Elon Musk's SpaceX is preparing for what could become the largest initial public offering in history, with the rocket and satellite giant seeking to raise $75 billion at a valuation of about $1.75 trillion. Investor appetite has been overwhelming, with demand reportedly running at nearly four times the shares on offer, per Reuters. The listing presents public market investors with a rare opportunity to own a stake in what many view as the crown jewel of Musk's business empire. SpaceX today is far more than a rocket company. Its operations span satellite internet through Starlink, commercial space launches, defence contracts and, increasingly, artificial intelligence infrastructure.Yet, behind the excitement surrounding the blockbuster IPO lie several risks that investors may want to weigh carefully before buying into the story.1.) Bleeding lossesThe enthusiasm around SpaceX comes despite the company continuing to report losses. For 2025, SpaceX posted revenue of $18.67 billion and a net loss of $4.94 billion. Investors are effectively betting on the company's future rather than its current earnings power. The investment case rests on the growth potential of satellite broadband, launch services, defence contracts and AI-linked opportunities, rather than present-day profitability.2.) SpaceX IPO overvalued?SpaceX is expected to begin trading on the Nasdaq in a little over two weeks, with its market debut potentially becoming the largest IPO ever. However, analysts at Morningstar have raised concerns over the company's proposed valuation. In a note published on Monday, the research firm said SpaceX appears "significantly overvalued" and suggested investors may find more attractive entry points after the stock begins trading.Morningstar also flagged uncertainty around the future profitability of SpaceX's xAI business, noting that the range of potential outcomes remains wide. The analysts described the unit's economic moat as "indeterminate" and warned that it could pose a "material threat of value destruction" for the company.3.) Most power remains with Elon MuskEven after the company goes public, control of SpaceX will remain firmly in Musk's hands. Regulatory filings show Musk will retain approximately 82.4% of voting rights through his Class B shares, which carry ten votes per share. In effect, he will command roughly 82% of the company's total voting power, giving him overwhelming influence over key corporate decisions.Public investors, meanwhile, will receive Class A shares, which carry one vote per share.4.) Looming debtSpaceX's balance sheet also warrants attention. According to a Reuters report citing regulatory filings, the company took out a $20 billion bridge loan in April to refinance a substantial portion of its existing debt ahead of the IPO.The borrowing came from a syndicate of lenders that was not identified in the filing. Under the terms of the loan, SpaceX could be required to use proceeds from the IPO to repay the debt if it is not settled through other funding sources within six months of the offering.5.) Growing competitionThe race to commercialise space is becoming increasingly intense. Private players such as SpaceX and Blue Origin are competing aggressively to lower launch costs, expand satellite-based services and secure government contracts.A major pillar of SpaceX's business is Starlink, the world's largest satellite operator. The broadband network, comprising about 10,000 satellites, provides internet connectivity to consumers, enterprises and government customers across the globe.While SpaceX remains the dominant player in many areas of the commercial space industry, intensifying competition means the company will need to continue investing heavily to maintain its leadership position.For investors, the IPO offers exposure to one of the world's most closely watched technology and aerospace companies. However, alongside the promise of future growth come questions around valuation, profitability, debt and governance that may prove just as important once the stock begins trading.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)