SpaceX has launched the largest initial public offering (IPO) in history, with the pricing announced on Thursday, valuing Elon Musk’s rocket and satellite company at US$1.77 trillion (A$2.5 trillion).
The shares are expected to begin trading on the Nasdaq exchange on Friday under the ticker ‘SPCX’ in the wake of the offering, which involved the sale of 555.56 million shares at $135 each to raise a record $75 million.
This was disclosed in an update on the SpaceX website in which the company said it had also granted the underwriters of the offer a 30-day option to buy up to an extra 83.3 million shares of its Class A common stock at the IPO price.
The IPO, which was almost three times larger than the previous record holder, Saudi Aramco’s $29.4 billion offer in 2019, was oversubscribed by three or four times with more than $250 billion of bids from investors.
It means SpaceX will be among the world’s 10 most valuable companies as it enters public markets although it is making losses and its business model is heavily dependent on growth in space infrastructure, satellite broadband and artificial intelligence (AI).
If it goes as planned, Musk could become the world’s first trillionaire, cementing his position as the wealthiest person.
“The real test will be how the market digests the IPO over the next several weeks, not just one day,” 50 Park Investments chief executive Adam Sarhan was quoted saying in a Reuters article.
“The pricing came in just about right — not too hot, not too cold. Clearly retail investors are buying and, at this stage, they are a big component of this.”
The company allocated 30% of shares for retail investors, which is higher than usual and reflects the focus of Musk on broad public participation.
SpaceX named Goldman Sachs & Co. LLC, Morgan Stanley, BofA Securities, Citigroup, J.P. Morgan, Barclays, Deutsche Bank Securities, RBC Capital Markets, UBS Investment Bank, and Wells Fargo Securities as book-running managers for the offering.
Allen & Company LLC, Cantor, Needham & Company, Raymond James, Societe Generale, Stifel, William Blair, BTG Pactual, ING, Macquarie Capital (USA) Inc., Mirae Asset Securities, Mizuho, and Santander were named as co-managers.
