SpaceX IPO Set for June 12 at $135 per Share, $1.77T Valuation

SpaceX will debut on the Nasdaq on June 12 under the ticker SPCX, priced at $135 per share. The offering will raise $75 billion with a $1.77 trillion valuation, making it the largest IPO ever. Elon Musk will own 42% of the company after the listing, putting his total wealth above $1 trillion when combined with his Tesla holdings.

Record-Breaking Valuation Reshapes IPO Market

SpaceX priced its IPO at $135 per share with 555,555,555 shares outstanding, creating a $1.77 trillion market value. This surpasses Saudi Aramco’s 2019 IPO, which valued the oil giant at $1.7 trillion and raised $26 billion. The rocket and satellite company will trade on Nasdaq under ticker SPCX starting June 12. Investment banks underwriting the deal report immense demand from institutional and retail investors.

Musk’s Wealth Set to Cross $1 Trillion Mark

Musk’s 42% stake in SpaceX alone is worth $866.5 billion at the IPO price. Combined with his Tesla holdings of approximately $355 billion in stock and options worth over $100 billion, his total wealth exceeds $1.1 trillion. This would make him the world’s first trillionaire, surpassing all but 20 countries in annual economic output. Only Manhattan’s gross domestic product of $1 trillion in 2024 comes close to this personal wealth figure.

Retail Access and Pricing Strategy Break Wall Street Norms

SpaceX is allocating as much as 30% of shares to retail investors, an unusually large portion compared to typical IPOs. Five online brokers—RobinHood Markets, SoFi Technologies, Charles Schwab, Fidelity, and E*TRADE from Morgan Stanley—are offering shares at the $135 IPO price. The company set this price before investor roadshow meetings, departing from standard practice where pricing adjusts based on feedback. However, allocation is not guaranteed, and investors may not receive all requested shares.

Historical Data Warns of Long-Term Underperformance

IPO stocks jump an average of 25% on their first trading day, according to Jay Ritter, director of the IPO Initiative at the University of Florida. However, the 10 largest U.S. IPOs on record have underperformed the S&P 500 by 96 percentage points since listing. Investment banks report immense demand, but analysts suggest investors may be better served buying an S&P 500 index fund instead. SpaceX trades at 92 times sales, a premium valuation compared to most public companies.

Final Thoughts

SpaceX’s $75 billion IPO on June 12 marks a historic moment for public markets, but historical patterns suggest caution. Large IPOs typically underperform the broader market long-term, despite strong first-day rallies.

FAQs

Disclaimer:

The content shared by Meyka AI PTY LTD is solely for research and informational purposes.  Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.