SpaceX IPO shatters records with $75B raise, hits historic $1.77T valuation

Elon Musk’ SpaceX has shattered the world records after raising $75 billion by pricing the initial public offering (IPO) at $135 per share on Thursday.

As a result of this record-breaking offering, the aerospace company hit a $1.77 trillion valuation, making it the largest IPO ever completed in the United States after surpassing Saudi Aramco’s record set in 2019.

Talking about the market ranking, SpaceX now ranks as the 7th most valuable publicly listed company in the US, eclipsing the Tesla, JPMorgan and Meta Platforms.

The company sold 555.56 million shares and trading debut is expected to begin on Friday, June 12, on the Nasdaq under the ticker SPCX.

What makes this IPO process unconventional is the reservation of 30 percent shares for retail investors, a higher one than the traditional IPOs. Elon Musk retains overwhelming control of the company, holding approximately 82 percent of voting power.

According to Telegraph, Armchair and retail investors placed orders exceeding $100bn for the stock.

With this valuation ranging between $1.77 to $1.8 trillion, Elon Musk has become the world’s first trillionaire. Financial analysts and wealth trackers have long predicted that Elon Musk is on track to become the world’s first trillionaire, though many assumed this milestone hinged on SpaceX launching an initial public offering (IPO). According to recent reports, the IPO saw massive demand, ending up more than four times oversubscribed with retail investors contributing over $100 billion in orders.

Analysts outlook

According to Adam Sarhan, chief executive of 50 Park Investments in New York, “The real test will be how the market digests the IPO over the next several weeks, not just one day. The pricing came in just about right, not too hot, not too cold.”

Rick Meckler, a partner at Cherry Lane Investments, said, “The SpaceX pricing is really in uncharted territory. I’ve never seen the price announced instead of the normal process of price discovery based on orders.”

Some analysts warn that the $135 price point requires significantly optimistic “moonshot scenarios”, fearing that investors might overpay in the process.

Kim Forrest, chief investment officer at Bokeh Capital Partners, said, “The financial forecasts are uncertain because of the reliance on large amounts of government contracts. People buying the stock are buying into the future and mankind escaping the Earth is not really investing in a company.”