SpaceX needs to hit two of its moonshots to maintain its reputation: Steve Westley

Elon Musk’s SpaceX needs to hit at least two of three “moonshots” to justify its huge valuation, a former Tesla board member told CNBC on Friday.

Musk’s reusable rocket company aims to raise $75 billion by selling 555.6 million shares at $135 each, according to a filing with the Securities and Exchange Commission. The deal values ​​SpaceX at $1.77 trillion, making it the seventh most valuable U.S. company. tesla.

Venture capitalist and former Tesla board member Steve Westley told CNBC’s “Squawk Box Europe” on Friday that the pricing for SpaceX’s impending IPO is difficult to predict because the company’s three core companies are “very different.”

In addition to its space business, Musk’s company owns the Starlink satellite internet service, which accounts for the majority of the company’s revenue and is its only profit-making unit. This includes xAI, which Musk merged with SpaceX in February.

“SpaceX is one company with three successful moonshots, and I think it needs to succeed at least two of those moonshots to maintain its $2 trillion valuation,” said Westley, who is also the founder of venture fund The Westley Group.

SpaceX achieved its goal of becoming the largest IPO in history.

The number of underlying businesses could grow even further, amid growing speculation that Mr. Musk will eventually merge Tesla with SpaceX. CNBC reported in May, citing people familiar with the matter, that Tesla and SpaceX already have a long list of shared resources and that Mr. Musk had discussed the possibility of merging the two companies with colleagues.

Westley told CNBC’s Arjun Karpal that a move to integrate Tesla into SpaceX is “absolutely possible.”

“It’s going to be difficult. There are a lot of governance issues and people are going to be unhappy about it, but I think there’s a good chance that it will happen eventually,” he added.

—CNBC’s Lora Kolodny and Ari Levy also contributed to this report.