Your retirement savings are about to make Elon Musk a trillionaire

SpaceX is hemorrhaging money and its valuation is based on science fiction. Working Americans may be left holding the bag.

(Photo by Zamek/VIEWpress)

Since 2025, SpaceX has recorded net losses totaling $9.2 billion. The satellite and rocket company, which is controlled by Elon Musk, also holds $29 billion in debt on its balance sheet. Despite these less-than-inspiring figures, SpaceX is on the verge of what bankers project will be a record-setting initial public offering that could raise $75 billion for the company at a valuation of $1.75 trillion.

Working Americans’ retirement savings will be used to prop up SpaceX’s valuation — one largely based on science fiction fantasies concocted by a man who has frequently misled investors about his grandiose plans.

In March, Nasdaq, the exchange and market index provider, loosened its rules to ensure SpaceX could be quickly added to its index of 100 of the largest nonfinancial companies. The Nasdaq 100 previously required companies to be publicly traded for at least 3 months before inclusion in the index to limit its exposure to volatility.

But on May 1, as market hype for the looming SpaceX IPO neared a fever pitch, Nasdaq shaved that buffer period down to just 15 days. Nasdaq also eliminated its requirement that index-eligible companies maintain a minimum float ratio of 10%, meaning that at least a tenth of their shares had to be accessible on public markets.

Doing away with the 10% float ratio is a boon for SpaceX, which is expected to float less than 5% of its total market cap. The vast majority of the company’s shares, upwards of 95%, will remain in the hands of insiders, who will see the value of their equity balloon. (Companies with market capitalizations comparable to SpaceX’s target, such as Amazon, Nvidia, and Microsoft, float more than 90% of their shares.)

The listing changes adopted by the Nasdaq 100 were described as a “fast entry” exception for so-called megacaps, companies with market values in excess of $200 billion.

Any passive index fund that mirrors the Nasdaq 100 will soon be required to buy SpaceX shares — even at the inflated prices. This is known as “forced buying,” in which index-tracking funds must buy newly added stocks and offload their stakes in more seasoned companies.

In turn, working Americans whose savings are held in Nasdaq 100 index funds will be made to invest in SpaceX. The funds in question — the Invesco QQQ Trust, the Direxion NASDAQ-100 Equal Weighted Index ETF, and the Victory Nasdaq 100 Index mutual fund — are marketed as relatively safe bets that non-professional investors can trust to grow their savings.

In other words, middle and upper-middle-class people who are merely hoping to save for retirement will be on the hook if SpaceX crashes. By no choice of their own, those same people will also be made to further enrich the wealthiest man in the world. Musk, who owns 50% of SpaceX and wields approximately 85% of shareholder votes, is likely to become the world’s first trillionaire when the company goes public later this month.

That guaranteed demand will help underwrite the massive valuation. The anticipation of SpaceX quickly being added to the Nasdaq 100 index, and the forced buying it will create, will inflate the SpaceX stock price even before it is formally added.

A similar story is expected to play out for funds that mirror other indexes, including the Vanguard S&P 500 ETF and iShares Russell 1000 ETF. The respective indexes that those funds are weighted to are considering or have implemented similar rule changes to fast-track the addition of SpaceX.

Along with using a thin float to manufacture scarcity, SpaceX will lean on enthusiasm from retail investors to prop up the IPO price early on. Reuters reported in March that SpaceX is considering earmarking up to 30% of its float for retail investors, a category that refers to individual investors who trade using personal accounts rather than on behalf of an institution. (Musk has previously leaned on retail investors to bolster Tesla, as the electric vehicle maker trades at a huge multiple of its earnings, making it a risky bet for many institutional buyers.)

But passive money will play a more commanding role. Index funds will be required to allocate a slice of their vast assets to SpaceX shares, flooding the stock with forced institutional buying. That demand could further inflate SpaceX’s index weighting, and in turn, obligate trackers like Invesco QQQ to buy even more shares. This self-reinforcing loop could push the company’s stock to ever-new heights, regardless of whether SpaceX continues to lose billions of dollars.

In the event that SpaceX hits its $1.75 trillion target valuation, it would be trading at a 90.7 price-to-sales ratio. That would make it significantly more disconnected from its fundamentals than Tesla, which trades at a nearly 16-fold price-to-sales (P/S) ratio.

Why the rules are bending for SpaceX

Reuters reported in March that SpaceX had conditioned its interest in a Nasdaq 100 listing on early inclusion. After its demand was heard, SpaceX chose Nasdaq as the trading venue for its IPO.

Nasdaq, by relaxing its rules to favor SpaceX, stands to benefit financially from the arrangement: companies must pay significant listing fees to Nasdaq, while institutional investors pay execution fees for trades made on its exchange. Less clear are the identities of the people responsible for the rules that govern which companies are included in the Nasdaq 100. The corporation’s Index Oversight Committee membership list is kept hidden from the public.

S&P Dow Jones Indices is considering similar changes to rush SpaceX’s inclusion in the S&P 500, writing in May that preventing “such IPOs’ timely index inclusion” could “impact the overall index’s effectiveness as a benchmark.” (The Index Committee that oversees the S&P 500 — another group whose members are withheld from the public — actively picks which companies are listed, in contrast to the nominally passive, rules-based methodology of the Nasdaq 100.)

As of now, a company must have 12 months of public trading history and four consecutive quarters of positive earnings to be eligible for inclusion in the S&P 500, among other requirements.

SpaceX, in its initial registration form filed with the U.S. Securities and Exchange Commission, reported losses of $4.9 billion in 2025, and $4.3 billion in the first quarter of 2026 alone. A formal consultation conducted by S&P Dow Jones Indices proposed eliminating the profitability standard entirely and shortening the waiting period to six months. While an agreement has not yet been reached, any changes to the S&P 500’s listing standards are expected to take effect on June 8, four days before SpaceX plans to go public.

Listings on the S&P 500, the Nasdaq 100, and the Russell 1000 Index would dramatically increase market demand for SpaceX, given the significant number of passive funds that would be forced to buy and compete for a strategically constrained number of shares.

“The largest actionable total addressable market in human history”

SpaceX’s target valuation, $1.75 trillion, would make it more valuable than Meta, the social media and advertising giant that posted a 2025 net income of $60 billion, and Walmart, the retail giant that led all companies in annual revenue last year at $713 billion.

The perceived value of SpaceX resides not in its profitable satellite internet service, nor in its money-losing launch business, nor in its secretive work for the Pentagon. Instead, SpaceX has staked its value on a fantastical future involving its operation of one million orbital AI data centers that help fuel “enterprise applications” — or what it claims will be “the largest actionable total addressable market in human history,” worth as much as $28.5 trillion, according to the company’s prospectus.

There are also persistent problems with the vehicle SpaceX plans to use to launch its orbital data centers. Starship has yet to fly a single operational flight, and its development has proven extremely costly, explosive, and technically fraught.

SpaceX, which merged with xAI in February, does not currently operate any space-based data centers. It does operate a pair of terrestrial data centers, responsible for polluting the air of Black communities in Tennessee and Mississippi and powering a chatbot that has generated images of child sexual abuse and white supremacist talking points.

There was supposed to be an upside for prospective investors concerned by the billions of dollars that Musk burned to build those data centers, which have not been fully utilized by xAI due to lagging interest in its Grok models. In its prospectus last month, SpaceX reported that Anthropic, a leading AI firm, had agreed to rent unused computational capacity at a rate of “$1.25 billion per month through May 2029, with capacity ramping in May and June 2026 at a reduced fee… The agreement may be terminated by either party upon 90 days’ notice.”

Musk muddied that picture in a short post on X last week, insisting that SpaceX had “not committed to leasing Colossus for years.” He then downplayed the deal with Anthropic, calling it a “180 day lease with 90 day notice mutual cancellation thereafter.”

“Either Musk is correct and the S-1 is materially misleading, or the S-1 is correct and Elon is up to his old hijinx,” Columbia Law School professor Eric Talley told CNBC. “But more than that it’s confusing to investors who are trying (best they can) to put a valuation on SpaceX.”