The extra $10bn (£7.5bn) that Elon Musk’s rocket and artificial intelligence company SpaceX pulled in from its stock market debut would by itself rank as one of the biggest initial public offerings in history. Yet it was merely the icing on a record-breaking cake that raised $85.7bn in total – $10bn more than initially thought.
The listing, which took place on New York’s Nasdaq exchange last week, had already been the largest IPO ever, with $75bn raised from investors. Musk told employees that money would fund a “significant growth phase”. But the banks that backed the deal exercised a so-called “greenshoe” clause, a financial mechanism that allowed them to purchase an extra $10bn of shares directly from the company to meet demand.
“SpaceX raised $10bn more than initially thought in its record-breaking IPO, bringing total to $85.7bn.”
The underwriters – Goldman Sachs, Bank of America, and JPMorgan – exercised the option in full, buying an additional 83.3 million shares. The appetite for SpaceX was exceptionally high, and the additional shares were snapped up at the same price as the initial offering: $135 each. That price valued the entire company at $1.8tn.
The immense demand continued after the listing. On Monday, SpaceX shares surged more than 19% to $192, pushing the company’s market valuation even higher. The rally also propelled Musk to trillionaire status, according to Bloomberg calculations, though the milestone is entirely dependent on the stock price. A sharp decline could strip him of the title just as quickly as further gains could multiply it.
But analysts have cautioned that such a sky-high valuation leaves little room for error. SpaceX remains a loss-making company, and questions linger over whether it can sustain its current growth amid growing regulatory scrutiny and rising competition in the commercial space sector.