The SpaceX IPO drama explained

SpaceX is preparing to go public later this week, and the debut will mint it as one of the largest companies in the world. It will be the biggest initial public offering ever. That big splash in the markets raises a question that is less about extending human consciousness beyond Earth and more about whether SpaceX is receiving special treatment from its stock exchange. The Indicator from Planet Money hosts Ricky Molfi and Darien Birds look at the SpaceX IPO and a rule change that, as they put it, "turns math upside down."

Why SpaceX is going public now

SpaceX is offering only about 4% of its shares in the IPO. The rest remains owned by Elon Musk, employees, and private investors. Alex Maturi, former CEO of S&P Dow Jones Indices, explains that the purpose of going public has shifted. Historically, IPOs were a way for young companies to raise capital to build factories and expand. Now, companies like SpaceX can grow into trillion-dollar behemoths using private dollars. "An IPO has always been a way to cash out earlier investors," Maturi says, but the balance has changed. SpaceX doesn't need your retirement money to build its next rocket. Instead, the IPO gives early investors a chance to liquidate their shares and puts a true price on the company. The small slice offered to the public is essentially a pricing mechanism for the whole thing.