$100bn scramble for SpaceX shares: Thousands of UK investors to miss out amid sky-high demand
Thousands of Britons missed out on a full allocation of SpaceX shares in a record-breaking stock market float after orders among retail investors surpassed $100 billion.
Elon Musk’s rockets and artificial intelligence company made history last night by announcing it sold 555.6 million shares at $135 each in the largest initial public offering (IPO) of all time.
This raised $75 billion and valued SpaceX at $1.77 trillion; It put co-founder and boss Musk on the path to becoming the world’s first trillionaire.
Demand for shares has far outstripped supply, with retail investors around the world applying for more than $100 billion worth of shares, according to Bloomberg.
This is well above the $15 billion to $22.5 billion allocated to individuals rather than institutions.
Meanwhile, some of the world’s most powerful institutional investors have flocked in; BlackRock is seeking at least $5 billion worth of shares, while Middle East sovereign wealth funds from Saudi Arabia to Kuwait have applied for between $1 billion and $5 billion.
Big bang: SpaceX IPO The listing is expected to value the rocket firm at $1.75 trillion and make co-founder and boss Elon Musk the world’s first trillionaire
The extraordinary level of demand meant that many retail investors received only a small fraction of what they applied for.
British investors who applied for shares worth around £2,000 or less received the full allocations; This accounts for 61 percent, or three-fifths, of those who participated.
However, those who applied for more than this amount were ‘downsized’ by allocating a maximum of 1,000 shares to any one investor.
With the shares selling for $135 or £100 each, this would have cost around £100,000.
Increasing demand is setting the stage for a wild session as shares begin trading on Nasdaq in New York today.
Disappointed investors may scramble to buy the shares they missed out on, while others may hope to sell at a profit.
‘Every investment management company in the country is talking and thinking about SpaceX,’ said Jed Ellerbroek, fund manager at Argent Capital Management in St Louis, US. ‘We all know Friday’s trading day is going to be crazy.’
The listing will be followed by listings from Claude developer Anthropic and ChatGPT firm OpenAI later this year in a high-stakes test of whether investor appetite for the AI revolution will match industry excitement.
Matt Calkins, chief executive of enterprise software company Appian, told CNBC that today’s SpaceX launch is also ‘a referendum on how much confidence Elon and investors have in this individual entrepreneur.’
Analysts at New Street Research expect SpaceX shares to rise from a list price of $135 to $165 within 12 months, pushing its value to more than $2 trillion; The ‘high-end forecast’ suggests that the stock could reach $330 in the future.
Others aren’t so sure. David Coombs, fund manager at Rathbones Asset Management, said yesterday: ‘SpaceX is undoubtedly one of the most innovative companies of our generation, but extraordinary businesses are not attractive investments at any price.
‘The company is overvalued in every respect. Markets may remain enthusiastic for a while, but eventually valuations will matter.’
Peter Tuz, Chairman of Chase Investment Advisors in the US, said: ‘This is historic. I hope it then trades successfully for the good of the market.
‘If something like this comes along and trades down, it will not only cast a shadow over the market in general, but it will also have a negative impact on other IPOs that will line up over the rest of the summer.’
DIY INVESTMENT PLATFORMS
A.J. Bell
A.J. Bell
Easy investment and ready portfolios
Hargreaves Lansdown
Hargreaves Lansdown
Free fund trading and investment ideas
interactive investor
interactive investor
Fixed fee investment from £4.99 per month
free trade
free trade
Investing in Isa is now free on the basic plan
Trade 212
Trade 212
Free share sales and no account fees
Affiliate links: If you publish a product, This is Money may earn a commission. These deals are chosen by our editorial team because we think they’re worth highlighting. This does not affect our editorial independence.
