Many Investors Are Steering Clear Of SpaceX – But Will It Matter?

For years, SpaceX was the investment that most people couldn’t buy. It became the thing that people wanted largely because they couldn’t have it. Indeed, that scarcity only added to the mystique.

While everyday investors watched private valuations climb higher and higher, SpaceX became one of the most sought-after companies on the planet.

And then came the IPO and, predictably, people lost their minds.

However, something fairly interesting has happened since then. There certainly would’ve been people who predicted this, but for many, it has come as a bit of a surprise.

So, what happened? Well, despite being one of the most talked-about listings in recent history, not everyone is rushing to buy in. In fact, more than that, some investors are actually actively avoiding SpaceX altogether, while others are questioning whether the company’s valuation has become detached from reality. Even new investment products are emerging specifically for people who want exposure to the market without exposure to Elon Musk’s companies.

Why Are Some Investors Staying Away?

There isn’t just one reason why investors are avoiding SpaceX. It’s more of a combination of concerns about things like valuation, governance and, of course, the trillion-dollar elephant in the room (well, not anymore) Elon Musk himself.

Some investors simply think the company is too expensive. Some experts have described the whopping SpaceX IPO valuation as one of the most extreme anybody’s ever seen, arguing that investors may be getting swept up in excitement rather than fundamentals.

Others are uncomfortable with the governance structure of the company. Reports have highlighted concerns about the level of control Musk maintains over the company, even as it transitions into public markets. Critics argue that investors have relatively little influence over decision-making compared to what would be expected at many other listed firms, meaning that investors would need to have a certain level of trust in the man behind the wheel. A man, unfortunately, known for being a little eratic (to put it mildly) and fairly unpredictable.

Of course, there’s the political factor too. Musk has become an increasingly polarising figure (especially based on his affiliation with Donald Trump and other controversial figures), and for some investors, avoiding SpaceX has less to do with rockets and more to do with the man running the company. The avoidance is an ethical stand that sends a clear message to the rest of the world.

Indeed, the recent launch of “Ex-Elon” ETFs designed to exclude Musk-linked businesses suggests there is at least some demand for investment strategies that separate market exposure from Musk’s influence.

But It’s Not Necessarily a Bad Investment

The problem for SpaceX sceptics is that the company keeps doing things that are difficult to ignore.

This isn’t just a speculative startup with no revenue and a vague promise to change the world. SpaceX already dominates large parts of the commercial launch market and has built Starlink into a massive satellite internet business. Analysts continue to point to both businesses as major growth drivers.

Wall Street also remains remarkably optimistic about SpaceX, with some analysts having published extremely bullish price targets based on the assumption that SpaceX successfully scales Starship and dramatically reduces the cost of accessing space. Others see significant upside through Starlink’s continued expansion and future AI infrastructure opportunities.

In other words, even people who acknowledge the risks often struggle to argue against the size of the opportunity. Because while the risk may be significant, if SpaceX does end up achieving all the things Musk promises, it will, investors would be in a very, very good place down the line.

Are Investors Missing The Bigger Picture?

One of the more interesting aspects of the SpaceX debate is that many critics aren’t questioning whether the company is important; rather, they’re questioning whether the stock price already reflects that importance. And that’s a very different argument.

History is full of examples in which revolutionary companies turned out to be exactly as transformative as supporters predicted but still delivered disappointing returns because investors paid too much upfront.

At the same time, betting against SpaceX has become something of a dangerous game. The company has spent more than a decade proving doubters wrong, from reusable rockets to satellite internet. Competitors have repeatedly been forced to adapt to its pace of innovation, and the commercial space industry increasingly revolves around what SpaceX does next.

That doesn’t mean the valuation concerns are invalid by any means. What it does mean, however, is that investors are trying to answer two different questions at once. First, is SpaceX an extraordinary company? And second, is it worth the price being asked?

Will It Actually Make a Difference If Investors Stay Away?

It probably won’t change much for the company, contrary to what many of Musk’s critics would like to believe. At least, not in the major way many people think it would.

If a small group of investors decide to avoid SpaceX, the company is unlikely to lose much sleep. There is still enormous institutional interest in the stock, and analysts continue to view it as one of the defining growth stories of the decade, regardless of a few individual boycotts.

What could matter, however, is if scepticism broadens from a niche concern into a wider reassessment of expectations. SpaceX’s valuation depends heavily on future growth, future technologies and future markets that are still being built. And if investors begin questioning those assumptions on a larger scale, sentiment could shift very quickly.

For now, though,  it does seem like many investors are steering clear of SpaceX, but at the same time, there are plenty of others are more than willing to take their place.

And that may be the most “SpaceX” thing imaginable. The company has spent years doing things many people thought were impossible – it’s kind of what Musk has prided himself on. So, perhaps it’s fitting that even now, investors can’t quite agree whether they’re looking at the opportunity of a lifetime or the most expensive ticket in the market.