Elon Musk‘s SpaceX is expected to debut Starship V3 soon, but a new video posted this week confirmed for the first time that a nitrogen system explosion destroyed the first Version 3 last year.

As the company moves toward what may become the biggest IPO ever, investors are watching whether Musk can deliver on his promises.

What The Video Revealed

Engineers walking through the test site explain that during a nitrogen pressurization test, an explosion took out the rocket.

The test had been designed without propellants on the vehicle, which limited damage to the pad.

The recovery has been bumpier than SpaceX’s public messaging suggested.

A first 10-engine test firing damaged half the engines on a hard shutdown, and the team had to pull all of them and replace them with engines from a third booster.

A follow-up attempt with all 33 engines aborted seconds in after a pad sensor flagged a fault.

Booster 19 finally got a clean 33-engine firing on April 15, clearing the last major test before launch.

Why The V3 Debut Matters For The IPO

Flight 12 will be the first flight of V3 hardware. Payload capacity is expected to climb from roughly 35 metric tons to over 100 metric tons to low Earth orbit, according to SpaceX.

Beyond the payload jump, V3 is engineered for orbital propellant transfer and the deployment of larger Starlink satellites that cannot fit on Falcon 9.

SpaceX has said propellant transfer is the core capability that unlocks lunar and Mars missions, and Starlink revenue is the cash engine behind the IPO valuation.

Polymarket traders are pricing an 88% probability that SpaceX delivers the largest IPO of 2026. NYU Stern professor Aswath Damodaran valued the space company at $1.3 trillion.

Kalshi traders give Flight 12 a 70% chance of lifting off before June, on roughly $1.5 million of volume. The “Before May” leg of the same contract has collapsed from around 75% in January to under 1%, with the steepest drop in mid-March as the timeline slipped.

The Tesla Read-Through

Tesla Inc. (NASDAQ:TSLA) is the cleanest public proxy on the Musk space-AI stack.

Tesla overrode a shareholder vote in January to put $2 billion into xAI, which SpaceX then absorbed in February, giving Tesla shareholders indirect exposure to whatever V3 unlocks for the broader Musk-related ticker complex.

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