SpaceX Got $90 Billion in Orders for a $25 Billion Bond Sale Less Than 2 Weeks After Its IPO. Is That a Good Sign or a Warning?

Space Exploration Technologies (NASDAQ: SPCX), or SpaceX, continues to make its mark on the markets as one of the most highly traded stocks. There are a lot of heated opinions about whether it makes sense to buy it today, and the company keeps announcing new deals that change the equation.

This week, it announced that it would issue $25 billion in bonds, less than two weeks after its record-shattering initial public offering (IPO) on June 12. Bloomberg reported that there were $90 billion in debt orders. Is that a vote of confidence in the young stock or a massive warning?

What's SpaceX doing with all of this money?

The SpaceX IPO was the biggest ever, by far. It set out to raise $75 billion, but with the extra shares it offers underwriters in the event of high demand, it ended up raising $85.7 billion.

On top of that, it's issuing $25 billion in debt, which means it raised $111 billion in less than two weeks. And both of these issues were oversubscribed. Bloomberg had reported that the IPO was oversubscribed by more than four times, which means that there was incredible demand for it, and now it had orders for more than three times the amount of its bond issuance.

Image source: Getty Images.

The company already made a big move with some of the IPO proceeds, announcing that it would acquire coding company Cursor last week for $60 billion. Although, as its name implies, SpaceX has several space-related segments, its largest opportunity is in artificial intelligence. SpaceX merged with Elon Musk's xAI early this year, and even though it's a money-losing business right now, Musk and company are trying to build it into a formidable AI player.

The Cursor acquisition, in addition to adding powerful new capabilities to xAI, is also growing at a fast pace, which adds some growth juice to the company's total. SpaceX revenue increased only 16% year over year in the first quarter, hardly what you'd call a high-growth stock.

As for the bond money, management had already apprised investors that it planned to issue debt to cover a $20 billion bridge loan that becomes due in September 2027, with the remainder going to general corporate uses.

Why are investors so excited about SpaceX?

SpaceX fans are willing to fund the company's endeavors because they think that SpaceX is developing important technology for the future. They're big believers in Musk and his plans, and those plans need funds if they're going to get off the ground (literally) and change the world.

Even though some of Musk's ideas sound out of this world, he has been involved in several transformative companies, including PayPal Holdings and Tesla, both of which were pioneers in what are now mundane, mainstream industries. SpaceX's Starlink, for example, uses satellite technology to bring broadband internet to areas around the globe that aren't served by land-based services. Starlink is growing and profitable, and investors envision Musk pulling off even more revolutions in space travel and living.

SpaceX's ability to raise so much money is certainly a good sign for the company. It can tap into this fan base to achieve its goals, and if it runs short on money, it has willing partners.

But it may be a warning for shareholders. Eventually, the money might run out, and that could be before SpaceX puts practical products on the table and turns a profit.

The SpaceX sheen may already be wearing off, as the stock is down 17% this week, as of this writing.

Personally, I'd be quite wary of SpaceX's continued fundraising and spending until there's higher growth and a practical path to profitability.

Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends PayPal and Tesla. The Motley Fool recommends the following options: short June 2026 $50 calls on PayPal. The Motley Fool has a disclosure policy.