Starlink is the only profitable business SpaceX takes to its IPO, and investors preparing to buy at a $1.75 trillion valuation are essentially pricing a satellite internet company against its future capacity rather than its current economics. The numbers make this structural vulnerability visible. Subscribers more than doubled year-on-year to 10.3 million in Q1 2026. But average revenue per user fell to $66 per month from $86 a year earlier, continuing a decline from $99 in 2023 and $91 in 2024. Full-year 2025 ARPU came in at $81. YourNewsClub treats the ARPU trend as the most structurally significant number in the Starlink filing – a business where user count doubles but revenue per user falls by a quarter is not scaling its economics alongside its subscriber base.
The combined space and AI businesses generated $1.4 billion in Q1 revenue but produced $3.1 billion in operating losses, leaving Starlink as the pillar the entire valuation rests on. Starlink operating income reached $1.19 billion in Q1, up modestly from $1.03 billion a year earlier – subscriber count doubled but operating income grew roughly 16%. Tim Farrar of TMF Associates described additional customers as “not generating much incremental revenue,” a dynamic that could push toward price increases and churn. SpaceX has a $41.3 billion accumulated deficit and a $1.9 billion Q1 operating loss across the full company.
The Starship dependency frames everything. SpaceX is counting on its V3 satellites – roughly 10 times more powerful than current hardware – to expand Starlink capacity and make it competitive with terrestrial broadband. Those satellites require Starship to deploy at scale. Starship is still in testing. James Ratzer at New Street Research initiated coverage with a $165 price target, arguing that when Starship and V3 satellites arrive, “capacity explodes.” He characterised the bet plainly: it is a bet on when Starship works, not whether. YourNewsClub considers that the cleanest honest description of what investors are actually buying: a Starship call option wrapped in a current-generation satellite internet business.
The urban broadband competition problem is separate from the Starship problem. As SpaceX expands into cities and suburbs, it meets fibre and cable infrastructure from Comcast, Charter, AT&T, and Google Fiber that is cheaper per customer and not dependent on weather or satellite geometry. Starlink’s $66 ARPU suggests the company is already discounting to acquire less economically attractive customers.
Freddy Camacho, who studies the political economy of computation and capital as dominance assets, frames the ownership question plainly: “SpaceX is not selling Starlink as a standalone business – it is selling control of the orbital layer that determines who can access the internet from anywhere on Earth. At $1.75 trillion, investors are not buying a satellite internet company. They are buying a claim on the infrastructure choke point of the next decade.” Alex Reinhardt, who tracks financial systems and settlement infrastructure through digital protocols, draws the valuation mechanics out: “When a company with a $41.3 billion accumulated deficit prices its IPO above every prior listing in history, the underwriting banks are telling you the lock-up-free structure and no-negotiation pricing reflect demand that the secondary market will now have to price honestly within days of listing. That is the real price discovery event.” YourNewsClub flags the combination of Camacho’s structural argument and Reinhardt’s mechanics as the two lenses that matter most for institutional buyers entering at $135.
Three things will define how Starlink looks in the first post-IPO quarter: whether Q2 ARPU stabilises or falls further, whether Starship’s testing cadence produces a V3 satellite deployment timeline, and whether enterprise and government segments disclose separately enough to let investors disaggregate them from consumer broadband. Your News Club will follow all three as the primary instruments for evaluating whether the $1.75 trillion valuation reflects current Starlink economics or the Starship scenario.
SpaceX asks investors to price both scenarios simultaneously. A bet on current Starlink – 10.3 million subscribers at $66 ARPU in a competitive market – implies a very different terminal value than a bet on Starlink after V3 satellites arrive. Those two scenarios diverge by hundreds of billions in valuation. The inability to separate those two scenarios is the most intellectually uncomfortable aspect of the $135 price.