SpaceX, IPOs and Other Pipedreams
Blain’s Morning Porridge 14th Jan 2026: SpaceX, IPOs and Other Pipedreams
“If something is important enough, you should try even if the probable outcome is failure.”
This year is shaping up to be a big one for IPOs, but just how sustainable will the market be if the speculative froth driving valuations dissipates? SpaceX will be the big one – it is a truly extraordinary firm, but after the noise, what’s it really worth?
According to my stock picking buddies the market highlight of 2026 will be the SpaceX IPO. They expect it will literally go stratospheric! Me? I’m excited – I was a child of the space race – but I’m also shaking my head in disbelief – such is the curse of a bond mentality in the froth of an equity-fixated world…
One of the more curious stories in markets at present is how Baillie Gifford, the Edinburgh based investment firm, sold 35% of a stake in SpaceX last year from one of its funds. (It was a position held by the Edinburgh Worldwide Investment Trust (“EWI”) – just one of its’ funds holding the rocket firm.)
SpaceX is the world’s most valuable private company and announced the intention to IPO last December. Investment banks are currently in full competitive smarm mode for the deal mandate – which may explain the gushing buy recommendations on any and all Musk related investments. The guessing on the street is that SpaceX will achieve a valuation between $800 bln – $1.5 trillion, a stunning success that will likely confirm Elon Musk as the first US$ Trillionaire.
The Baille Gifford decision to sell down was apparently made in May to return capital to investors after other parts of the portfolio had been…. less spectacularly frothy. The sales didn’t happen till a regular SpaceX liquidity window in October – which came shortly before a successful(ish) test flight and the announcement of the IPO.
Saba Capital, owned by billionaire investor Boaz Weinstein is now threatening to sue EWI for selling the shares too early, ahead of what sounds the biggest IPO ever, causing a loss of prospective gains for shareholder, and alleges the real reasons for the sale were not transparent (and related to an interfund merger within the group). Saba holds a very significant chunk of EWI. Boaz wants to replace the board and replace non-exec, with his own crew (naturally), raising failures of corporate governance.
I’m fascinated by the case. Boaz Weinstein is a successful and interesting investor. Baillie Gifford equally so – and have a chunk of my own money under their management. However, I’ve been reckoning trouble was heading their way ever since the firm built a glistening new corporate building – it an immutable law of finance a hubristic new HQ leads to crisis.
I’m equally fascinated by SpaceX. As Tesla did for electric vehicles, Musk’s dreams of conquering space has created a revolution, inventing whole new market segments for the potential monetization of space – which SpaceX currently owns. What SpaceX has done is incredible – ripping up the ponderous NASA model by failing fast and launch thousands of reusable missions. Musk pulled a critical trick – he saw how Starlink, a constellation of LEO satellites allowing the whole world easy access to go online, would demonstrate just how valuable and remunerative space may be.
I’m beginning to think SpaceX is a very different proposition to Tesla. Its success is largely due to Gwynne Shotwell, the COO, focusing on the effective delivery of Musk’s vision and concepts by keeping him out of the day-to-day running of the firm. He dreams. She solves. That’s a much more sustainable route forward than a distracted, manic CEO running umpteen different businesses, while upsetting political apple carts!
This year is shaping up for a bumper harvest of IPOs after series of fairly lean years. Another rule of finance is low interest rates support speculative investments, such as IPOs of unprofitable firms – fuelled by cheap liquidity. Many private equity managers have been discouraged by how slowly portfolio companies have moved in recent years and therefore see improved outlooks for new deals this year as the Fed and other central banks ease.
There are a slew of big deals in prospect for 2026; OpenAI, Anthropic, Databricks and others, while Freddie and Fannie Mae are said to be on the launch stocks. It’s shaping up to be a Stagging frenzy… (For anyone too young, Stags were buyers then swift sellers of new deals…)
However, I’m a sceptic. It’s wise to remember Blain’s Market Mantra No 1: The Market has but one objective – to inflict the maximum amount of pain on the maximum number of participants. I’m concerned the juice of cheap liquidity could vanish from the market on inflation, or actions like Trump’s assault on the Fed’s Independence. I also wonder about a stream of AI deals at lofty tech valuations coming to market just as AI mania peaks, triggering a natural top and sell signal for the market.
Even if AI pops, SpaceX will remain interesting.
Let me give Elon Musk credit for Tesla (which he acquired with the fruits of his PayPal investment) spawned the EV market. Tesla dominated its invention, innovation and adoption phases – and even I now have an EV (PHEV). But Tesla is no longer the market leader. Other firms played catch up and are now offering new EVs that exceed and surpass the current jaded and tired range of Tesla options in a diversified and highly competitive market.
I really can’t understand why Telsa shareholders haven’t punished Musk for leading the swiftest rise of a firm ever in the Auto sector (by reinventing it) and then letting it’s lead collapse, distracted by other issues and sidebars. Tesla is selling less cars today. It looks like he simply lost interest in further innovating and leading the sector – focused on his multiple other interests.
It hasn’t helped that Musk effectively sold a green dream machine to liberals and then switched them off when he embraced the darker edges of MAGA right wing politics. Yet, such is the strength of hype around Musk, Tesla now stands at a record valuation fuelled by expectations he will successfully pivot the firm into robotaxis, AI and robotics. In these areas Musk has no moat – he will be competing head-to-head with equally advanced competitors – especially the Chinese. When Telsa took off, he had nearly a decade of “moat” to defend the company with. Now it’s gone – although it’s still priced into the stock valuation.
How different is SpaceX? One key issue is that Gwynne Shotwell runs it. SpaceX can throw cargos into Earth Orbit at a fraction of the cost of anyone else, but it essentially its reimagined and improved rocket tech that’s cheap because its recyclable. It hasn’t actually innovated a completely new way of getting into orbit or space flight – that is still to come, and when it does, it will make all current tech obsolete. But SpaceX has successfully slashed the price of cargo into space from $6000 per Kg to less than $100 Kg making more things possible.
The genius moment was Starlink – which has grown from zero subscribers to 9 million in 3 years. The market is terribly, terribly excited – looking at a potential total addressable market of some 3 billion individuals who could potentially use it! Soon they will be able to access it from their phones (via earth-bound masts!) If we assume SpaceX makes a $100 per client from 3 billion people, that’s potentially worth about double current global GDP.
Of course it won’t. Starlink will be competing with other nets – landlines, fibre, towers, and from governments wanting to control and surveil their populations – hence China and others are now launching their own constellations.
There is no doubt Starlink is way, way cool, but when I’m sailing near to coasts its easy and fast to use a Vodaphone dongle, and I do most of my Navigation on my iPhone these days… (I can probably still use a Sextant if I was pushed!)
There will be competition. Netflix has grown its subscriber base from zero to 270 million over 15 years. It’s cheap and ubiquitous – but it’s part of an already mature market which is proving extremely competitive.
What’s Starlink’s real value? There are probably less than 20 million rural Americans without online access by other methods. As Iran is showing, no autocrat is going to let Starlink anywhere near its populace! Even democracies will be increasingly suspicious of US controlled access these days. Let’s be generous. Let’s assume Musk generates 200 million global users in 5 years’ time at $100 at a 20 times valuation… $400 bln at a pinch? If I was Musk, I’d be thinking of splitting SpaceX off at the earliest opportunity to maximise its value and then using the recurring revenues from putting its satellites into orbit to fund the Rocket business.
Which begs the question what other revenues SpaceX will bring to the table. What will being able to put “stuff” into orbit and eventually towards the Moon and Mars actually generate? That’s again a potentially valuable business. Today, SpaceX is practically the only option to launch or create a competing constellation to Starlink – unless of course you are a foreign government who sees LEO access as a strategic imperative. As geopolitical tensions escalate and threats move from cold to hot, Earth Orbit will become a battlespace.
Short-term, SpaceX is shaping up to be the defining moment of the year – which I why I think it may be delayed to accelerate and increase the hype! But.. long term? Nothing lasts forever.. at some point other firms will again catch up, compete and surpass SpaceX – assuming Trump’s successors haven’t nationalised it!
Archaeologists get very excited about moats – digging out all the stuff that made them all so ineffective in the long-run.
Out of time and back to the day job…
Bill Blain
CEO – Windshift Capital
Author – The Morning Porridge
Partner – Shard Capital
Special Advisor – Spitfire Strategic Capital