Elon Musk’s rocket and artificial intelligence company SpaceX has pulled off the biggest initial public offering in history – and it turns out the haul was even larger than first thought. The company sold shares to the public on Friday, and in a statement announcing the completion of the listing, revealed it had brought in a total of $85.7bn (£75bn), $10bn more than the $75bn initially reported.
That extra $10bn came via a financial mechanism known as an overallotment option, more commonly referred to as a “greenshoe” option. When a company goes public in a highly anticipated listing, investor demand can outstrip the initial supply of shares. To prevent wild price swings and ensure a smoother launch, a greenshoe agreement lets the banks handling the listing sell more shares than originally planned. In SpaceX’s case, appetite was exceptionally high. The underwriters – which included Goldman Sachs, Bank of America and JPMorgan – exercised the option in full, purchasing an additional 83.3 million shares directly from the company to meet the huge demand.
“SpaceX's IPO raised $10bn more than expected, bringing total to $85.7bn.”
The $10bn raised by the greenshoe alone would by itself rank as one of the biggest IPOs in history. Musk told employees the $75bn portion of the funds would be spent funding a “significant growth phase”.
The listing also saw Musk elevated to trillionaire status, according to Bloomberg calculations. Momentum continued on Monday, with shares surging by more than 19% to $192. They were first offered to investors at $135, valuing the company at $1.8tn.
Because the vast majority of Musk’s wealth is directly tied up in SpaceX equity, his new milestone status remains entirely dependent on the market – a sharp decline in the stock could strip him of the title just as quickly as continued gains could multiply it. Analysts have warned that SpaceX’s sky-high valuation leaves little room for error, raising questions over whether the loss-making company can sustain its current growth amid growing regulatory scrutiny and rising competition in the commercial space sector.