SpaceX shares gain 20 per cent after record IPO
SpaceX soared more than 20 percent in its Nasdaq debut as investors flocked to the world’s largest IPO and invested in Elon Musk’s sprawling empire, which ranges from rockets to artificial intelligence.
The stock opened for trading at $150 per share, compared to its IPO price of $135 per share.
It was last trading at US$164 and SpaceX’s valuation has risen to over US$2 trillion ($A2.8 trillion), making it the sixth-largest US company by market value, behind Nvidia, Apple, Google parent Alphabet, Microsoft and Amazon.
The deal was under close scrutiny because of risks to the IPO market, which some bankers said could face difficulties if SpaceX shares close below Thursday’s price level.
The company’s launch is widely seen as a dress rehearsal for the next generation of mega-listings; market participants are watching for signals of investor appetite ahead of upcoming IPOs for AI heavyweights Anthropic and OpenAI.
The stock’s performance will be a test of the so-called “Musk premium,” which is the force behind Tesla’s more than $1 trillion valuation.
The landmark listing cemented Musk’s status as the first trillionaire ever and propelled SpaceX among the world’s most valuable companies; even though the company posted losses of nearly $5 billion last year and generated only a fraction of the revenue brought in by similarly valued tech giants.
“I gave SpaceX a 10 percent chance of success,” Musk said shortly before the opening bell in Texas.
SpaceX president Gwynne Shotwell and Chief Financial Officer Bret Johnsen rang Nasdaq’s opening bell at 9:30 a.m.
The record IPO is a culmination of Musk’s long-standing ambitions in space and technology, and he has come forward to rewrite Wall Street’s IPO playbook and attract large numbers of retail investors to the market.
Proceeds from the US$75 billion deal were more than double that of Saudi Aramco’s record-breaking 2019 IPO.
Valuation could rise further if underwriters exercise their right to sell additional shares; this decision is usually made within 30 days of the offering.
Although SpaceX may have to wait to enter the S&P 500, its rapid inclusion in the Nasdaq 100 will soon make it a major holding for passive funds and ETFs that track the index, creating a new source of demand for its shares.
“We have to go back 100 years to find similar entrepreneurs. He’s a visionary unlike any other and an extremely good performer,” said Joel Shulman, CEO of ERShares, which manages an ETF with ties to SpaceX.
Some analysts think SpaceX’s debut will trigger a realignment of investor portfolios and put selling pressure on other tech giants as funds return to the stock.
with DPA
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