Elon Musk’s SpaceX is seeing a massive wave of investor demand ahead of its public debut, with institutional buy orders heavily outstripping the $75 billion supply of shares.
- The initial public offering is significantly oversubscribed, with multiple institutional firms placing massive orders of $10 billion or more each.
- Banks managing the highly anticipated listing plan to close the institutional order books on Wednesday at 4 p.m. New York time.
- While institutional bidding is coming to a close, retail investors will have extended access on select platforms to bid for up to 30% of the shares reserved specifically for them.
SpaceX, Elon Musk’s rocket, satellite, and artificial intelligence venture, has drawn an overwhelming surge of institutional demand for its initial public offering, with orders coming in at multiple times the total number of shares available.
Several major institutional investors have submitted massive buy orders of $10 billion or more to secure a piece of the space exploration giant, Bloomberg reported on Tuesday, citing people familiar with the matter. Institutional buy orders have already heavily outstripped the supply.
While the window is slamming shut for institutional giants, everyday market participants will get a longer runway. Individual retail investors will still be allowed to submit orders for SpaceX stock through specific brokerage platforms beyond the Wednesday afternoon institutional deadline. Bloomberg previously reported that SpaceX has intentionally carved out up to 30% of the entire offering specifically to accommodate retail demand.
SpaceX IPO Details
Under the terms of the offering, SpaceX is looking to sell 555.6 million shares at a set price of $135 each. The fixed-price strategy avoids traditional pre-listing pricing negotiations and is on track to raise roughly $75 billion.
The massive capital raise would value the conglomerate at an unprecedented $1.8 trillion, making it the largest IPO in Wall Street history and eclipsing Saudi Aramco's record-shattering $29.4 billion listing in 2019.
Investment banks leading the transaction are moving quickly to manage the incoming tide of capital. Wall Street underwriters plan to stop accepting buy orders from institutional investors on Wednesday at 4 p.m. New York time, the sources told Bloomberg. Closing the books gives the underwriting banks time to gauge final demand and formally advise SpaceX on its ultimate pricing strategy.
The public offering is currently scheduled to price on June 11, with official public trading on the Nasdaq expected to begin the following day under the ticker symbol "SPCX."
As bookbuilding reaches its peak, the deal's lead underwriters are holding final high-level huddles, Bloomberg reported. Morgan Stanley hosted roughly 300 institutional investors at its New York headquarters on Tuesday for direct meetings with SpaceX leadership, including President Gwynne Shotwell and Chief Financial Officer Bret Johnsen. The institutional event was led by Morgan Stanley Co-President Dan Simkowitz.
Representatives for SpaceX, Goldman Sachs Group Inc., and Morgan Stanley all declined to comment on the ongoing IPO bookbuilding process.
SpaceX IPO: Valuation Concerns Retail Investors
Retail sentiment on Stocktwits was ‘extremely bullish’ with ‘extremely high’ message volumes. However, an increasing number of retail investors are raising valuation concerns.
One user mentions that new upcoming IPOs of SpaceX, OpenAI and Anthropic need a separate index considering the sky-high valuations.
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But another user mentioned that herd mentality will push SpaceX prices up.
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Morningstar lead equity analyst Nicolas Owens said last week on CNBC that SpaceX is worth less than half of its reported $1.75 trillion IPO target.
"SpaceX is worth less than half of its stated IPO target of $1.75 trillion," Nicolas Owens, a lead equity analyst at Morningstar, told CNBC last week. “We think the company has been significantly overvalued and investors will have opportunities to buy the stock at more attractive levels after the IPO” according to the report.
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