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The moment that Wall Street had anticipated all year arrived on Friday as SpaceX, the AI and aerospace company controlled by Elon Musk, began trading publicly on the Nasdaq in the largest initial public offering (IPO) in the history of financial markets.
In a speech before the New York session opened for trading, Musk stated that SpaceX’s goal is to “take the fiction out of science fiction.”
SPCX opened at $150, over 10% above its $135 IPO price, and it was already at more than $160 after the first few minutes of live trading.
It makes the polarizsng entrepreneur the world’s first trillionaire as he vowed to take humanity to Mars.
The company confirmed on Thursday that it had priced 555.6 million Class A shares at $135 each, valuing the firm at roughly $1.78 trillion (€1.54trn) and targeting a raise of $75 billion (€64.5bn) that instantly eclipsed Saudi Aramco’s $29.4 billion (€25.4bn) listing, which had stood as the global record for almost seven years.
Only around 3% to 4% of SpaceX shares are currently available for public trading.
The company earmarked as much as 30% of its offering for retail investors, including 10% dedicated to European buyers, but the final amount was set at 20%. As for options contracts on SPCX, they are scheduled to begin trading next week.
The IPO has also brought Elon Musk closer to becoming the world’s first trillionaire.
Forbes valued his pre-IPO SpaceX stake, estimated at around 42% of the company, at about $500bn (€435bn). At the IPO valuation, those holdings are worth roughly $690bn (€600bn), adding nearly $190bn (€165bn) to his fortune and pushing his net worth closer to the $1tn (€870bn) milestone.
Along with Musk, thousands of SpaceX employees are benefitting from the IPO and becoming millionaires.
The listing will give millions of savers indirect exposure to SpaceX as the company is expected to qualify for major stock market indexes shortly after its debut, meaning its shares could be automatically purchased by index-tracking funds.
SpaceX is estimated to be fast-tracked into the Nasdaq-100 in less than a month, as opposed to a typical wait of as much as a year.
Nasdaq’s new fast-entry rule, introduced in May, now sees it evaluating newly listed stocks for potential entry by ranking their market capitalisation on the seventh trading day and assessing whether they would rank within the top 40 index members.
SpaceX is already in the top 10.
Among other changes announced, the rule that requires companies to float a minimum of 10% of their shares was also scrapped.
Analysts estimate that funds tracking the Nasdaq-100 will be required to purchase at least $7bn (€6bn) worth of SpaceX shares around the inclusion date, creating a wave of mechanical demand.
SpaceX has also already become eligible for inclusion in both the Russell US Equity Indexes and the FTSE Global Equity Index Series under the newly announced fast-entry rules from the index provider FTSE Russell.
The S&P 500, however, will not adopt a similar fast-track approach.
S&P Dow Jones Indices confirmed in early June that it would maintain its 12-month seasoning requirement and GAAP profitability test, meaning SpaceX will not join the index before mid-2027.
This article does not constitute financial advice, always do your own research and invest according to your specific circumstances.