SpaceX made a historic debut on the stock market, with shares closing 19% higher at approximately $161, following a smooth launch on Friday. The company, now the sixth-largest in the U.S., saw trading volumes exceed 500 million shares, amounting to about $80 billion, amid concerns over the exchange's capacity to handle such a large IPO.
The landmark IPO, which raised $75 billion, more than double that of Saudi Aramco's 2019 record, has cemented Elon Musk's status as the first trillionaire. Despite SpaceX posting a $5 billion loss last year, the IPO attracted a wide range of investors, including retail investors who received 20% of the allocation.
SpaceX's valuation could rise further if underwriters decide to sell additional shares within 30 days. The company's market opportunity is estimated at $28.5 trillion, with a strong foundation from its space operations and Starlink revenues. Analysts have mixed views on its valuation, with some suggesting a more fair value of around $780 billion.
“SpaceX is not only a record breaker in terms of money raised at a stock market debut, but it has also left other big names for dust. When the starting valuation is already pushing $2 trillion, adding that much value at the click of a finger is impressive.”
Dan Coatsworth, head of markets at AJ Bell
The IPO is expected to trigger a reshuffling of investor portfolios, creating selling pressure on other technology stocks as funds rotate into SpaceX. Shares of other space firms and satellite companies declined sharply on Friday.
SpaceX's inclusion in the Nasdaq 100 is anticipated within a month, which will increase demand for its shares from passive funds and ETFs. This fast-track inclusion is expected to bolster its market presence significantly.
“Seeing the company that I joined when it was just some sketches on paper become this valuable is almost surreal.”
Tom Mueller, founding SpaceX employee
Background
SpaceX's IPO is a culmination of Elon Musk's long-held ambitions in space and technology, rewriting Wall Street's IPO playbook and drawing legions of retail investors into the market. The IPO's success comes amid a backdrop of recent volatility in technology shares, raising questions about the sustainability of AI-linked stock gains.
The successful IPO marks a new chapter for SpaceX and the broader market, with potential implications for future mega-listings from AI companies. Investors will be keenly watching how SpaceX's market performance unfolds in the coming months.
