SpaceX is reportedly lining up four major Wall Street banks for a potential 2026 IPO. This move could signal the long-awaited reopening of the public markets after a years-long IPO drought. In the meantime, late-stage private companies like SpaceX are finding other ways to create liquidity for employees and early shareholders, largely through a fast-growing secondary market.
To understand what SpaceX’s IPO chatter means, how private liquidity works before a debut, and what investors are looking for in today’s pre-IPO giants, we spoke with Greg Martin, managing director at Rainmaker Securities, a broker-dealer specializing in secondary share transactions for late-stage private companies.
Greg Martin shared his background as the founder and managing director of Rainmaker Securities, which helps large late-stage, pre-IPO companies transact shares in the secondary market. He is also the founder of Archer Capital Group and co-founder of Liquid Stock.
The secondaries business has been booming due to the IPO drought. Private companies are staying private much longer now. Many of these businesses, including companies that would be top 30 in the S&P 500, would historically have gone public years ago. These companies are significant in our economy, and investors want access to them. At the same time, shareholders and executives who have been invested for a long time want to start seeing some liquidity from their shares, which are a high percentage of their net worth. These two forces have created a thriving secondary market, a trend that is growing as more market cap is housed in the private markets.
Regarding a shift in secondary markets if IPOs resume this year, Martin noted that when a company like SpaceX goes public, a massive amount of value leaves the private system. However, he believes it will increase interest in more companies offering liquidity and more investors entering private markets. While SpaceX is unique, many new companies are growing very fast. The trend of opportunity in the private secondary space is growing overall, and the matriculation of SpaceX to the public markets will likely increase capital market interest in private companies.
On the topic of the SpaceX IPO, Martin observed that the IPO market has been dismal since 2021, so the markets are waiting for a bellwether company. SpaceX is clearly such a company, and there is huge interest. SpaceX recently did a tender at an $800 billion valuation, and there is significant interest in buying into the secondary market. Interest is also high in other bellwether companies like ByteDance, Stripe, Databricks, OpenAI, Anthropic, and Perplexity. Martin believes SpaceX could create a reset in the IPO market if it were to go public.
Regarding bid movement, SpaceX has continued to defy gravity. Even during the down periods of 2022 and 2023, it was the one company that continued to price up with every hint of going public. There has been a significant uptick in interest, both in size and price point, already pricing well above the last tender round and getting closer to the discussed potential IPO price.
On Elon Musk’s previous stance about not taking SpaceX public until rockets were flying to Mars regularly, Martin said the company has been private for a long time and he wouldn’t say Musk is racing to go public, although his stance has shifted. We are in a very good market at all-time highs. SpaceX has seen large interest in the private markets, but those markets are constrained. SpaceX has a huge opportunity, dominating the rocket-launching business, building Starlink, developing Starship, and talking about building data centers in space. Given positive market dynamics and massive potential, it makes sense to unlock the rest of the capital markets to help fund their businesses.
Regarding SpaceX’s traditionally tight control over its cap table and national security risks, Martin noted that a public offering would probably be a sliver deal, with only 5% of the company technically available. Things would be out in the open and publicly disclosed so they can see who owns the shares. The question becomes whether entities from adversarial countries have any real control or just economic interests. Elon Musk and a tight-knit group will likely still control the company.
On the perception of a race to IPO, partly due to Musk’s public feud with Sam Altman, Martin said SpaceX’s success will breed imitation. Bezos plans to launch a communication network to compete with Starlink but is far behind. OpenAI has its own capital risks and an insatiable need for capital, making an IPO sensible. SpaceX can be more measured, finding the right time when the market presents itself well, as they have a largely profitable business and dominance in key areas. They are in the driver’s seat and might stay private if there’s a market downdraft.
SpaceX faces its own challenges launching Starship V3, with several aircraft having exploded over the past year. However, as an Elon Musk company, it may do well in terms of stock price based on his name. Martin believes the SpaceX IPO will definitely get a premium multiple due to an Elon halo effect, as he has delivered. People believe in the future he envisions, like a data center in space. That belief will command a premium above typical market rates for a company with SpaceX’s balance sheet and revenue.
However, Martin acknowledges that Elon Musk has not delivered on all his ambitious promises, and others have beaten him to the punch in areas like full self-driving. This will be debated by investors, and putting so much value in the belief that one person can exceed expectations continuously is a big challenge that some will not be comfortable with.
The fact that SpaceX is lining up banks for a 2026 IPO is a pretty big signal. Martin doesn’t think they’re just playing games. However, having conversations with banks doesn’t necessarily mean the IPO is coming this year. Other signals that a company is getting ready to go public include hiring people that portend a more IPO-focused senior executive team, such as a chief accounting officer from a public company, a new CFO with deep public company experience, or beefing up investor relations, accounting, and legal teams. Companies like SpaceX have had public-grade teams for a while.
On how private market valuations typically compare to what companies achieve in their IPOs, Martin said it’s a good sign for private companies to pre-understand their demand. He pushes companies to open up private secondary capability because it’s a great way to develop price discovery well in advance of the IPO, start getting people attached to the business, and open up to a broader investor base. This leads to a more efficient IPO. A company like Figma, which traded up 200% at its IPO, probably didn’t do very good price discovery in advance.
Regarding how secondaries work for an employee with stock options, Martin explained that all private companies are different. SpaceX has tight controls on its cap table to avoid exceeding the shareholder count that would force it to become a public company. SpaceX runs tender offers two or three times a year, providing reasonable liquidity for employees. There is also the SPV world, where people put shares in special purpose vehicles and trade units in those SPVs, allowing economic ownership change without a cap table change. Some companies allow direct share trading, while others prohibit all secondary transactions. Firms like Rainmaker help by getting to know the companies and how they monitor and guard trades to help get transactions done.
On access to information being an investor’s biggest problem in secondary markets, Martin said Rainmaker works with some companies that provide data rooms, allowing access to information. They do their own research on publicly available information and have a view of supply and demand dynamics. They can provide a lot of information but cannot share inside company information unless allowed. The more information provided, the lower the risk for investors, which tends to open up markets.
Sophisticated investors looking to buy pre-IPO shares want to do due diligence across financials and management. They want an understanding of the cap table, share count, preferences, what the price represents, and debt levels. They would love to understand the supply and demand equilibrium. They are more comfortable with public-facing private companies like SpaceX, even without exact historical financials, than with less well-known names.
There is substantial demand for buying secondary shares from other late-stage unicorns. Companies like Databricks, Stripe, OpenAI, Anthropic, xAI, and ByteDance are in high demand. The AI trade continues to be strong for companies like Lambda Labs or Cohere. As companies signal they’re going public, like Discord, Motive, or Canva, people anticipate liquidity, and trading opens up. There are probably 20 to 30 companies on their platform that trade regularly, and that number continues to grow. As the IPO market opens up, that will broaden. Last year was their biggest year, trading over $1 billion worth of secondaries.