The City of London is bracing for a spectacle. Elon Musk’s SpaceX, the private rocket company that has defied gravity both literally and financially, is reportedly considering a market listing later this year. For Britain’s financial district, this is not merely another IPO. It is a test of how much risk the Square Mile is willing to swallow in an era of inflation, rising gilt yields, and capital flight.
Let us strip away the fanfare. SpaceX is a remarkable enterprise. It has slashed launch costs, cornered the satellite internet market with Starlink, and is developing Starship for interplanetary travel. But from a balance sheet perspective, this is a high-wire act. The company has reportedly raised funds at valuations exceeding $150 billion, yet its profitability remains sporadic. Revenues have grown, but so have capital expenditures. Musk himself has warned of “a genuine risk of bankruptcy” for SpaceX’s Starship programme if production challenges persist.
Now the pinstripes of the City must decide: do they back a visionary who has never met a risk he didn’t like? The timing is treacherous. The Bank of England is still wrestling inflation down from double digits, gilt yields have been volatile, and the government’s fiscal credibility is under scrutiny after last year’s mini-Budget debacle. Overseas investors have been looking askance at UK assets. A successful SpaceX listing would signal that London can still attract the world’s most innovative companies. A flop would reinforce the narrative that the City has lost its nerve.
There is also the matter of corporate governance. Musk’s Twitter stock has been a rollercoaster that would make a hedge fund manager blanch. City institutions prize stability and shareholder rights. Can they reconcile that with Musk’s mercurial style? The UK listing rules have already been loosened to attract tech unicorns, but SpaceX is a different beast entirely. It is a company where the CEO’s whims can move the share price as much as earnings.
For the taxpayer, there is an additional sting. The UK government has been courting Musk for a Tesla gigafactory and has subsidised spaceports in Cornwall and Scotland. If SpaceX lists here, it will be a boon for the Treasury’s reputation. But if the stock dives, it will be the retail investors who get burned, not the venture capitalists who exited early.
Let us not forget the broader context. Capital flight has been a persistent headache for the UK. In 2022, net portfolio investment outflows exceeded £50 billion, as global investors fled to US dollar-denominated assets. A SpaceX listing could reverse some of that flow, but it would require the City to demonstrate that it can handle high-growth, high-volatility stocks. The London Stock Exchange’s recent record is mixed. Deliveroo’s IPO was a fiasco. ARM Holdings chose New York. The message is clear: if the City wants to play in the big leagues, it must tolerate the chaos that comes with them.
What will happen? The IPO is not a certainty. Musk has hinted that he prefers to keep SpaceX private, wary of quarterly earnings pressure. But if he does decide to list, London will have to compete with New York. The Big Apple offers deeper liquidity and a more forgiving regulatory environment for speculative tech. The UK would need to offer something else: perhaps a faster route to premium listing status, or a government commitment to support the space industry.
For my part, I am sceptical. The City has historically been better at financing stable, cash-generating businesses than speculative ventures. The cult of the founder has never sat well with British institutional investors. But I hope I am wrong. A SpaceX listing would be a landmark. It would refresh London’s image as a global financial centre. It would also remind everyone that the biggest risks can yield the biggest rewards. Or the biggest losses. That is the bottom line.
