JAPAN PERSPECTIVE

Tokyo, May 21, 2026. Elon Musk's announcement of a SpaceX IPO - potentially the largest in financial market history - is met with a mix of fascination and analytical caution in Japan. The prospectus filed with US regulators reveals a company whose valuation could reach $1.75 trillion, far exceeding the previous record held by Saudi Aramco, which raised $26 billion in its debut seven years ago. SpaceX's offering is estimated to target up to $75 billion - a figure that sends shivers down the spines of Japanese financial observers.

But behind the narrative ambition - the prospectus literally cites humanity's need to avoid the fate of dinosaurs - the numbers raise eyebrows. SpaceX reported $2.6 billion in operational losses in 2025, on revenues of $18.7 billion. The losses continued to accumulate in early 2026. This financial profile, unusual for a company seeking to raise tens of billions, sparks questions in Tokyo's business circles, accustomed to strict profitability criteria.

The Starlink activity is the real cash cow of the group: with $4.4 billion in operational profit in 2025 and 10 million subscribers in 150 countries, the network of 10,000 satellites in low Earth orbit represents the most solid part of the edifice. In contrast, SpaceX's recent acquisition of the social media platform X (ex-Twitter) and the xAI artificial intelligence division - both heavily loss-making, with xAI alone losing $6.4 billion last year - is seen in Japan as a contested decision, with some long-time shareholders denouncing these acquisitions as bailout operations detrimental to SpaceX.

The dependence on US federal contracts is another point of vigilance. Some 20% of SpaceX's revenue comes from the US government, with $6 billion in contracts with NASA and the Pentagon over five years. The question of the sustainability of these contracts after the Trump presidency - during which Musk was the main donor - is posed bluntly in the prospectus itself.

On governance structure, the prospectus provides for doubled voting rights for Musk and certain shareholders, ensuring his durable control over the listed company.