to show in profits.

Of course, it’s not unheard of for a company to go public before it starts turning a profit, particularly in tech.¹ When that’s the case, though, investors often benchmark value against revenues.

But even by that alternative metric, SpaceX’s numbers are kind of insane.

The typical tech firm might trade at 5 to 10 times its revenue. An exceptionally fast-growth AI-related company (like Nvidia) may trade closer to 20 times revenue. But in the case of SpaceX, the multiple will be about 95.²

In essence, the IPO pricing assumes unprecedented, parabolic growth for SpaceX in the years ahead. Put another way, the rocket-ship company needs rocket-fueled profits for any of these numbers to make any sense.

That’s a risk for the casual investor. But it’s terrific news for Musk. He is already the world’s richest man, and now, since he owns roughly half of SpaceX stock, the enormous valuation of the IPO should, ahem, rocket him into the four-comma club.

A Russian nesting-doll of bailouts

With this IPO, Musk also gets bailed out of some of his most embarrassing failures, which he’s buried under SpaceX’s froth.

For instance, X, the social-media platform formerly known as Twitter, got shoved into SpaceX. So if you buy the shiny new spaceship company, you’re also buying a piece of Musk’s decrepit MAGA playground.

Same goes for other Musk screwups.

For example, when no one wanted to buy the ugly Cybertrucks whose wheels³ kept falling off, Musk-controlled Tesla found a willing customer in Musk-controlled SpaceX. SpaceX purchased nearly one out of every five Cybertrucks registered in the last quarter of 2025—meaning Musk booked around $100 million in Tesla revenue by selling trucks to his other companies.

The Boring Company, yet another Musk-controlled firm, is also being paid to do construction work for SpaceX.

In general, Musk has a tendency to take one business he controls and overspend to buy things from other businesses he controls. It’s kind of like a Ponzi scheme, except every subsequent customer is yet another Elon Musk company.

How is all this possible? Why are people still giving this guy money, given these crazy valuations? There are three basic answers:

1. People are genuinely excited about commercial space exploration and think SpaceX is primed to capture the market and become super-profitable someday.

2. There’s a lot of dumb money out there that can’t evaluate the merits of #1 but believes Musk is a visionary. He is, after all, the richest man in the world, so he must know what he’s doing.⁴

3. There’s a lot of captured money out there that believes neither #1 nor #2 but doesn’t have the option not to buy. These investors are being strong-armed into buying SpaceX because they own index funds that are forced to hold the stock.

Let’s focus on #3, as it probably includes most people reading this newsletter.

You’re gonna take it and you’re gonna like it

Normally there are a bunch of rules and requirements that public companies must meet before they can be included in major indices like the Nasdaq 100 and the Russell 1000.

For example, stocks typically must be publicly traded for some minimum period of time before being added to one of the major indices. Indices often also have profitability requirements—that’s why Tesla was locked out for so many years after going public—as well as requirements for things like corporate governance and liquidity.

These rules are there to protect investors and the integrity of the index, and to prevent fly-by-night companies from entering the mix.

But this time around, several of the major indices have decided to waive many of these requirements. Not only for SpaceX, to be clear, but for other “megacap” companies expected to IPO soon too (such as OpenAI and Anthropic). The result is that SpaceX’s inclusion in these indices is being fast-tracked. That will effectively force passive index funds to buy it.

Why? Because that’s how these products work.

If I have my 401(k) in, say, a Russell 1000 index fund at Vanguard, I do so knowing Vanguard will invest my money as the Russell 1000 is constructed. My stock portfolio composition will mimic, on a small scale, the composition of the index—it’s indexed to it. So when a new stock is added, the fund has to buy it, at whatever the market price may be. It doesn’t get to pick and choose stocks, or wait until the stock looks like it’s a better or more strategic deal. That’s what it means to be a passive index fund.

A whole lotta money is benchmarked to these indices. About $662 billion is indexed to the Nasdaq 100, for example. It’s true that, as of this writing, not all of the indices will be carving out an exception for SpaceX and the other tech firms: S&P Dow Jones Indices, which runs the most-used index (the S&P 500), announced on Thursday evening that it would not waive its main eligibility requirements after all, surprising markets; but given pressure from market participants, there’s some question as to how long decision will hold.

All the captured index money forced to buy, plus the dumb money worried about FOMO, are likely to reinforce each other and drive prices higher. At least in the near term, anyway. So in that near term, Musk will become a trillionaire thanks to the bending of a few rules.

It may be tempting to blame this fast-tracking on some sort of shady backroom deal—a mega favor for a megadonor made by a Trump administration regulator. But there’s no evidence that’s the case; it’s really more about the not-so-great incentives these index providers face.

The main reason they’re rushing to add SpaceX is that they’re basically competing with each other. Consider a scenario in which the Nasdaq 100 adds SpaceX right away but the Russell 1000 does not. If SpaceX goes up a lot, the Russell 1000 may look bad relative to the Nasdaq 100. Investors may decide to rotate money out of Russell 1000 funds and into Nasdaq 100 funds.

And look, you can’t escape the fact that SpaceX (and perhaps Anthropic and OpenAI) will soon be some of the largest public companies in the world. To the extent that these indices are supposed to represent the market, it would be kind of weird to leave them out.⁵

Unfortunately, all this is happening amid a confluence of other risks for regular investors, who could soon be left holding the bag.

With apologies to your 401(k)

If you’re an investor, you’re betting on Musk to deliver on this crazy-high valuation. Which is a risky bet, honestly, given everything we’ve learned about Musk in the past couple of years—including his reported drug use, his bizarre public behavior, and the times he has appeared to undergo a public psychotic break and posted through it. His stewardship of DOGE was a complete disaster.

And, unlike with DOGE, no one can fire Musk if he fails this time.

Even after the IPO, Musk will retain more than 80 percent control of SpaceX. He also chooses the majority of the board. Beyond that, there are a lot of other wild provisions in SpaceX’s governance structure, making it hard for minority shareholders to hold anyone accountable for gross mismanagement.

If Musk decides tomorrow that he’s going to disappear and take shrooms in the desert for six months, investors have basically no recourse. They cannot replace him.

They may not even be able to sue him, based on the fine print in the SpaceX prospectus. Measures banning class-action suits or requiring at least 3 percent ownership before bringing a derivative suit are clearly designed to prevent the kinds of shareholder actions that have plagued other Musk companies.

As Bloomberg columnist Matt Levine put it:

When SpaceX is public, Elon Musk still gets to run it however he wants, and he can do weird stuff, and you have to trust him, and if you don’t like it you can’t complain. This is a sensible goal for Musk in part because he clearly has been burned, or at least annoyed, by the Tesla experience, and he would like to avoid repeating it.

Some of the SpaceX measures, such as forcing shareholder litigation into arbitrations, appear to contradict what the SEC had basically told public companies about governance and accountability for decades. At least until Trump became president, anyway.

Which brings me to the last problem. Shareholders may have trouble holding Musk accountable if he goes AWOL or defrauds them, but the feds won’t even bother trying. That certainly seems to be the case given the light touch the SEC has provided thus far.

So to recap: You and I are going to be forced to buy SpaceX at what appears to be an inflated price; we have no recourse if Musk fail-whales; and our federal overseers are asleep at the switch.

Other than all that, this IPO sounds like a terrific investment opportunity.

Ramparts

— A reminder that the “oligarchy” is not always as powerful as it seems.

— The latest development in tariff-refund foot-dragging: The Trump administration now says companies must individually sue the government if they want to get back the full value of the tariffs that the Supreme Court had ruled as unconstitutional. To the extent companies worried about applying for refunds before, because they feared retaliation from a vengeful president, this seems likely to make things worse.

— President Trump just signed an order “reclassifying” about 8,000 civil servants so they are easier to fire for political reasons. This has been in the works since his first term. The civil servants I’ve spoken with who have so far been spared from the firings expressed worry that more jobs could be reclassified soon.

— Amazon shut down a contest designed to incentivize employees to use AI because employees . . . used AI to cheat in the contest.

— Finally, some good news: Big Egg stopped being greedy.

1. Amazon, for instance, took about six years post-IPO before it had a profitable full year.

2. Yes, you read that correctly.

3. Among other parts.

4. An unusually large portion of IPO shares is being made available to normie retail investors, as opposed to big clients of the investment banks handling the IPO. Usually only something like 5 to 10 percent goes to individual investors trading on platforms like Robinhood, E*Trade, or the like; this time, the target share is reportedly as high as 30 percent. This is often a red flag that the smart money doesn’t want in on the deal.

5. On the other hand, the whole point of an index fund is that it’s supposed to help diversify risk, by using a broad-based basket of stocks. And already indices like the S&P 500 are looking not so diversified. The so-called “Magnificent Seven” AI-linked stocks represented about 35 percent of the S&P 500 as of mid-May; adding these new AI-linked “megacaps,” whenever that happens, will further concentrate market risk.