As Elon Musk-led SpaceX gears up for its upcoming IPO, some analysts have cautioned investors against putting their money into the listing, citing concerns with the commercial space flight giant’s valuation.

The Juice Has Been Squeezed

Speaking to CNBC in an interview on Monday, Bryn Talkington, a managing partner at Requisite Capital Management, shared that investors would likely not see strong returns on their investment as much of the value is already priced in. “I think the juice has been squeezed from this orange,” she said, adding that the company’s $16 billion revenue at a $2 trillion market cap made “no sense” to her.

Another analyst, Stephen Weiss of Short Hills Capital Partners, shared that investors wouldn’t be able to generate returns at a $2 trillion market cap. “It's got to go to $3 trillion… it's ridiculous for one of the largest companies in the world on that revenue base,” he said.

Musk Denies $2 Trillion Valuation

The news comes as Musk had rubbished reports of SpaceX targeting a valuation upwards of $2 trillion with the IPO, while earlier confirming a $1.75 trillion valuation for the company. SpaceX aims to raise over $75 billion via its IPO, which is set to become the largest IPO in history.

What could further boost the IPO are the series of rule changes adopted by the Nasdaq 100. These rule changes could help SpaceX enter the index within 15 trading days. The rule changes also update the methodology for calculating a company's market capitalization. The new method would now include both listed and unlisted shares.

SpaceX Could Trigger Tesla Sell-Off

TV host Jim Cramer shared that the looming SpaceX IPO could trigger a Tesla Inc. (NASDAQ:TSLA) sell-off, as a J.P. Morgan analyst shared a bearish “sell” rating on the stock, predicting a 60% decline in value. Seeing his take, Cramer said that the rating could trigger people selling Tesla “to buy SpaceX.”

Cramer also said that he was worried that the IPO, coinciding with artificial intelligence companies OpenAI and Anthropic‘s possible public debut, could drain capital from the broader market. He urged the debuts to be “spaced out.”

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