Elon Musk’s Space Exploration Technologies Corp. has priced its initial public offering at $135 per share ahead of one of the most hotly anticipated market debuts in living memory.
The rocket company reportedly sold 555.6 million shares at that price, netting it a staggering $75 billion. Underwriters have the option to buy an additional 83.33 million shares at the IPO price in the next few days, amounting to an additional $11.2 billion. The sale leaves Musk with 82.4% of the company’s total voting power through his ownership of 5.22 billion Class B shares.
Normally in IPOs, share issuers will offer a price range that enables companies to gauge the level of demand from investors, but SpaceX took a different approach, holding a series of meetings with prospective investors leading up to its roadshow launch. Goldman Sachs served as the lead banker in the sale, followed by Morgan Stanley, JPMorgan Chase, Citigroup and Bank of America.
The $135 share price values SpaceX at $1.77 trillion ahead of its debut on the Nasdaq on Friday, which would make it the seventh-largest publicly traded company in the U.S. in terms of market capitalization. The sale breaks the previous record for the largest-ever IPO held by state-run oil giant Saudi Aramco, which raised $25.6 billion on Riyadh’s exchange in December 2019, valuing it at $1.71 trillion.
SpaceX is now more valuable than another of Musk’s companies, Tesla Inc., which is currently valued at around $1.6 trillion. It will start trading on the Nasdaq under the ticker symbol “SPCX” starting Friday.
As active trading gets underway after the bell, SpaceX’s share price may sink or rise. But anecdotal reports suggest that big institutional investors and individual buyers are lining up to purchase shares in the 24-year-old rocket company. Hyperliquid, a cryptocurrency betting market that attempts to offer synthetic exposure to SpaceX stock, currently prices the shares at $167, suggesting that market participants expect a classic 20% IPO pop on the first day of trading.
Musk previously merged SpaceX with xAI, the artificial intelligence firm that makes the Grok chatbot, in a February move that valued the combined entity at $1.25 trillion. It came after xAI was merged with the social media platform X, formerly known as Twitter. Tesla also owns 18.99 million shares in SpaceX, which are valued at $2.56 billion at the IPO price.
Despite its sky-high valuation, SpaceX’s IPO paperwork revealed its not profitable at this time. The only part of its business that’s currently generating a profit is Starlink, its satellite internet service provider, which is also its biggest revenue engine. It boasts a dominant market position in the space-based internet sector, with more than 10.3 million consumer broadband subscribers globally. On the other hand, the company’s space and artificial intelligence segments generated $1.4 billion in first-quarter revenue, according to the filing, while operating losses stretched to $3.1 billion during the same period.
However, even Starlink faces significant hurdles to expansion, which makes it tricky for investors to determine what is a reasonable price for SpaceX’s shares. That’s because the company is relying on its new Starship rockets (pictured), which are still under development and will be the largest ever built or launched, to deploy its new V3 satellites and expand the service. But Starship is still being tested and has so far only carried dummy payloads into space.
In its IPO filing ahead of the sale, SpaceX revealed it has racked up a deficit of $41.3 billion since its founding in 2002, with its operating loss running to $1.9 billion during the first quarter. So far, it has spent more than $15 billion on the development of Starship.
SpaceX’s IPO is the first of three massive public market debuts this year, with the AI companies Anthropic PBC and OpenAI Group PBC also set to launch IPOs later this year. Anthropic is believed to be just ahead of its rival at this time, having confidentially filed its IPO paperwork with the SEC just over a week ago, followed by OpenAI earlier this week.
Following its public market debut, the next big move from SpaceX could be a merger with Tesla. This is reportedly believed to be one of Musk’s biggest long-term goals, and he has reportedly discussed the possibility with senior employees at both SpaceX and Tesla.
Photo: SpaceX
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