SpaceX IPO & Secondary Markets Boom

SpaceX is reportedly preparing for a potential 2026 initial public offering (IPO), a move that could signal the long-awaited reopening of public markets after years of drought. This significant event has brought renewed attention to how late-stage private companies, including SpaceX, manage liquidity for employees and early shareholders, primarily through a rapidly expanding secondary market.

To understand the implications of SpaceX's IPO discussions, the mechanics of private liquidity before a public debut, and what investors seek in today's pre-IPO giants, we consulted Greg Martin, managing director at Rainmaker Securities, a broker-dealer specializing in secondary share transactions for late-stage private companies.

The Rise of Secondary Markets Amidst IPO Drought

Martin, founder and managing director of Rainmaker Securities, explained his firm's focus on facilitating secondary share transactions for large, late-stage, pre-IPO companies. He also founded Archer Capital Group, which acquires private company shares, and co-founded Liquid Stock, a service assisting employees and executives in exercising stock options using their shares as collateral.

The secondary market has indeed seen a boom, largely due to private companies choosing to remain private for extended periods. Many of these businesses—including SpaceX and others that would rank among the S&P 500's top 30—would historically have gone public years ago. This trend means a significant portion of market capitalization is now held in private markets.

“These companies are significant in our economy, and investors really want access to them,” Martin noted. “At the same time, shareholders, executives, and founders who have been with these companies for a long time want to see some liquidity from their shares, which often represent a very high percentage of their net worth.”

These converging forces have fueled a thriving secondary market, a trend Martin expects to continue as more capital flows into private ventures.

SpaceX IPO: A Bellwether Event and Market Impact

While a SpaceX IPO would theoretically move an estimated $800 billion from the private to the public sphere, Martin believes it would ultimately increase interest in private markets and companies offering liquidity. He points to the rapid growth of companies like OpenAI and Anthropic, which have collectively surged to over a trillion dollars in market cap in just a few years. “I really see the trend of the opportunity in the private secondary spaces as growing overall,” he stated, adding that SpaceX’s public debut could “actually increase the capital market interest in private companies.”

The IPO market has been “pretty dismal” since 2021, making the potential SpaceX IPO a highly anticipated “bellwether” event. The company recently conducted a tender offer at an $800 billion valuation, and Rainmaker Securities continues to see “a ton of interest” in buying SpaceX shares on the secondary market. This interest extends to other prominent private companies such as ByteDance, Stripe, Databricks, OpenAI, Anthropic, and Perplexity. Martin emphasized that SpaceX is being watched most closely and could “create a reset in the IPO market” if it goes public this year.

Rainmaker’s platform shows SpaceX “continuing to defy gravity,” with significant upticks in both bid size and price. Shares are already trading well above the last tender round, approaching the $1.5 trillion valuation previously discussed as a potential IPO price.

Elon Musk’s Shifting Stance and SpaceX’s Potential

Elon Musk famously stated he wouldn’t take SpaceX public until rockets were regularly flying to Mars. Martin clarified that while Musk’s stance has shifted, it’s not a “race” to go public, given the company’s long private history. The current timing makes sense due to a very strong market, with all-time highs across the board. While private markets have shown immense interest, they are constrained compared to the vast public markets.

SpaceX boasts immense opportunities, dominating rocket launches, building the Starlink business, developing Starship for bulk payloads and global logistics, and even exploring space-based data centers. As a vertically integrated company, it can manage these ambitious ventures. “Given the positive market dynamics and massive potential opportunity that SpaceX could address across its many business lines, why not go and unlock all the rest of the capital markets to help them fund their businesses?” Martin questioned.

National Security, Competition, and Valuation

SpaceX has historically maintained tight control over its cap table due to national security risks, avoiding links to U.S. adversaries. A public offering, likely a “sliver deal” (e.g., 5% of the company), could open potential risk channels. However, public disclosure would allow transparency regarding ownership. Martin believes that if interests are purely economic and not controlling, they might be tolerated, as Elon Musk and a close-knit group would likely retain control.

The success of SpaceX is inspiring imitation, with rivals like Jeff Bezos’s rumored communication network to compete with Starlink. OpenAI, too, faces significant capital risks and an “insatiable need for capital” due to its high burn rate, making a public offering sensible to access broader investor pools.

In contrast, Martin views SpaceX as being “in the driver’s seat.” The company can be more “measured” in its approach, choosing the right market timing because its core businesses are largely profitable and dominant. “If there’s any downdraft in the market, I think they’ll stay private,” he predicted.

Despite challenges like Starship V3 launch delays and past explosions, the “Elon halo effect” is expected to grant SpaceX a premium valuation. Martin highlighted Tesla’s vertical integration, data capture, self-driving ambitions, and Optimus robots as examples of Musk’s delivery, even if some projects are still nascent. He anticipates SpaceX will command a premium “well and above what typical market rates would be for a company like SpaceX, given their balance sheet and revenue.”

Investors, Martin explained, believe in Musk’s ambitious visions, such as space-cooled data centers powered by solar panels directly from the sun, or even going to Mars. “If anyone can do it, Elon’s probably the guy,” he remarked, acknowledging that this belief in one person’s continuous ability to exceed expectations also presents a “big challenge” and a risk some investors may not be comfortable with.

Navigating the Path to Public Markets

While lining up banks for an IPO is a significant signal, other indicators suggest a company is preparing to go public. These include hiring senior executives with public company experience, such as a chief accounting officer or a new CFO, and beefing up investor relations, accounting, and legal teams. However, Martin noted that companies like SpaceX often have public-grade teams already in place, making these signals less obvious for such mature private giants.

Private secondary markets offer a crucial advantage: price discovery. Companies that engage in secondary transactions can gauge demand and develop a clearer understanding of their valuation well before an IPO roadshow. This process helps avoid scenarios like Figma’s IPO, where shares traded up 200% on debut, indicating poor price discovery beforehand. Rainmaker Securities actively encourages companies to utilize secondary capabilities to attract a broader investor base and achieve a more efficient IPO.

How Secondary Transactions Work for SpaceX

For a SpaceX employee with stock options, the process differs from typical private companies due to SpaceX’s tight controls, partly to avoid exceeding the shareholder limit that would mandate public status. SpaceX regularly conducts tender offers (two or three times a year) to provide liquidity.

Additionally, a “special purpose vehicle (SPV) world” exists for SpaceX shares. Investors place shares into SPVs and then trade units of these SPVs, rather than the shares themselves. This allows for economic ownership changes without altering the company’s official cap table, and it’s where most SpaceX secondary trading occurs.

Some companies permit direct share trading on their cap table, while others strictly prohibit all secondary transactions—a strategy Martin advises against. Firms like Rainmaker Securities navigate these varying company policies, helping facilitate trades and provide liquidity while respecting company monitoring and guardrails.

Access to information is a significant challenge in secondary markets. Rainmaker Securities works with some companies that provide data rooms, and they conduct their own research on publicly available information to assess supply and demand dynamics. While they can provide extensive information, they only share inside company data with explicit permission, respecting the private nature of these companies. Martin noted that providing more information lowers investor risk and helps open markets, an evolving process.

Appetite for Other Unicorns

Demand remains strong for secondary shares in other late-stage unicorns, including Databricks, Stripe, OpenAI, Anthropic, xAI, and ByteDance. The AI sector, in particular, continues to drive robust interest, extending to companies like Lambda Labs and Cohere. As companies like Discord, Motive, and Canva signal potential public offerings, the expectation of future liquidity further fuels secondary market activity. Rainmaker Securities regularly trades shares in 20 to 30 companies, a number expected to broaden as the IPO market reopens. Last year, the firm facilitated over $1 billion in secondary transactions, marking its biggest year yet.

Readers interested in learning more can connect with Greg Martin on LinkedIn or visit Rainmaker Securities at rainmakersecurities.com. For those looking to sell shares, Archer Capital Group can be found at archercapg.com, and for exercising options, Liquid Stock is available at liquidstock.com.