After IPO, SpaceX plans to seek out $20 billion

When Elon Musk went into sales pitch mode before the SpaceX IPO, the comparison he marshaled to justify valuing the company in the trillions of dollars, and tapping investors for tens of billions, raised a few eyebrows.

- By BAILEY LIPSCHULTZ AND DAVIDE BARBUSCIA

“We're kind of like the Union Pacific,” he said in an interview in an investor presentation ahead of the initial public offering, citing one of his frequent touchstones — a historic infrastructure project in the 1800s intended to connect western states by rail for the first time. “People thought they were crazy” when they built it, he said, “but now California is the biggest state in the country.”

The pitch from one of the world’s most successful and divisive entrepreneurs was typical Musk. The world’s richest person and first trillionaire linked SpaceX, with its plans for orbital data centers and a colony on Mars, to a name evoking an essential part of America’s growth into a superpower — a prize easily justifying the investment that lifted the company’s market value above $2.5 trillion in a handful of trading days.

The IPO wasn’t the end of the fundraising campaign; it was the start. SpaceX is turning to the bond market and is preparing to seek at least $20 billion in its first deal, Bloomberg News reported. Capital expenditure could surpass $700 billion a year by 2031 in one estimate. Is that too much to ask when the goal is, as Musk put it, making “Star Trek real”?

Ask the backers of the Union Pacific. Construction of the railroad flamed out and stopped in Utah — not California. That project was propped up by government support as it minted generational wealth for insiders before ultimately failing.

Richard White, American history professor emeritus at Stanford University, called the original Union Pacific “a mess of self-dealing and corruption.”

“To use that as your model of what your corporation is going to be, plays on the immense ignorance of the history of this country, of financial markets and most Americans,” he said in an interview.

A representative for SpaceX didn’t immediately respond to a request for comment.

‘We’re seeing the lines blur’