SpaceX races towards IPO: plans to use a dual-class share structure and considers restructuring debt after merging with xAI

Recent reports indicate that SpaceX is making a final push for its IPO later this year. The aerospace giant, valued at over $1 trillion, has chosen an unusual path: consolidating Musk's control through a dual-class share structure while addressing the heavy debt burden accumulated after merging with xAI. It is reported that both initiatives will be completed before a potential fundraising of up to $50 billion in the public offering.

According to reports from Friday, February 13, SpaceX is considering adopting a dual-class share structure in the IPO, granting certain shareholders additional voting rights. This arrangement would allow Musk to maintain absolute control over the company even with a minority stake. Insiders say the company is currently increasing its board members to assist in advancing the IPO process and to support Musk's space ambitions beyond its core rocket and satellite business.

Earlier reports on Friday indicated that the banking syndicate Musk is collaborating with is discussing a financing plan aimed at restructuring the debt issues arising from the merger with xAI. Musk has accumulated nearly $18 billion in debt through the acquisition of Twitter, now known as X, and the establishment of the artificial intelligence (AI) development company xAI. This yet-to-be-finalized financing deal is expected to help the merged giant alleviate its debt burden before the IPO.

These two initiatives highlight the complex challenges SpaceX faces before going public: protecting the founder's decision-making power while managing the financial burdens from the high-risk AI business merger, all while presenting a clear growth story to investors.

Dual-Class Share Moat

The dual-class share structure is the core mechanism SpaceX has designed to strengthen Musk's control. According to Bloomberg, this two-tier structure will give Musk's shares more voting power, thereby dominating the company's decision-making process.

This strategy aligns with Musk's previous proposal for Tesla to create a dual-class share structure to ensure at least 25% voting control, threatening to develop AI and robotics products elsewhere if this influence could not be achieved. He stated in 2024, "This is not to say I can control the company, even if I go crazy."

While Musk currently holds about 11% of Tesla's shares, his new $1 trillion compensation plan could expand his stake to 25% or more over the next decade.

Dual-class share structures are relatively common among U.S. tech companies, with Meta Platforms and Google's parent company Alphabet adopting this framework. Such structures are typically packaged as a way to allow founders to focus on long-term visions, with the typical practice granting founders and insiders 10 or even 20 votes per share, while common stock only has one vote. Critics argue that this makes them less accountable.

For Musk, super-voting shares will establish a fortress against pressure from activist shareholders, allowing him to steer the company in his desired direction. This arrangement is particularly important for SpaceX as the company expands from purely rocket and satellite businesses into high-risk areas like artificial intelligence.

$18 Billion Debt Restructuring

While advancing its IPO, SpaceX faces the urgent task of managing the debt burden following its merger with xAI. Musk has accumulated nearly $18 billion in debt during the acquisition of Twitter and the establishment of xAI, which is becoming a heavy burden for the new entity post-merger.

According to reports this Friday, Morgan Stanley is expected to play a leading role in the financing plan for the merged company. Morgan Stanley led the debt financing for Musk's acquisition of Twitter in 2022 and the subsequent financing for xAI, and is also one of the lead underwriters for SpaceX's IPO, with three other co-lead underwriters including Goldman Sachs, Bank of America, and JP Morgan.

Representatives from Morgan Stanley and the aforementioned banks declined to comment on the news.

Reports indicate that the $12.5 billion financing plan for the acquisition of Twitter continues to weigh down the social media platform xAI, requiring tens of millions of dollars in interest payments each month. Initially, banks were unable to sell this debt due to investor concerns over advertising revenue being affected by Musk's chaotic handling of content moderation. It wasn't until April of last year that banks finally unloaded the last $1.23 billion of Twitter acquisition debt from their balance sheets, selling it at a fixed rate of 9.5% at a discount of 98 cents.

Other institutions holding X debt include Bank of America, Barclays, Mitsubishi UFJ Financial Group, BNP Paribas, Mizuho Financial Group, and Société Générale.

In March 2025, Musk will merge X into xAI, valuing the social network at $45 billion, including debt. Subsequently, xAI will also take on $5 billion in debt. Creditors are reportedly concerned about the profitability and cash needs of the AI under the new entity, requesting that the company avoid issuing debt that would create similar liabilities.

On February 2, SpaceX released a statement on its website regarding the acquisition of xAI, signed by Musk, confirming previous reports. This merger brings SpaceX's valuation to approximately $1.25 trillion, with SpaceX contributing $1 trillion and xAI contributing $250 billion.

Opportunities and Risks Post-Merger

The merger of SpaceX and xAI creates a super entity valued at $1.25 trillion, but also raises questions about strategic fit and financial risks.

In terms of profitability, SpaceX is at its peak. According to reports last month, SpaceX's revenue for 2025 is projected to be between $15 billion and $16 billion, with an EBITDA profit of about $8 billion and a profit margin of around 50%. This performance is primarily driven by the 9 million users of the Starlink satellite network and its dominant position in the global launch market. In 2025, SpaceX completed 165 missions, accounting for more than half of global launch missions.

In contrast, xAI's financial situation is starkly different. Bloomberg columnist Thomas Black noted that xAI generated only about $210 million in revenue in the first nine months of 2025, while burning through $8 billion to $9.5 billion, currently consuming about $1 billion in cash each month.

SpaceX has agreed to inject $2 billion into xAI, but due to competition with tech giants like Microsoft and Alphabet, as well as AI newcomers like OpenAI for chip and data center resources, the company's spending shows no signs of slowing down in the short term UBS's research report earlier this month pointed out that this merger marks the beginning of the "orbital AI" era. Musk bets that a significant share of computing power will operate in near-Earth orbit within the next 2 to 3 years. To this end, the company has submitted an application to the Federal Communications Commission seeking approval to launch up to 1 million satellites aimed at computing functions.

However, doubts about the synergy remain in the market. A Bloomberg column argues that there is currently no substantial synergy between the two. SpaceX, as a pure space company, is expanding its lead over competitors and does not need to own xAI to develop the space data center market. On the contrary, all AI companies will line up to purchase SpaceX's dedicated data center satellites and low-cost launch services.

EchoStar, which holds about 3% of SpaceX's shares, saw its stock price drop after the merger news broke, indicating that not all investors are convinced. UBS analysts pointed out that investors are no longer facing a simple space infrastructure company generating strong cash flow, but rather a complex hybrid that must balance operational cash flow with capital investment for AI scaling.

IPO Countdown

SpaceX is accelerating its push for a potential record-breaking IPO. According to reports from last month, the company aims to go public in mid-June 2026, a timing that considers several factors: Jupiter and Venus will have their first close conjunction in over three years, and a few days later, Mercury will also align diagonally with these two planets. Another consideration is Musk's birthday—June 28, with insiders stating that the target date is set around this day.

Last month, media reports cited insiders saying that several investment banks expect SpaceX's valuation at the time of the IPO to exceed $1.5 trillion, with the fundraising scale potentially surpassing $50 billion, far exceeding the $29 billion IPO record set by Saudi Aramco in 2019.

SpaceX's Chief Financial Officer Bret Johnsen has been in talks with existing private investors about the possibility of going public since mid-December 2025. Reports indicate that Bank of America, Goldman Sachs, JP Morgan, and Morgan Stanley have been selected as lead underwriters. However, sources noted that all data is still in the preliminary stage and may change.

Some bankers and investors believe that the June listing timeline is too tight. SpaceX still needs to submit the S-1 form to the U.S. Securities and Exchange Commission (SEC) and arrange a global roadshow. In the context of Trump frequently threatening tariffs and attempting to influence Federal Reserve interest rate policies, market conditions and sentiment are more unpredictable than ever.

Insiders say that Musk's motivation for pushing the IPO is that the company needs more funds to develop the Starship rocket system aimed at reaching Mars. SpaceX has informed investors that it is developing technology to deploy data centers in space through its network of 9,400 Starlink satellites, which Musk believes is crucial for its corporate group to compete with rivals like Google and OpenAI in the field of artificial intelligence In September 2025, SpaceX reached a $17 billion deal with EchoStar to acquire wireless spectrum licenses to enhance the Starlink network, allowing Musk to expand "direct connect device" services in the U.S., enabling mobile phones to connect directly to satellites without dedicated terminals. Musk expects that the Starship rocket will begin executing commercial payload launch missions this year, having completed 11 test launches since 2023