A live feed shows SpaceX CEO Elon Musk on the day of SpaceX’s initial public offering (IPO) on June 12, 2026, on the Nasdaq Market site in New York City, USA.
Gina Moon | Reuters
space x Last week’s $25 billion entry into the bond market appeared to be well received in the bond market, with huge demand for the offering.
But less than two weeks after SpaceX’s IPO, the largest AI corporate bond issue in history highlighted the group’s intense capital needs, capital investment plans and future refinancing obligations, creating diversification challenges for investors.
Why SpaceX used the debt market
The group entered the debt market on June 22, announcing the issuance of senior unsecured notes, and people with knowledge of the matter told CNBC that the company was aiming to raise $20 billion, which was later increased to $25 billion. The company said it would use the net proceeds to “fully repay outstanding borrowings under the Bridge Loan Facility, pay related fees and expenses, and remaining amounts for general corporate purposes.”
SpaceX’s stock price soared following its long-awaited IPO. Last week’s bond issuance hurt investor confidence.
SpaceX has received orders worth nearly $90 billion, a person familiar with the financing previously told CNBC. The person requested anonymity as the details are not public.
However, the move appears to have spooked stock investors, with SpaceX falling more than 13% in the week following strong post-IPO performance.
Chris Beauchamp, IG’s chief market analyst, said SpaceX will increasingly have to “work hard to get its voice heard” and added that there are plenty of offers from more profitable companies that could step into the spotlight.
“Equity investors are different, but bond investors are the adults in the room,” Beauchamp told CNBC via email. “SpaceX may feel like they don’t have enough work to do, but I think the market will be able to absorb the entire issuance amount.”
“The timing is certainly not good, but we’ve seen temporary outbreaks of panic like this before, and eventually the wagons tend to move forward.”
“Two weeks after the largest IPO in history, SpaceX is already tapping into the debt markets, with a net loss of $5 billion and capital expenditures more than doubling from a year ago,” said Christopher Della Farve, senior vice president of capital markets at Post Oak Group.
Why SpaceX bonds cause a diversification problem
Della Fave said SpaceX’s losses and high capital expenditures were not “alarming” on their own because “capital-intensive growth companies are booming.”
However, he highlighted “structural issues” that “investors are not pricing in.”
“Owning SPCX stock or SpaceX bonds is not diversification,” Della Fave added. “The execution risk is the same for the two financial products.”
“Starlink has to scale. Starship has to work. Both the equity story and debt repayments depend on it. In portfolio construction, we treat the entire SpaceX exposure as a single concentrated position, regardless of product. This is the same way we approach single-name technology bets disguised as multi-asset allocations.”
SpaceX’s multibillion-dollar bond issue means that many investors will be exposed to the group through two different asset classes – the stock from its blockbuster June 12 IPO and this bond.
“Almost every investor already has an allocation to U.S. technology, and the purpose of fixed income as an asset class is certainly to diversify,” Gum’s head of multi-asset Julian Howard told CNBC on Friday.
He noted that SpaceX’s 10-year bond is trading at a relatively narrow spread of 1.4 percentage points to the U.S. Treasury.
In the bond sale, SpaceX divided the price of the bonds into five different tranches, with maturities ranging from 2031 to 2056. Interest rates range from 5.35% for 2031 bonds to 6.65% for 2056 bonds.
“While this comfortably outpaces inflation, there is a risk that the spread could widen if there are signs that SpaceX will not be able to meet its ambitious revenue targets, or if the outlook for technology and AI is shaken in any way,” he added.
Mike Cope, Morningstar’s chief investment officer, said SpaceX faces two big challenges in the market in the long term.
“First, the supply of equity will increase as early investors reduce their exposure and monetize their gains,” he told CNBC.
“Second, the current price is too high given the great uncertainty surrounding the company’s prospects and the company’s starting point with large deficits and large capital investment requirements.”
