SpaceX's listing plan unlocks a $2.9 trillion 'logjam' of unlisted companies

Wall Street may witness a collective "ice-breaking" of private companies that have long avoided going public, with a total valuation of $2.9 trillion, as the floodgates appear to be opening wide.

SpaceX's initiation of IPO plans has paved the way for "centicorn" companies (privately valued at over $100 billion), but it also raises a thorny question for all stakeholders: How enthusiastically will stock market investors embrace companies whose leaders are mired in controversy, barely profitable or marginally so, and whose private market valuations far exceed those of all previously listed U.S. firms?

The answer is clear: Extremely enthusiastically.

Paul Abrahams, partner at 1789 Capital and former co-head of North American equity capital markets at Citigroup, said: "The median market cap of S&P 500 constituents is close to $40 billion, while the valuations of these companies are in an entirely different league. A company like SpaceX will undoubtedly attract a flood of institutional and retail investors—it’s a must-hold."

After hitting a record $492 billion in IPO fundraising in 2021, the U.S. IPO market has largely stagnated. Companies like SpaceX, Stripe, and ByteDance, once seen as hot IPO candidates, have achieved valuations in private funding rounds that far outstrip most public companies—all without the scrutiny of quarterly earnings reports.

On one hand, investors complain about being shut out of these red-hot private firms; on the other, investment banks lament missing out on lucrative IPO underwriting fees. If Elon Musk’s rocket giant goes public at its latest private round target valuation of $800 billion (or even the $1.5 trillion IPO valuation it’s considering), it would send a powerful signal for a wave of private companies to follow suit.

Steve Stradnicki, co-head of Americas equity capital markets at UBS, said: "For years, many believed ultra-high-valuation private companies had no need to go public—and might never do so. Now, these firms are actively signaling clear paths to listing, which is undeniably positive for the many companies and investors looking to them for leadership."

Abrahams, whose 1789 Capital is a SpaceX investor, noted that these companies are too large for M&A exits: "So 2026 will see a massive IPO wave—though we’ve been saying this for years, next year there’ll be no more excuses for delay."

Bankers believe mega-IPOs are entirely feasible with the right deal structures. However, some "centicorns" still need to justify their valuations to investors.

David Erickson, adjunct professor at Columbia Business School and former co-head of global equity capital markets at Barclays, admitted: "If the valuation logic holds, I’m not worried about the market’s capacity to absorb these IPOs. But based on what I know of OpenAI or SpaceX’s revenue and growth, if they’re really worth $1 trillion or $800 billion, I’d be deeply skeptical. Retail investors need to buy into the valuation logic to dive in."

The Spotlight Test of Public Markets

For those who believe large firms should go public—and those questioning whether such companies can withstand public scrutiny—SpaceX is the perfect case study.

To supporters, SpaceX is an innovator pushing the boundaries of space exploration: the first to achieve partial rocket reusability, the only U.S. commercial firm capable of independently sending humans to orbit, and operator of a satellite constellation providing broadband to over 8 million users globally. Its recent acquisition of EchoStar’s radio spectrum will soon enable direct-to-cell connectivity.

But going public could hinder SpaceX’s capital-intensive plans, like developing the massive Starship rocket—a fully reusable vehicle tasked with launching next-gen Starlink satellites and future crewed missions to the Moon and Mars. Musk and SpaceX would then answer to shareholders, who often prioritize short-term revenue and profits.

Carissa Christensen, founder and CEO of space research firm BryceTech, said: "SpaceX’s brand and culture are deeply rooted in its private status. It’s hard to imagine how it would adapt to the rules and scrutiny of being public."

Musk has stated SpaceX won’t IPO until achieving its ultimate goal of crewed Mars landings, a stance reiterated in 2018 by president Gwynne Shotwell, who told CNBC: "We’ll consider going public only once Mars flights are routine."

Even if the company shifts course, some investors may remain wary. A 5% stake sale at a $1.5 trillion valuation would require raising $75 billion—easily the largest IPO ever. In 2019, Saudi Aramco raised $29 billion domestically without international placement amid favorable conditions; but for a relatively young firm led by Musk (who already runs a $1.5 trillion company), matching that reception seems doubtful.

Erickson noted: "If Musk is CEO of two mega-cap public companies while running xAI, I think the market would worry."

The Return of Mega-IPOs

A mid-2026 SpaceX IPO could bridge the private-public valuation gap via blockbuster deals investors can’t afford to miss.

Rob Stowe, head of Americas equity capital markets at Barclays, put it bluntly: "Big deals create their own gravity."

Bloomberg data shows that excluding SPACs and closed-end funds, in 8 of the past 13 years, total U.S. IPO fundraising fell short of a single $50 billion+ mega-IPO.

Stowe noted that missing a sub-$500 million IPO that soars has minimal impact, but skipping a $30 or $50 billion deal that rallies creates massive performance pressure.

Yet IPOs of this scale are unprecedented—the core concern.

Colin Stewart, vice chairman of global tech M&A and capital markets at Morgan Stanley, said: "These would be landmark listings. A key challenge is ensuring market infrastructure can handle such size."

Listing Path Options

For cash-rich mega-private firms, Stewart sees direct listings—where existing shareholders sell directly on-exchange without issuing new shares—as attractive.

He said: "No filings yet, but large firms will consider it. They’re not capital-constrained, their institutional shareholder base rivals public companies’, and they only lack retail investors."

Stewart added that prolonged private status and massive funding rounds have created larger, more diverse shareholder bases than traditional IPO candidates, making direct listings more viable.

Coinbase’s 2021 direct listing remains the largest; Palantir and Roblox also went public this way during COVID-era market froth to mitigate pricing risk.

For portfolio managers sitting on billions in private assets, delivering cash returns is paramount. A January McKinsey survey of such LPs found performance has become the top metric for evaluating managers, far surpassing its importance three years ago.

This demand may ultimately push some closed firms public—but others have options. Stewart often hears: "If private markets are so great, why go public?"

His rebuttal cuts to the core: What if private funding freezes? "Every five to ten years brings a downturn, and conditions can shift overnight."

Stewart said: "Liquidity seems ample now, but no one can guarantee tomorrow. While firms occasionally let long-term investors and employees cash out, this model clearly has limits."

"At some point, selling the next batch of shares at a higher valuation becomes increasingly hard—that’s the reality. So why not go public and let the market price it?"