In SpaceX's IPO, Elon Musk is a risk factor

The rocket company indicates it is 'highly dependent' on Musk's leadership, and notes that his other enterprises might serve as competitors.

by Andrew J. Hawkins

May 21, 2026, 3:42 AM UTC

The SpaceX IPO is here, serving not only as a landmark public offering that could position Elon Musk as the world's first trillionaire, but also revealing the intricate interplay among Musk's various business ventures, which often involve complex financial arrangements that are challenging to track.

This interplay is clear in numerous respects, both apparent and subtle. A search for "Tesla" in the filing yields 87 instances, while xAI appears 356 times and X 267 times. The Boring Company is referenced seven times, and Neuralink is mentioned three times. Across its 330 pages detailing rocket launches and ambitions for interplanetary exploration, one can discern the interconnected relationships among Musk's businesses.

The filing also highlights the ownership structures involving Musk's companies, with Tesla holding nearly 19 million shares of SpaceX's Class A common stock, constituting less than 1 percent of the total outstanding shares. Additionally, Tesla's equity stake in xAI was recently converted to shares in SpaceX following a merger between Musk's AI venture and his space enterprise in February.

Moreover, the IPO discloses that SpaceX acquired $131 million worth of Cybertrucks "at manufacturer's suggested retail price from Tesla." A report by Bloomberg earlier in the year suggested that SpaceX purchased 1,279 Cybertrucks in the fourth quarter of 2025; however, the IPO documentation indicates that this figure is likely higher. Absent these purchases, registration numbers for the Cybertruck may have declined relative to the prior year.

Tesla's Megapacks, which are large stationary storage batteries, are utilized to stabilize SpaceX's Colossus I and II data centers in Memphis, TN, during periods of peak demand. Between 2024 and 2025, the rocket company acquired $697 million worth of Megapacks from Tesla.

In comparison, SpaceX's interactions with Musk's Boring Company are more straightforward. The tunneling firm has paid approximately $1.2 million in office lease expenses to SpaceX, while SpaceX allocated around $1 million for the Boring Company to excavate a tunnel at its headquarters in Bastrop, Texas.

Earlier this year, SpaceX was valued at $1.25 trillion after its merger with xAI, which also has ownership stakes in X, the platform formerly known as Twitter. This merger implies that investors are committing to a historically elevated valuation; however, the consolidation has come at a substantial cost to Musk personally and to SpaceX. The filing indicates that approximately 60 percent of SpaceX's capital expenditures in 2025 were directed towards xAI, totaling around $20 billion. Yet, xAI incurred significant financial losses last year, even as its revenue increased by only 22 percent year over year.

For SpaceX, the biggest risk is also the biggest asset: Elon Musk

In the process of going public, companies are obligated to disclose their risk factors, ensuring that potential investors are fully informed before making financial commitments. For SpaceX, the most significant risk also represents its most substantial asset: Elon Musk.

While it is typical for complex companies like SpaceX to detail various risk factors in an S-1 filing, the inclusion of the CEO himself as a risk factor is particularly noteworthy. The filing explicitly states that SpaceX is "highly dependent on the continued services of Mr. Musk," emphasizing that his leadership, vision, and technical knowledge are vital for the company's success.

Similar to other companies under Musk's ownership, SpaceX recognizes that Musk's attention may not always be singularly focused on the rocket company. The acknowledgment of potential conflicts arising from Musk's multiple and intersecting business interests is significant. The filing notes that Musk is not "restricted" from engaging in activities that might compete with SpaceX or any of his other ventures.

Conflicts of interest could arise in the future between us, on the one hand, and Mr. Musk and entities owned by or affiliated with him, on the other hand, concerning among other things, business transactions, potential competitive business activities or other opportunities…. Furthermore, Mr. Musk and other businesses owned by or affiliated with him may now, or in the future, directly or indirectly, compete with us for investment or business opportunities.

The S-1 elaborates on how Musk's myriad entanglements could potentially lead to financial detriment for SpaceX. While the company relies heavily on his leadership, it simultaneously faces the danger of incurring substantial losses as a result of that very reliance.

For instance, Mr. Musk currently serves as Technoking and Chief Executive Officer of Tesla and is involved in other emerging technology ventures, including Neuralink and The Boring Company. Any such loss or reduced involvement in our business could result in a material adverse effect on our business, financial condition, results of operations, and future prospects.

The concurrent tension between risk and reward is a recurring theme throughout the S-1 documentation.

We, Mr. Musk, and other companies Mr. Musk is affiliated with frequently receive an immense amount of media attention. The actions and statements of Mr. Musk and his affiliated ventures, whether or not directly relating to us, may draw significant public attention and scrutiny to us, and could potentially have a positive or negative impact on our business, relationships with customers and regulators, or stock price.

Such assertions are not commonplace in standard S-1 filings; however, SpaceX is far from a typical IPO. Musk stands to gain billions should SpaceX realize its goal of establishing a "permanent" colony on Mars with "at least" a million inhabitants. Conversely, he also poses a potential risk that could severely affect SpaceX's reputation. Musk's enterprises operate in tandem and are deeply interconnected, as demonstrated by the filing. They engage in transactions with one another and may even be in competition for essential resources like RAM, AI chips, and other increasingly scarce commodities.

Periodic pushback from shareholders also surfaces. In 2024, several Tesla shareholders initiated a lawsuit against Musk, alleging that he was knowingly diverting talent and resources away from Tesla in favor of xAI. This lawsuit remains unresolved.