SpaceX’s IPO could open the floodgates — and secondaries are booming in the meantime

SpaceX is reportedly lining up 4 large Wall Street banks for a imaginable 2026 IPO — a determination that could awesome the long-awaited reopening of the nationalist markets aft a years-long IPO drought.

In the meantime, late-stage backstage companies similar SpaceX are uncovering different ways to make liquidity for employees and aboriginal shareholders, mostly done a fast-growing secondary market.

To unpack what SpaceX’s IPO chatter means, however backstage liquidity works earlier a debut, and what investors are looking for successful today’s pre-IPO giants, we spoke with Greg Martin, managing manager astatine Rainmaker Securities, a broker-dealer specializing successful secondary stock transactions for late-stage backstage companies.

You tin perceive present oregon wherever you get your podcasts, oregon work the speech below.

This interrogation has been edited for brevity and clarity.

I’m laminitis and managing manager of Rainmaker Securities, which specializes successful helping ample late-stage, pre-IPO companies transact shares successful the secondary market. I americium besides the laminitis of a secondary steadfast that buys backstage institution shares called Archer Capital Group, and co-founder of Liquid Stock, a concern that helps employees and executives workout their options utilizing their shares arsenic collateral. 

I’m definite the secondaries concern has been booming with this IPO drought from the past mates years.

No doubt. Private companies are staying backstage overmuch longer now. Many of these businesses — including SpaceX and different companies that would beryllium apical 30 successful the S&P 500 — would historically person gone nationalist years ago.

These companies are important successful our economy, and investors truly privation entree to these companies. At the aforesaid time, determination are shareholders and executives and founders who person been successful them for a agelong clip and privation to commencement seeing immoderate liquidity from their shares, which are a precise precocious percent of their nett worth. 

So these 2 forces person created a thriving secondary market. And we lone spot this inclination increasing due to the fact that much marketplace headdress is present housed successful the backstage markets.

Do you ideate the secondary markets shifting if we person a interruption successful IPOs this year?

It’s an absorbing question, due to the fact that intelligibly erstwhile a SpaceX goes public, you could reason that $800 cardinal has conscionable near the backstage strategy and is present successful the nationalist markets. But I deliberation it conscionable increases involvement successful much companies offering liquidity, and much investors coming into backstage markets. While SpaceX is simply a one-of-kind company, determination are a batch of companies that are being started contiguous and that are increasing precise fast. I mean, 3 oregon 4 years ago, what were OpenAI and Anthropic valued at? Those are present implicit a trillion dollars of combined marketplace cap. 

I truly spot the inclination of the accidental successful the backstage secondary spaces arsenic increasing overall, and frankly, erstwhile we spot the matriculation of SpaceX to the nationalist markets, I deliberation it’s going to really summation the superior marketplace involvement successful backstage companies.

What are immoderate things you’re noticing astir the SpaceX IPO?

If you deliberation astir the IPO marketplace the past fewer years, it’s been beauteous dismal since 2021, truthful the markets are truly waiting for a bellwether company. And I deliberation SpaceX is intelligibly a bellwether company…and there’s a immense magnitude of involvement successful that company. 

SpaceX besides conscionable did a tender astatine an $800 cardinal valuation, and we spot a ton of involvement connected our level astatine Rainmaker successful continuing to bargain into the secondary. And it’s not conscionable SpaceX. 

We’re seeing a batch of involvement successful immoderate of the different bellwether companies, whether it’s ByteDance, whether it’s Stripe, Databricks, evidently OpenAI, Anthropic, the AI businesses, Perplexity. So determination is simply a batch of interest, but SpaceX, I think, is the 1 that radical are pursuing the astir closely. And I truly deliberation it could make a reset successful the IPO marketplace if it were to spell nationalist this year.

What benignant of bid question are you seeing connected your platform?

SpaceX has continued to defy gravity. Even during the down periods of ‘22 and ‘23, SpaceX was the 1 institution that continued to terms up each clip determination was a hint of the institution going public. 

We person seen a important uptick successful interest, some from a size and a terms constituent – it’s already pricing good supra wherever the past tender circular was and getting person to that trillion and a fractional that they had discussed arsenic a imaginable IPO price.  

Elon Musk famously said helium wouldn’t instrumentality SpaceX nationalist until rockets were flying to Mars regularly. Why is helium racing to the nationalist markets now?

The institution has been backstage for a agelong time, truthful I wouldn’t accidental he’s racing to spell public, though his stance has shifted.

We are successful a precise bully market, we’re astatine each clip highs crossed the board. SpaceX has seen a ample magnitude of involvement successful the backstage markets, but the backstage markets are constrained. Not each capitalist connected the satellite tin entree the backstage markets. 

SpaceX has a immense accidental successful beforehand of it. They predominate the rocket-launching business. 

They’re gathering an astonishing Starlink business. They person Starship, which has truthful galore businesses related to it, whether it’s sending bulk payloads into abstraction oregon logistics astir the world. Now they’re talking astir gathering information centers successful space, and arsenic a genuinely vertically integrated company, they tin negociate it. 

And truthful it conscionable makes sense, fixed the affirmative marketplace dynamics and monolithic imaginable accidental that SpaceX could code crossed its galore concern lines. Why not spell and unlock each the remainder of the superior markets to assistance them money their businesses?

SpaceX has been traditionally beauteous choky astir who tin articulation its headdress table. There are a batch of nationalist information risks truthful they can’t person immoderate links to U.S. adversaries. Will opening up to the nationalist markets impact that?   

You could reason that it does unfastened up that imaginable hazard channel. I deliberation if they bash a nationalist offering, it’ll astir apt beryllium a sliver deal, truthful lone 5% of their institution that’s technically available. Now we’ll spot what happens, but astatine slightest things volition beryllium retired successful the unfastened and publically disclosed, truthful they tin spot who owns their shares. 

The question volition past become, bash immoderate of these companies – adjacent if they’re successful adversarial countries – person immoderate existent control? If they’re conscionable economical interests, that’s thing that tin beryllium tolerated. The world is, Elon and a beauteous choky knit radical of radical volition inactive proceed to power the company. 

You said it’s not a contention to IPO, but it surely feels that mode now, successful portion due to the fact that of Elon Musk’s nationalist feud with Sam Altman who is besides chasing adjacent to a $1 trillion IPO. Altman is besides looking to bargain Stoke Space, portion Bezos is talking astir orbital information centers. A batch of rivals look to beryllium converging connected a akin mission. 

SpaceX’s occurrence is going to breed immoderate imitation. We’ve heard present that Bezos is going to motorboat a connection web to vie with Starlink, but they’re a agelong mode behind. And OpenAI has its ain acceptable of superior risks successful the halfway concern that they person to address. So for them to spell nationalist makes a ton of sense, due to the fact that the AI commercialized is inactive precise blistery successful the nationalist markets. They person an insatiable request for superior close now, if you look astatine their pain rate. So there’s nary constituent successful them constraining the investors that tin entree their company, due to the fact that close present they request capital. 

I deliberation SpaceX tin beryllium a small much measured. They tin find the close clip erstwhile the marketplace presents itself well, due to the fact that they person a concern that is mostly profitable, and they person dominance successful their 2 cardinal businesses. So they’re successful the driver’s seat.

If there’s immoderate downdraft successful the market, I deliberation they’ll enactment private. 

It’s not each roses for SpaceX. They are facing their ain challenges launching Starship V3, and respective of their craft person exploded implicit the past year. But a batch of that mightiness not substance since this is an Elon Musk company, and those thin to bash good successful presumption of banal terms conscionable disconnected the backmost of his name. How bash you deliberation the SpaceX IPO volition beryllium priced comparative to what its existent equilibrium expanse says, versus the interaction of Elon Musk and his empire? 

It volition decidedly get a premium multiple. There’s an Elon halo effect, and he’s delivered. Even though Tesla’s superior revenues travel from automobiles, it’s wholly vertically integrated. It captures data. It present has self-driving taxis. It has Optimus robots –

It’s got a minimal rollout of self-driving taxis and Optimus is inactive years away…

Robots are the aboriginal astatine Tesla. Tesla is truly a authorities of the creation manufacturing company, and Elon owns xAI, Twitter, SpaceX – these companies tin beryllium precise virtuous. 

I bash deliberation there’s a halo effect astir Elon and that creates immoderate pressure, too. So I expect helium volition get a premium good and supra what emblematic marketplace rates would beryllium for a institution similar SpaceX, fixed their equilibrium expanse and revenue.

I deliberation radical judge successful the aboriginal of a information halfway successful abstraction that’s cooled by abstraction and tally by star panels straight from the sun. I mean, it sounds brainsick and pastry successful the sky, conscionable similar going to Mars sounds brainsick and pastry successful the sky. But if anyone tin bash it, Elon’s astir apt the guy.

You accidental that, but helium hasn’t really done a batch of the weird pastry successful the entity worldly that helium has promised to do. In fact, others person bushed him to the punch, particularly erstwhile it comes to afloat self-driving. 

That volition beryllium debated by investors and volition beryllium wherever the hostility is. When you enactment truthful overmuch worth successful the content that 1 idiosyncratic tin transcend expectations continuously, that’s a large challenge. And immoderate radical volition not beryllium comfy with that risk. 

How important is it that SpaceX is lining up banks for a 2026 IPO?

It’s a beauteous large signal. I don’t deliberation they’re conscionable playing games.

But having a speech with banks doesn’t needfully mean the IPO is coming this year. What are immoderate different signals that radical could ticker for erstwhile a institution is getting acceptable to spell nationalist – not conscionable SpaceX, but anyone?

Look astatine the radical they prosecute and if that portends much of an IPO elder enforcement squad versus an entrepreneurial team. If they look truly focused connected a main accounting serviceman from a nationalist company. Or if there’s a swap retired and a caller CFO comes successful with heavy nationalist institution experience. If they’re beefing up their capitalist relations team, accounting, legal. 

Companies similar SpaceX person had nationalist people teams for a while, truthful I don’t deliberation there’s a batch to larn there.

Zooming retired a small bit, however would you accidental backstage marketplace valuations typically comparison to what companies execute successful their IPOs?

It’s a bully motion for backstage companies to pre-understand their demand. If a institution didn’t person that and they fundamentally had to trust connected a two-week selling play from erstwhile they record publically oregon if they commencement a roadworthy amusement wherever they lone speech to apical accountants, that’s often erstwhile you person a truly hard pricing situation due to the fact that they’re not getting due terms discovery.

So we’re truly pushing companies to really unfastened up your backstage secondary capability  due to the fact that it’s a large mode to make terms find good successful beforehand of the IPO, to commencement getting radical attached to your business, to unfastened yourself up to a broader capitalist base. That way, by the clip you bash spell connected your roadworthy show, you really person a beauteous bully presumption of what your terms should be, and you extremity up with a overmuch much businesslike IPO. 

Think astir erstwhile Figma went nationalist and traded up 200%—that’s not truly a bully IPO. That’s a institution that astir apt didn’t bash precise bully terms find successful advance. 

Walk america done however secondaries really work. Let’s accidental I’m a SpaceX worker with banal options. What are my options earlier IPO? 

All backstage companies are not created equally. SpaceX has precise choky controls connected their headdress table, partially due to the fact that they don’t privation to transcend the fig of shareholders, astatine which constituent they would person to beryllium a nationalist company. And truthful Space X, dissimilar astir companies, runs tender offers 2 oregon 3 times a year, truthful determination tends to beryllium a tenable magnitude of liquidity for employees. 

Now there’s besides what I would telephone the SPV (special intent vehicle) satellite that trades successful SpaceX, wherever radical enactment their shares successful SPVs and past commercialized units successful their SPVs, alternatively than the shares themselves. So determination really isn’t a headdress array change, but determination is an economical ownership alteration by virtuousness of trading units successful the SPV. That’s wherever astir of the trading successful SpaceX lies. 

Whereas immoderate companies let trading of shares straight connected their headdress table, and immoderate companies perfectly prohibit each secondary transactions, which I don’t deliberation is simply a bully idea. That’s wherefore radical enactment with firms similar Rainmaker, due to the fact that we get to cognize the companies. We get to cognize however they show and defender trades truthful we tin assistance get those trades done. We tin assistance supply liquidity for radical who privation it. We tin supply either ownership of the shares oregon ownership successful the economics of the shares for investors.

You accidental entree to accusation is 1 of an investor’s biggest problems successful the secondary markets. Does Rainmaker assistance supply information?

We enactment with immoderate companies wherever we’re provided information rooms and tin supply entree to information. We bash our ain probe connected thing publically disposable and person a presumption of proviso and request dynamics. So we person a batch of accusation we tin provide, but we can’t stock wrong institution accusation unless the institution allows it. Increasingly, we’re helping companies with those processes. The much accusation we tin provide, the little the hazard for investors, and that tends to unfastened up markets. But it’s an evolving process. These are backstage companies for a reason—they’re guarded with what they privation to share, and we’re precise respectful of that.

Just similar a accepted investor, they would privation to beryllium capable to bash their owed diligence crossed financials, crossed management. They surely would similar an knowing of the headdress array – similar however galore shares are outstanding, what’s the preferences? What does this terms represent? What’s the debt? They would emotion to recognize what the proviso and request equilibrium is like.

The much they have, the better. That’s wherefore they’re much comfy with much public-facing backstage companies, similar SpaceX – adjacent without nonstop humanities financials – than the little well-known names.

We proceed to spot important request for companies similar Databricks, Stripe, OpenAI, Anthropic, xAI, ByteDance. The AI commercialized continues to beryllium strong, whether it’s Lambda Labs oregon Cohere, which is simply a Canadian institution adjacent and beloved to my heart. 

As companies awesome they’re going to spell nationalist – similar Discord, Motive, Canva – radical get a feeling that there’s going to beryllium liquidity, and that’s erstwhile we commencement to spot things open. There are astir apt 20 to 30 companies connected our level that commercialized beauteous regularly, and that conscionable continues to grow. As the IPO marketplace starts to unfastened up, we’re going to spot that broaden. 

Like successful 2021, we were trading hundreds of companies, and past arsenic the IPO marketplace closed, and that fig compressed. But past twelvemonth was our biggest twelvemonth – we were trading implicit $1 cardinal worthy of secondaries.

Where tin our listeners link with you online?

I’m connected LinkedIn. They tin travel sojourn my website, astatine Rainmakersecurities.com if they’re looking to merchantability shares, they could travel to archercapg.com. If they’re looking to workout their options, they could travel to liquidstock.com.