SpaceX IPO plans draw retail investor interest

SpaceX’s planned stock market debut would open one of Elon Musk’s most closely held companies to ordinary investors and, according to CBS News and the BBC, could become the largest initial public offering ever.

The Texas-based rocket, satellite and artificial intelligence company is scheduled to price its shares on a Thursday and begin trading the following day on the Nasdaq Composite Index under the ticker symbol “SPCX,” according to SpaceX’s IPO website as cited by CBS News. The BBC reported that trading is set to begin on 12 June. A regulatory filing said the company expects to price shares at $135 each, though Matthew Kennedy, a senior market strategist at Renaissance Capital, told CBS News that the price could still change before trading begins.

SpaceX expects to raise $75 billion in the offering, nearly three times the amount Saudi Aramco raised in its 2019 listing, which remains the largest IPO to date, CBS News reported. The sale would value SpaceX at about $1.77 trillion, larger than Tesla’s $1.5 trillion market value, Meta Platforms’ $1.4 trillion and Berkshire Hathaway’s $1.04 trillion, according to CBS News. The BBC reported that bankers selling the shares have put a target valuation of $1.75 trillion on the company.

Retail investors are expected to receive an unusually large allocation. Reuters previously reported that as much as 30% of the IPO could be set aside for individual investors, three times the usual allocation, according to CBS News. SpaceX says retail investors can seek shares through Charles Schwab, E*TRADE by Morgan Stanley, Fidelity Investments, Robinhood and SoFi.

“Your brokerage account or investing app will confirm whether you’re eligible when you submit your request to participate,” SpaceX says on its website.

Kennedy said most retail investors will use those five platforms, while some accredited or high-net-worth investors may have access through banks such as JPMorgan. Investors generally must set up a profile, confirm eligibility and request a number of shares. But requests do not guarantee allocations.

“If you ask for 100 shares, maybe you’ll get 100,” said Jay Ritter, a professor and director of The IPO Initiative at the University of Florida. “More likely… you’ll probably only get a fraction of the shares that you asked for.”

SpaceX is offering 555,555,555 class A common shares as part of its public float, or about 4.25% of the company’s total stock, according to a recent SEC filing cited by CBS News. The BBC reported that the company is initially selling about 5% of its total shares.

Interest has also spread to the United Kingdom. The BBC reported that more than one UK stockbroker described “a surge” in interest, with UK retail investors likely to be allocated around £1.5 billion worth of shares. Simon Belsham, chief client officer at Hargreaves Lansdown, said, “While we recognise this IPO might not be right for everyone, it’s an exciting moment for many of our clients. We’re expecting this might be a first foray into investing for many.”

The company’s prospectus describes its mission as building “the systems and technologies necessary to make life multiplanetary, to understand the true nature of the universe and to extend the light of consciousness to the stars.” SpaceX designs rockets, manufactures and launches satellites, and operates the Starlink communications network. The BBC reported that Starlink is profitable and has been important during Ukraine’s defense against Russia’s invasion.

But the BBC also reported that SpaceX’s valuation depends heavily on artificial intelligence. Its prospectus identifies a $28.5 trillion total addressable market, with $26.5 trillion tied to AI. The company lost nearly $5 billion last year, the BBC reported.

Musk will remain in control. The BBC reported he owns 42% of the company, but shares with extra voting rights give him effective control of 85%. Financial journalist Robert Armstrong asked, “Do you really own something you can’t control?”

Some analysts are urging caution. Ritter’s research on more than 9,200 IPOs from 1980 to 2024 found an average first-day return of about 19%, but Kennedy said shares can be volatile after a debut. Morningstar said this month it believes SpaceX is “significantly overvalued” and that investors may later find “more attractive levels” after the IPO.