Economist Robert Reich has criticized the upcoming initial public offering (IPO) of Elon Musk-led SpaceX, scheduled for Friday, calling it a potential Ponzi scheme. In a post on X on Thursday, Reich argued that the IPO forces public investment regardless of individual choice. The economist drew parallels between the SpaceX offering and the short-lived Department of Government Efficiency (DOGE), suggesting both rely heavily on Musk's influence.

Reich highlighted the valuation of SpaceX, noting that Musk is offering stock at roughly 100 times the company's total revenue in 2025. The commercial space flight company reported $18.7 billion in revenue last year. Reich described the pricing as a "ballsy" move and pointed to the inherently speculative nature of SpaceX's goals, such as interplanetary inhabitation and interstellar travel. He characterized the IPO as "nothing more than a show of faith in Musk."

Governance structure also drew sharp criticism from Reich. He noted that Musk's Class-B shares will carry 10 times the voting power of shares offered to the public, effectively limiting shareholder voice. He expressed concern that Americans with savings in index funds would automatically have their retirement savings and pensions tied to SpaceX's market value. Reich stated that the closer one looks at the IPO, the more it resembles Musk's DOGE initiative, depending on the will of a single individual.

The criticism extends beyond Reich, as Senator Elizabeth Warren has called for delaying the IPO. The Massachusetts Senator warned of potentially misleading or inaccurate accounting of valuation ahead of the public offering. The scrutiny comes as the company prepares for its blockbuster market debut.

Key Valuation and Governance Details

Reich's comments underscore the growing debate surrounding the financial and governance structures of high-profile technology IPOs. As the listing date approaches, investor focus remains on the sustainability of the valuation and the long-term viability of SpaceX's ambitious projects.

GLJ Research analyst Gordon Johnson on Thursday stated that the Iranian government's decision to add Elon Musk-led SpaceX to its target list is a strategic move for Tehran. Johnson argued that targeting SpaceX infrastructure is smart because the stock market rising is the primary concern for US politicians. The assessment follows a report by Iran's Fars news agency indicating that Iran has added SpaceX shareholders' infrastructure to its target list.

SpaceX assets located in the region include Starlink ground stations in Israel, Qatar, Jordan, the United Arab Emirates, and Oman. The specific infrastructure targeted by Iran includes these ground stations and assets linked to SpaceX shareholders. The report from Fars news agency on Thursday detailed the inclusion of these assets in Iran's list of targets.

Analyst Coverage and Valuation

Investment bank Oppenheimer Holdings Inc. initiated the first-ever coverage of SpaceX's stock, setting a price target of $190. This target represents an upside of nearly 41% from the company's IPO offering price of $135 per share. In its investor note, Oppenheimer described SpaceX as the only vertically-integrated AI company with the necessary capital, data, LLMs, hardware, manufacturing, and engineering talent.

Meanwhile, investor Gary Black of The Future Fund LLC predicted that the Friday IPO would lead Tesla Inc. shareholders to exit their positions in the electric vehicle giant to participate in the SpaceX offering. Black expressed caution regarding SpaceX's valuation, calling the company "richly valued" in a post on X. He stated he would avoid the IPO and wait for the stock value to stabilize.

Elon Musk's Net Worth

As the IPO approaches, SpaceX and Tesla CEO Elon Musk is on track to become a trillionaire. The SpaceX IPO has boosted his estimated net worth to approximately $971 billion, leaving him $29 billion shy of the $1 trillion milestone. Musk's holdings in SpaceX are now valued at about $688 billion, contributing significantly to his overall wealth.