SpaceX just showed off its IPO secret weapon

SpaceX is planning the largest IPO ever, which could value Elon Musk’s rocket company at up to $2 trillion.

The numbers are incredible for a company founded in 2002 to make life multiplanetary. A lot has been made of the company’s space-based Wi-Fi broadband product, Starlink, and the potential for data centers in space.

But make no mistake, all of this is enabled by low costs to reach space, and SpaceX’s ace in the hole is its giant, fully reusable rocket, Starship.

On Friday, SpaceX posted a video of the third-generation Starship.

“Version three is what I like to call the foundational design of [Starship] that’s going to give us the capabilities we need to do the missions in front of us,” said Bill Riley, VP of Starship engineering. “It’ll be the one that puts humans back on the moon. It’ll be the one that puts the first bootprints and then city on Mars.”

Starship stands some 408 feet tall, with the booster and upper stage stacked on top of one another. The booster has 33 rocket engines, each producing more than 8,000 tons of thrust. (That’s enough to theoretically lift 100 fully loaded Boeing 737 MAX-8 jets off the ground.)

That also means it can take a lot of cargo into space. Starship is designed to cut the cost of reaching low Earth orbit by as much as 90% compared with SpaceX’s Falcon 9 rocket, which cut the cost to reach space by roughly 95% compared with the Space Shuttle.

Lower costs are ultimately what enabled SpaceX to develop Starlink and will enable it to put AI data centers in space.

“Ship 39 is the first V3 rocket,” says Charlie Cox, director of Starship engineering. “Version 3 is basically a clean sheet design, [addressing test issues] and then we directly address those with a variety of new designs.”

There have been 11 Starship tests. Testing rarely goes smoothly. Some Starship tests ended in what SpaceX calls “rapid unscheduled disassembly.” (That’s an explosion.) There have also been failures with the new booster system. But progress is being made. SpaceX caught the booster with giant mechanical arms during test 5.

The 12th Starship test is likely to happen in late May, which should be about the time SpaceX’s IPO registration statement becomes public and the company starts its IPO roadshow.

Success would be nice. Investors who are about to supply tens of billions of dollars to the company will feel better if Starship development accelerates. Even if the test isn’t flawless, Starship development will remain critical to SpaceX’s efforts to build on its cost advantage, which threatens to disrupt everything from telecom to AI.

Write to Al Root at allen.root@dowjones.com