Elon Musk: From the record IPO to the mammoth $20 billion bond – Is it becoming a systemic risk for Wall Street?

Just a few days after completing the largest initial public offering (IPO) ever conducted globally, Elon Musk's SpaceX is preparing to return to the capital markets, this time seeking financing through a bond issuance. The company is scheduling meetings with investors as early as next week, aiming for an investment grade bond issuance totaling at least $20 billion. The timing is particularly interesting. On June 12, SpaceX priced its shares at $135, raising $75 billion and shattering every previous IPO record. This amount is nearly triple the $25.6 billion raised by Saudi Aramco in 2019, the previous record holder.

A valuation of over $2 trillion and the first trillionaire

SpaceX's stock market debut temporarily pushed its valuation above $2 trillion, up from the initial valuation of approximately $1.75 trillion. Simultaneously, Elon Musk became the first person in history with a personal net worth exceeding the one-trillion-dollar mark. However, less than a week after the successful IPO, the company is returning to the markets not to raise equity, but through debt financing.

The true purpose of the new bond

Despite the impressive size of the issuance, its primary purpose is not to finance new investments but to refinance existing debt. The funds raised are intended primarily for the repayment of a $20 billion bridge loan, which matures in September 2027. This specific loan represents the bulk of SpaceX's long-term liabilities, which amounted to $29.1 billion as of March 31, according to data released during the company's IPO. The bridge loan was organized by the same banks expected to underwrite the new issuance: Bank of America, Citigroup, JPMorgan Chase, Goldman Sachs, and Morgan Stanley. Obtaining investment-grade ratings from three major rating agencies is expected to allow the company to borrow at a significantly lower cost.

The major challenge of artificial intelligence

Beyond refinancing, the new issuance highlights the true scale of funds required for SpaceX's ambitious investments in the field of artificial intelligence. The company is investing massively in data centers, energy infrastructure, and high-performance computing equipment, alongside its rocket and satellite operations. This is a sector that currently remains loss-making.

Increasing losses despite explosive growth

During the first quarter of 2026, SpaceX recorded a net loss of $4.28 billion, with revenue of $4.69 billion. A year earlier, losses stood at $528 million, reflecting the intensity of the investments the company is making. Management is betting that current expenditures will pay off in the future through projects such as: the programming platform Cursor, the Colossus data centers, and the new generation Starlink V3 satellites.

Optimistic forecasts by analysts

Following the announcement of the upcoming bond issuance, Oppenheimer analyst Tim Horan revised his price target for SpaceX stock upward to $250 from $190 previously. According to him, SpaceX possesses a unique business model that combines capital, data, large language AI models, hardware, manufacturing, and specialized human capital under one corporate structure. Horan estimates that the Colossus data centers, the Starlink V3 network, and Cursor will be the key growth drivers for the 2027-2030 period, although he warns of risks related to the regulatory framework, execution of plans, and technical difficulties in utilizing advanced AI systems in space.

Market nervousness after the IPO

Despite the enthusiasm that accompanied the company's market debut, the stock's performance has been highly volatile. SpaceX shares fell nearly 5% on Wednesday, while on Thursday, losses reached as much as 10% intraday. Investors appear concerned about whether the company's extremely high valuation can be sustained, given the enormous investments required by its AI strategy. Nevertheless, Wall Street's general stance remains positive, with three "buy" recommendations and one "sell" recommendation over the last quarter.

Significant exposure to Bitcoin

Financial disclosures also revealed that SpaceX holds 18,712 Bitcoin. Their total acquisition cost amounted to approximately $661 million, while their market value as of March 31 reached $1.29 billion, nearly double the original investment. This revelation triggered intense activity in derivative markets related to SpaceX, with some estimates temporarily boosting the company's theoretical market capitalization to as much as $3 trillion.

The familiar strategy of Elon Musk

Simultaneously resorting to equity and debt capital is a familiar tactic for Elon Musk. The billionaire entrepreneur has repeatedly leveraged debt markets to finance investments and acquisitions, often through complex financial structures. A characteristic example was the acquisition of Twitter in 2022, which burdened the company with approximately $12.5 billion in debt and created significant difficulties for banks attempting to sell that debt to investors. Unlike that case, the new SpaceX issuance is considered much more attractive, as it carries an investment grade, has a clear refinancing purpose, and features strong operations generating revenue from space launches and satellite services.

What the new financing signals

The speed with which SpaceX returned to the markets after its IPO reveals the true cost of the global race for artificial intelligence. Even raising $75 billion through the largest IPO in history does not seem sufficient on its own to cover the company's investment needs. The development of data centers, energy infrastructure, and advanced computing systems requires massive resources, forcing even giants like SpaceX to combine equity financing and debt simultaneously. For investors, the new SpaceX bond issuance is a characteristic indicator of the true cost of the AI era, which is significantly higher than what impressive stock market valuations usually imply.

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