SpaceX's IPO receives orders several times greater than the available shares.
**TL;DR** SpaceX’s IPO, valued at $75 billion, is significantly oversubscribed, with several investors placing individual orders exceeding $10 billion. The shares are set to be priced at $135 each, bringing the company's valuation to around $1.8 trillion. Morningstar estimates the company's value at about half that amount.
The IPO has generated strong interest from institutional investors, with demand for shares far exceeding what is available, as reported by sources familiar with the situation. Numerous investors have submitted orders of $10 billion or more.
Leaders of the deal informed investors on Tuesday that demand had risen after meetings with management, with the offering being characterized as heavily oversubscribed. The deadline to submit institutional orders is 4 PM New York time on Wednesday.
**The Numbers**
SpaceX is offering 555.6 million shares at a set price of $135 each, aiming to raise around $75 billion and achieving a valuation of approximately $1.8 trillion. This would mark the largest IPO in history, surpassing Saudi Aramco's $29.4 billion debut in 2019.
Banks involved have indicated that allocations among institutional investors will primarily cater to large investment management firms. Up to 30% of the offering is reserved for retail investors, who can still submit orders on certain platforms beyond Wednesday.
**The Roadshow**
On Tuesday, Morgan Stanley is hosting around 300 institutional investors at its New York headquarters for discussions with SpaceX President Gwynne Shotwell and CFO Bret Johnsen. Goldman Sachs, Morgan Stanley, Bank of America, Citigroup, and JPMorgan are spearheading the deal, with 18 other banks participating.
The shares will be listed on Nasdaq and Nasdaq Texas under the ticker symbol SPCX. The IPO will price on June 11 and commence trading on June 12.
**The $3.6 Trillion Pipeline**
SpaceX is not going public in isolation; Anthropic filed for an IPO confidentially last week, while OpenAI filed on Monday. Collectively, these three companies could potentially contribute $3.6 trillion in market value to U.S. stock exchanges, according to Bloomberg.
The concentration of AI-related IPOs in a single season is unprecedented. Whether institutional investors can handle $75 billion from SpaceX, along with whatever funding OpenAI and Anthropic secure, without affecting the AI market will be observed in real time over the coming months.
**What the Demand Signals**
The high level of oversubscription indicates that the IPO is likely to price at or above the set $135 price and may rise on the first day of trading. The substantial $10 billion orders imply that the largest sovereign wealth funds and institutional investors see SpaceX as an essential investment.
However, the risk lies on the opposing side of the transaction. SpaceX has diversified into various sectors, including rocket launches, Starlink satellite internet, xAI, X (formerly Twitter), and a computing rental service generating $2.17 billion monthly from Google and Anthropic. Investors making $10 billion bets are essentially wagering on Elon Musk's capability to manage all these ventures concurrently. No independent party has reviewed the complete financial details of each division.
Morningstar values SpaceX at about $780 billion, less than half of the IPO target, suggesting a market disagreement on valuation. By Thursday, the market will begin to reveal who holds the accurate perspective.
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SpaceX's IPO receives orders several times greater than the available shares.
SpaceX's $75 billion IPO has seen overwhelming demand, with individual orders exceeding $10 billion. Shares are priced at $135 each on Wednesday, leading to a valuation of $1.8 trillion. In contrast, Morningstar estimates its value to be half that amount.