Elon Musk’s SpaceX records blockbuster debut at Wall Street: $75 billion IPO at $135 a share
SpaceX on Thursday priced its largest-ever U.S. initial public offering at $135 per share, making Elon Musk’s rocket and spacecraft maker one of the world’s most valuable companies.
The IPO raised a record $75 billion from the sale of 555.56 million shares, valuing the space, satellite and artificial intelligence provider at $1.77 trillion; This is a record number for an initial public offering. Reuters reported last week that the firm set the price at $135.
Thursday’s pricing caps a months-long effort to deliver Musk’s most ambitious project yet, even as it bucks a handful of financial conventions and has some analysts questioning whether its high valuation is justified.
Real Test
SpaceX will rank seventh among U.S.-listed firms when its shares begin trading on Nasdaq on Friday; but it lost money last year, far outpacing the income of other majors.
That gives the company more value than a variety of firms like JPMorgan Chase, Berkshire Hathaway and Eli Lilly, as well as tech giants like Meta Platforms and Musk’s own Tesla.
“The real test will be how the market digests the IPO over the next few weeks, not just one day,” said Adam Sarhan, managing director at 50 Park Investments in New York. “The pricing felt just about right, not too hot, not too cold. Clearly retail investors are buying and they’re a big component of that at this stage. We should see follow-through after the first day of trading.”
Wall Street’s most sensational debut
The sale broke the previous record for the largest-ever IPO of state-run oil giant Saudi Aramco, which raised $25.6 billion on the Riyadh stock exchange in December 2019, valuing it at $1.71 trillion. In inflation-adjusted terms, Aramco raised $33.2 billion for a valuation of $2.21 trillion.
SpaceX’s $1.77 trillion valuation, based on 13.08 billion shares outstanding, could rise even higher if underwriters exercise their rights to sell additional shares; this decision is usually made within 30 days of the offering. Reuters previously reported that SpaceX was seeking a valuation of $1.75 trillion.
The company reported its IPO price in a “free writing prospectus” filed with the Securities and Exchange Commission just after 3 p.m. EDT (1900 GMT), when its pricing meeting with bankers ended and U.S. markets were still open.
SpaceX issued a press release half an hour later. Typically, the pricing meeting and announcement of the IPO price occurs after regular trading closes at 4:00 p.m. because issuers of securities are wary of price movements or news affecting the sale of shares during normal trading. This communication is the latest example of Musk making his most sensational debut on Wall Street on his own terms.
For Mom and Pop investors
SpaceX allocated 30 percent of the shares to retail buyers; It was an unusually large figure and set Thursday’s offering price ahead of the promotional round that bankers and investors have long used to negotiate IPO terms.
“SpaceX pricing is really in uncharted territory. I’ve never seen the price announced rather than through the normal price discovery process based on orders,” said Rick Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey. “There’s such an emphasis on retail that it’s probably a little complacent about pricing.”
Musk also pushed for early inclusion of SpaceX shares in the index, which would create a broader buyer base, with mixed results, and structured the company’s management to maintain strong founder control. Musk will retain 82% of SpaceX’s voting rights after the IPO. The U.S. IPO market is set to rebound sharply this year after previous volatility.
Goldman Sachs predicts revenues could quadruple to a record $160 billion in 2026, thanks to a pipeline that includes not only SpaceX but also artificial intelligence companies OpenAI and Anthropic.
Uncertain financial forecast
SpaceX said last week it had signed a multi-year cloud services agreement with Alphabet’s Google, securing computing capacity at a time of increased competition.
Founded in 2002, SpaceX defines its mission as “creating the systems and technologies necessary to make life multi-planetary, understand the true nature of the universe, and spread the light of consciousness to the stars.” SpaceX said the market opportunity has reached $28.5 trillion, the largest figure in human history.
Stating that the space operation is responsible for more than four-fifths of the mass launched into orbit in the last three years, the company stated that the Starlink internet unit connects “millions of consumers, corporate and public customers in 164 countries, regions and other markets.” Starlink currently accounts for most of SpaceX’s revenue.
The lion’s share of the default addressable market comes from xAI, which is widely thought to be running OpenAI and Anthropic; but SpaceX says the combination of AI computing infrastructure, model, and access to real-time data on the X “creates a significant strategic advantage.”
“Financial forecasts are uncertain due to the reliance on large amounts of government contracts,” said Kim Forrest, chief investment officer at Bokeh Capital Partners in Pittsburgh. “People buying the stock aren’t actually investing in a company, they’re buying the future and humanity is running away from Earth.”
Obstacles to the company’s massive valuation include efforts by rivals such as Jeff Bezos’ Blue Origin to accelerate the commercialization of space and pursue government contracts to open new markets beyond Earth.
Investors will have a chance to see the market’s reaction starting Friday, when many analysts expect the stock to open in the afternoon given the size and complexity of the deal.
“A lot of IPOs run in the 10-15% range, and this deal generates a lot of excitement, so anything less than a 10% return would be disappointing,” said Matt Kennedy, senior strategist at IPO-focused research and ETF provider Renaissance Capital. “If it goes up more than 50%, that would tell me it’s trading on pure excitement.”
Goldman Sachs, Morgan Stanley, BofA Securities, Citigroup and JP Morgan will serve as joint book-running managers for the IPO.
