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Introduction: SpaceX raises $75bn in world’s biggest IPO
Good morning. Elon Musk’s SpaceX will touch down on the US stock market today after successfully conducting a record-breaking initial public offering, but will its shares head towards the moon?
Shares in the rockets-to-satellites-to-AI company will begin trading in Wall Street today, after SpaceX raised $75bn through its IPO.
The listing will put SpaceX among the largest public companies, and could see Musk declared the world’s first trillionaire later today.
Last night, SpaceX announced it had has raised $75bn in a record-breaking initial public offering, which values the company at $1.77tn. It successfully sold 555,555,555 shares of its Class A common stock, at $135.00 per share.
Banks underwriting the deal have also been given an “over-allotment option” to buy an extra 83.3m shares, which would pump up the size of the IPO to about $86bn.
SpaceX attracted orders for more than three times the amount on offer, the Financial Times reports – with strong demand from institutions and also retail investors. That could help propel SpaceX’s shares up today, as those who missed out in the IPO (or didn’t get as many shares as they wanted) try to get on board.
This strong demand came despite concerns that the company was overvalued – being sold at 92 times last year’s revenues (a hefty valuation).
Investment research group Morningstar claimed earlier this week that SpaceX was worth only $63 a share – less than half the IPO price of $135 – and warned there is “a major disconnect between market expectations and underlying fundamentals”.
Michael Field, the chief equity strategist at Morningstar, suggests investors should sit out the IPO and wait for “a more attractive entry point down the line”.
All eyes will be on the US markets today to see how SpaceX’s shares perform….
The agenda
-
7am BST: UK GDP report for April
-
2.30pm BST: US stock market trading begins
-
3pm BST: University of Michigan Consumer Sentiment survey
Key events
SpaceX’s blockbuster IPO today, and upcoming floats from artificial intelligence companies Anthropic and OpenAI, will be a major test for the stock market as investors are hit by a wave of equity supply.
Joe Maher, markets economist at consultancy Capital Economics, points out that booming share issuance can be a sign that market speculation is reaching fever pitch.
That rising supply may also overwhelm investor demand and help to push stock prices lower.
Maher told clients:
Recent history suggests surging share issuance tends to be a sign that the end to an equity boom is a matter of months not years away. After all, gross issuance surged towards the end of the last three major equity booms and peaked broadly in line with the stock market on those occasions. [See Chart 2, below].
With share issuance booming once again, the AI-driven equity rally may well be entering its final stages.
Although the market’s attention will be on SpaceX today, the true success of its float will be judged in the months ahead.
Samuel Kerr, global head of ECM at Mergermarket, says the important question is how its shares hold up over the longer term, not simply whether it jumps today.
Kerr points out:
In the next six months, a far greater number of shares than were sold in the IPO will become freely tradeable as various lock-up restrictions on existing investors expire. SpaceX has a rare staggered lock-up expiry period designed to prevent a huge wall of selling at one fixed point, but this could still translate to hundreds of billions of dollars of shares from existing investors hitting the market in a short period of time.
The first lock-up waiver will also coincide with SpaceX’s first results as a public company in late July/early August, where investors will get the first indication of whether the company is hitting its ambitious growth targets.”
Elsewhere in the space world, Japan successfully launched its flagship H3 rocket earlier today.
The launch came after a previous mission to put a geolocation satellite into orbit ended in failure.
The Japan Aerospace Exploration Agency (JAXA) reported that the rocket carrying six small satellites blasted off at 9:53 am (0053 GMT) from Tanegashima Space Center in southern Japan.
The H3 was developed to boost the international competitiveness of Japan’s rocket industry, but Japan’s planned launch rate runs far behind SpaceX’s.
AFP explains:
The agency is targeting up to eight H3 launches a year – still far below privately owned SpaceX, which dominates the global satellite launch market with 165 Falcon 9 orbital flights in 2025, compared to just two for H3.
UK pensioners will be riding the SpaceX IPO
The ‘forced buyers’ who will have to buy shares in SpaceX once it is added to stock market indices such as the Nasdaq (see earlier post) will include UK pensioners, investment experts are warning.
Professor Iain Clacher, Ashok Gupta and Dan Hedley of New Capital Consensus (a group pushing for reform of the UK investment system) are concerned that the 11mn people enrolled in UK defined contribution default funds will be exposed to SpaceX.
In a letter to the Financial Times this morning, they explain:
Nasdaq’s fast-entry rule pulls SpaceX into the Nasdaq-100 index after 15 trading days rather than 63. FTSE Russell has gone further. S&P Dow Jones, to its credit, has held the line.
The mechanical consequence, on our modelling, is that roughly $17.7bn of passive demand will be conscripted into SpaceX on day 15 — of which about $3.9bn comes from MSCI World-tracking vehicles, the benchmark to which the great majority of UK DC default funds are anchored.
Clacher, Gupta and Hedle also point out that the practice of investing UK pension funds in indices such as the Nasdaq, or the MSCI World index, is “mechanically exporting British pension capital” to the balance sheets of the UK’s competitors.
They explain:
The uncomfortable truth is that, for the British DC pensioner the cost is being collected automatically through a default fund whose architecture was never designed for an index whose rules are now being rewritten around a single generation of megastar listings.
Shares in investment funds that hold SpaceX stock are rising in pre-market trading ahead of SpaceX’s stock market listing today, Reuters has spotted.
That includes Fundrise Innovation Fund, who are up 9.5%, and Destiny Tech 100 which has gained almost 6%.
SpaceX’s shares will be supported by a number of “forced buyers”, such as tracker funds.
Richard Hunter, head of markets at interactive investor, explains:
The Nasdaq index has tweaked its rules, which has allowed SpaceX to join the index on a fast-track basis. It remains to be seen whether the company will have a disproportionate effect on the index in terms of weighting, but in any event its inclusion guarantees some additional and significant buying pressure.
SpaceX appears to have chosen a good day to join the US stock market.
Equity markets around the world are rallying today, after Donald Trump claimed that the US and Iran are on the verge of signing a peace agreement and announced that he will cancel fresh missile strikes.
Stocks rallied in Asia-Pacific markets overnight, lifting Japan’s Nikkei 225 by 2.8%.
In London this morning, the FTSE 100 index of blue-chip shares is up 1.5%, or 151 points, at 10,455 points.
Wall Street is on track to open a little higher, after rallying strongly after Trump’s comments.
Susannah Streeter, chief investment strategist at Wealth Club, says:
“Risk-taking is back in fashion at the end of another volatile week, helped by renewed confidence that the conflict with Iran may soon end.
President Trump’s promises are again moving markets, with investors buoyed by his assertion that a deal could be reached as soon as this weekend. The hotly anticipated SpaceX IPO is feeding the frenzy, with high hopes that aerospace and AI will cross bountiful new frontiers in the future.
Marex Financial, who have handled the UK retail element of SpaceX’s IPO, have reported that just over 60% of UK investors who applied for shares have received their full allocation.
Those who wanted more than about £2,000 of shares, though, won’t get as much as they hoped.
Marex explain:
Investors in the Retail Offer who applied for up to $2,700 (£2,013) have been allocated in full, rounded down to the nearest whole Share. Those who applied for more than this amount have been scaled back, with a maximum of 1000 Shares being allocated to any such investor.
This means 61 per cent. of investors in the Retail Offer have received a full allocation.
A poll by Opinium has found that one in four Gen Z and Millennial investors in the UK say they have applied for shares in SpaceX or will buy shares on the day of the IPO.
One in seven (15%) of all UK investors say they have applied for shares or will buy them on the day of the IPO, which is on track to become the largest in market history. Male investors (18%) are also more likely than female investors (10%) to say that have or will buy SpaceX shares.
Analysts at Unicredit say that the stock-market debut of SpaceX is more than an IPO story, adding:
It is a reminder that space is increasingly becoming Earth’s critical economic infrastructure – and that the US is setting the pace in the commercial and geopolitical space race.
SpaceX shares soar in shadow trading ahead of official float
SpaceX’s shares are surging in ‘shadow’ financial markets, indicating that its value could surge by 35% when trading begins later today.
Derivatives offered by online brokerage IG are indicating SpaceX’s market value could surge to around $2.4tn, up from the $1.77tn valuation set by last night’s IPO pricing.
That implies that SpaceX’s shares might jump to around $180 when trading begins, cement Musk’s trillionaire status.
Bloomberg have spotted a second market which also implies SpaceX’s shares might pop:
SpaceX-tied perpetual futures, contracts that don’t expire, on crypto venue Hyperliquid were trading around $180, implying a valuation of more than $2.3 trillion.
Forbes: Elon Musk is on the verge of becoming a trillionaire
Forbes has calculated that Elon Musk is on the verge of becoming a trillionaire thanks to the pricing of SpaceX’s record-breaking IPO.
That’s if you add Musk’s stake in SpaceX to his holding in Tesla, which they calculate means Musk is now worth $982bn.
Forbes explain:
Musk, who serves as chairman, CEO and chief technical officer of SpaceX, owns 4.8 billion shares of the rocketmaker, worth $644 billion. He has another 350 million stock options with an exercise price of $8.40 per share, worth $44 billion, giving him a 38% stake in the company, worth $688 billion at the IPO price
They add:
Musk also owns just over 10% of $1.5 trillion (market cap) Tesla, worth $165 billion, plus options to acquire another nearly 8% stake, worth $114 billion.
So SpaceX’s shares only have to rise slightly when they start trading on the US stock market, to around $138.50, to give Musk the title of the world’s first trillionaire.
Giant inflatable Elon Musk warned of Grok dangers
The SpaceX IPO also led to an unusual protest yesterday in New York.
A 40-foot high giant inflatable of Elon Musk, smiling and shirtless, appeared at Times Square. It was created by the Safe AI Now (SAIN) coalition, to warn of the dangers of SpaceX’s AI assistant Grok.
SAIN say:
The enormous inflatable of Musk is meant to draw attention to a serious issue: SpaceX’s Grok has been widely used to generate illicit images of real people – including children. In fact, a NYT report found that of the 4.4 million images Grok pushed out in a recent nine-day period, an estimated 65% were sexualized or explicit. There are entire online communities, with hundreds of thousands of visitors each week, dedicated to sharing Grok-generated pornography and tips for explicit content generation.
While this inflatable is a fitting metaphor – much like Musk and his companies, it is inflated, full of hot air, and could pop at any minute – it serves as a warning to investors eager to buy into Musk’s SpaceX IPO on Friday morning. Because the reality is, shareholders’ investment in SpaceX means financially supporting a company that has been involved in child exploitation, revenge porn, and worse.
In March, three teenage girls in Tennessee, two of whom are minors, filed a lawsuit against xAI alleging that its Grok image generator used photos of them to produce and distribute child sexual abuse material.
Last week, UK MP Jess Asato took legal action against Elon Musk’s xAI company after saying its Grok tool helped a user produce fake sexualised pictures of her.
Analyst: Space X float is huge
Today may go down in history as the day Elon Musk could become the world’s first trillionaire, and the day SpaceX blasted off into the public markets, says Ipek Ozkardeskaya, senior analyst at Swissquote:
The company already made history yesterday by selling 555.6 million shares priced at $135 each, raising the $75 billion that it was looking for and giving the company nearly the $1.8 trillion valuation that it was targeting. It equals the combined value of the 29 biggest IPOs in US history since 2000 – adjusted for inflation – including Meta, Google, Hilton, Airbnb, DoorDash, Uber, Snowflake and GM.
Yes, it’s huge. So today, everyone will be watching SpaceX leave the launchpad. In yesterday’s note, I discussed in detail what to expect from this IPO today, and in the coming weeks and months, for those who are interested in what the future could hold for the company and for the rest of the market.
Introduction: SpaceX raises $75bn in world’s biggest IPO
Good morning. Elon Musk’s SpaceX will touch down on the US stock market today after successfully conducting a record-breaking initial public offering, but will its shares head towards the moon?
Shares in the rockets-to-satellites-to-AI company will begin trading in Wall Street today, after SpaceX raised $75bn through its IPO.
The listing will put SpaceX among the largest public companies, and could see Musk declared the world’s first trillionaire later today.
Last night, SpaceX announced it had has raised $75bn in a record-breaking initial public offering, which values the company at $1.77tn. It successfully sold 555,555,555 shares of its Class A common stock, at $135.00 per share.
Banks underwriting the deal have also been given an “over-allotment option” to buy an extra 83.3m shares, which would pump up the size of the IPO to about $86bn.
SpaceX attracted orders for more than three times the amount on offer, the Financial Times reports – with strong demand from institutions and also retail investors. That could help propel SpaceX’s shares up today, as those who missed out in the IPO (or didn’t get as many shares as they wanted) try to get on board.
This strong demand came despite concerns that the company was overvalued – being sold at 92 times last year’s revenues (a hefty valuation).
Investment research group Morningstar claimed earlier this week that SpaceX was worth only $63 a share – less than half the IPO price of $135 – and warned there is “a major disconnect between market expectations and underlying fundamentals”.
Michael Field, the chief equity strategist at Morningstar, suggests investors should sit out the IPO and wait for “a more attractive entry point down the line”.
All eyes will be on the US markets today to see how SpaceX’s shares perform….
The agenda
-
7am BST: UK GDP report for April
-
2.30pm BST: US stock market trading begins
-
3pm BST: University of Michigan Consumer Sentiment survey
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