In a move that could reshape the landscape of public market listings for tech giants, SpaceX is reportedly considering an unconventional path to going public. Instead of a traditional Initial Public Offering (IPO), Elon Musk's space exploration company might merge with the publicly traded wireless and satellite firm, EchoStar Corporation.
An Unorthodox Path to Public Markets
The speculation, detailed in a Barron's report by Andrew Bary, suggests this idea, while seemingly far-fetched, aligns with Elon Musk's maverick approach to business. The core rationale lies in the existing and significant business relationship between the two companies. In two separate transactions in September and November 2025, SpaceX purchased spectrum from EchoStar for its Starlink satellite broadband service.
These deals, worth approximately $20 billion, included a payment of $11 billion in SpaceX stock. This transaction effectively turned EchoStar into the best publicly traded proxy for SpaceX, with its stock surging 50% to nearly $103 following the news. The deals valued SpaceX at an estimated $400 billion, which analysts believe is only half of what it could command as a public company.
Why a Merger Makes Strategic Sense
A merger with EchoStar, which now owns an estimated over 2% of SpaceX equity representing about half of EchoStar's own value, offers several potential advantages for SpaceX. Firstly, it could allow the company to go public much more quickly than the lengthy traditional IPO process. Reports indicate SpaceX has begun selecting investment bankers for a potential 2026 IPO, but a merger could accelerate this timeline significantly.
Secondly, and crucially for a future-focused company like SpaceX, a merger would permit the use of more forward-looking financial projections when appealing to investors. The S-4 document used in mergers allows greater freedom for future guidance compared to the historically focused prospectus of an IPO. This is vital for SpaceX, as its rumoured sought-after valuation of over $1 trillion hinges on its earnings potential over the next decade.
SpaceX is projected to generate about $15 billion in revenue in 2025, potentially rising to $22 billion or more in 2026. A trillion-dollar-plus valuation would equate to about 50 times its projected 2026 sales, a lofty multiple that requires a compelling narrative about its future growth in Starlink and other space initiatives.
Synergies and a Potential Exit for EchoStar's Founder
From a structural standpoint, tax expert Robert Willens notes the deal could be executed as a tax-free "reverse acquisition", similar to a SPAC transaction, with SpaceX effectively buying EchoStar and the new entity taking the SpaceX name. EchoStar brings valuable assets to the table, including its consumer wireless business Boost (over 7 million customers), the Sling livestreaming TV service, and a satellite TV business, totalling millions more subscribers.
For EchoStar's co-founder, Chairman, and controlling shareholder, Charlie Ergen (72), who controls just over half of EchoStar's stock, a deal would provide a clear exit strategy and liquid stock in a much larger, admired entity. Ergen has publicly praised SpaceX, calling it the "best vendor" in space after a decade of collaboration on satellite launches.
Furthermore, following its spectrum sales to SpaceX and a separate $23 billion deal with AT&T, EchoStar will have a robust balance sheet with about $24 billion in cash and $13 billion in debt. This cash hoard could provide SpaceX with significant capital to invest in Starlink's expansion, which already serves 8 million customers, and other ambitious projects.
While a traditional IPO for SpaceX could incur investment banking fees as high as $500 million, a merger with EchoStar might be less costly. More importantly, it would allow SpaceX to fix its valuation at a mutually agreeable level, avoiding the uncertainty of investor sentiment during an IPO roadshow. Although unconventional, the strategic and financial benefits make this merger idea a serious proposition for Elon Musk to consider.
