Shares of Elon Musk’s space venture, SpaceX, surged into the spotlight on Friday as the company launched what is being billed as the largest initial public offering ever.
After markets closed on Thursday, SpaceX set the price for 555.6 million shares at $135 apiece under the ticker symbol SPCX, giving the company an immediate valuation of $1.77 trillion.
That market cap would place SpaceX as the seventh most valuable publicly traded company in the United States, putting it comfortably ahead of Musk’s other major business, Tesla.
With roughly $75 billion worth of stock hitting the Nasdaq in the offering, the listing is expected to mint about 4,000 new millionaires.
Among the biggest beneficiaries is a select group of roughly 400 employees, each of whom could see windfalls of up to $100 million, while several dozen may emerge with gains exceeding $500 million apiece.
The clearest standout, however, is Musk himself, who becomes the first person in history to reach trillionaire status based on the combined value of his holdings in SpaceX and Tesla.
In a livestream before the opening of trade, Musk revealed that SpaceX has been cash-flow positive since around 2015 – but analysts say the only profitable part of the business today is the Starlink satellite internet division.
‘SpaceX is the ultimate growth stock. I think this is a company with significant growth potential ahead of it,’ Gabelli Funds portfolio manager John Belton told the Daily Mail.
Elon Musk has become the world’s first trillionaire based on his combined stakes in SpaceX and Tesla (pictured speaking via videolink as he delivered a message to Nasdaq today)
SpaceX president and COO Gwynne Shotwell after they rang the opening bell at the Nasdaq MarketSite to celebrate the launch of SpaceX’s initial public offering
‘It’s definitely going to be a long-term story, and I think it will take time for the stock to find its footing in the public markets. But there are a lot of exciting opportunities ahead,’ Belton told us.
One eye-watering figure in SpaceX’s filing was the claim that its ‘total addressable market’ was $28.5 trillion – that’s almost 88 percent of the total value of the entire US economy.
SpaceX is about more than just rocket ships and satellite internet: President and COO Gwynne Shotwell said her company is also a competitor in the artificial intelligence space, which accounts for a big chunk of its total addressable market.
‘We are builders, we build our own launch vehicles, we build our launch sites, and we’re building data centers both on the ground as well as in orbit soon,’ Shotwell told CNBC.
Many Wall Street observers have drawn comparisons between SpaceX’s debut and the market launch of Facebook parent Meta Platforms, which was a flop.
Meta – then known as Facebook – launched with a stock price of $38, which immediately fell to $18 and closed out the year well below the offering price.
‘For me, the analogy is Amazon. This was a company that changed the way we live,’ Nancy Tengler, CEO of Laffer Tengler Investments, told the Daily Mail.
‘If you go back and look at Amazon since its IPO, the stock is up more than 243,000 percent. The question becomes: what’s your time horizon, and do you believe in the technology?’
Trading in shares of Elon Musk’s rocket ship company SpaceX blasted off on Friday, marking the dramatic debut of the biggest initial public offering in history
The massive market debut has drawn overwhelming enthusiasm among retail investors, and Shotwell said that focus reflects Musk’s vision for the company.
‘He’s trying to make space open for everybody,’ said Shotwell. ‘He wanted this IPO, he wanted regular people to be able to buy the stock, and a lot of folks participated at the retail level.’
Musk is famous for cultivating an extremely motivated base of shareholders who hold but don’t trade Tesla.
‘It’s amazing to see the economic ecosystem that has formed around Tesla shareholders,’ said Tengler.
She said that over the longer term, there was a real possibility that Musk could merge Tesla into SpaceX.
On investor summed up the smart money’s opinion of the IPO’s chances in the near term: ‘I think it’s a coin flip, whether this ends up up or down,’ Ben Narasin, founder of Tenacity Venture Capital,’ told CNBC.
Narasin disclosed that he would be a long-term holder of SpaceX stock, but he was very realistic about the near-term challenges facing the shares.
There is widespread uncertainty about how many IPO buyers simply wanted SpaceX allocations just to flip the stock for a quick profit.
If SpaceX shares don’t rocket higher on day one, that would put a ‘huge stall’ on the pipeline of giant debuts that are coming soon
‘If it pops, everybody is just popping champagne and running to push their stuff out,’ said Narasin.
Earlier this week, OpenAI filed for an IPO that could value the ChatGPT parent at more than $1 trillion, while AI powerhouse Anthropic’s own filing put its value at $965 billion.
Both are expected to debut later this summer – but if things go south for SpaceX, both IPOs could be delayed.
