SpaceX’s IPO sees intense interest, share price to be capped at $135

Elon Musk’s rocket and satellite company, SpaceX, is all set to go public on Wall Street on June 12, with 555.6 million shares worth $75 billion on offer. Besides this, the underwriters have an additional option to purchase 83.33 million shares, amounting to $11.2 billion. Despite this, Elon Musk will continue to own over 82% of the company’s voting control after the issue.

This issue is marked by an unusual rule of the share price being capped at $135 per share. Under standard Wall Street convention, share prices are adjusted by the underwriters as per demand, with the shares being sold within a range. In this case, SpaceX has taken a far more unconventional approach, as it conducts roadshows for the issue.

The IPO is expected to be an ‘all primary’ issue, with fresh shares going directly to SpaceX and none of the existing shares being cashed out. To prove his commitment to the issue, Elon Musk has committed to not sell any of his personal SpaceX shares for at least one year after the company lists.

What Will SpaceX Do with $75 Billion?

While SpaceX has been building reusable rockets and aiming for Mars, the proceeds of this IPO is aimed at two of its most lucrative businesses:

• Starlink: A big chunk of the funds will go towards launching new, advanced satellites to provide high speed internet to rural and remote areas globally, offering SpaceX a main profit engine for financial growth.
• AI and Space Data Centers: Following its merger with Musk;s AI startup xAI earlier this year, SpaceX is now looking to invest heavily in computing power, where it plans to use its satellite network to build next generation, solar powered data centers in space.

The Verdict 

There is no doubt that the SpaceX listing is a historic financial milestone. At a $1.75 trillion valuation, this IPO is the biggest in history, further hyped by Elon Musk’s charisma. It is widely expected to make him the world’s first trillionaire, while allowing people to own a piece of business that essentially doesn’t have a competitor per se. The issue has already attracted more interest than the shares available, despite the concerns raised against SpaceX’s governance structure. Investors are waiting with bated breath for the issue, with the issue expected to be at the heart of the ongoing AI boom.