SpaceX raises $85.7 billion in IPO, making Elon Musk the first trillionaire as shares extend rally Monday
Elon Musk's SpaceX completed the largest IPO in history, raising $85.7 billion after underwriters exercised the greenshoe option. Shares rose 19% on Friday and climbed more than 14% on Monday, making Musk the world's first trillionaire.
IPO sets new record with $85.7bn raise
The company priced 555.6 million shares at $135 apiece, raising $75 billion before underwriters exercised the greenshoe option to buy an additional 83.3 million shares, lifting the total to $85.7 billion. The offering surpassed Saudi Aramco's 2019 record. Elon Musk, SpaceX founder and CEO, wrote on X on Friday that he would "love the incredible people of SpaceX beyond words."
I love the incredible people of SpaceX beyond words.
Shares jump 19% on debut, extend gains Monday
SpaceX opened at $150 on the Nasdaq on June 12, rose as much as 30% intraday, and closed at $160.95, up 19%, vaulting the company's market capitalization above $2 trillion. On Monday the stock pushed higher, climbing more than 14% to $184 in early afternoon, according to BBC and TechCrunch. Heavy trading volume prompted Robinhood to report record traffic. SpaceX COO Gwynne Shotwell told CNBC on Friday that a "merger between SpaceX and Tesla might make Elon's life a little easier," drawing attention.
A merger between SpaceX and Tesla might make Elon's life a little easier.
- SpaceX shares priced at $135, IPO raises $75 billion
- Shares debut on Nasdaq, open at $150, close at $160.95, up 19%
- Underwriters exercise greenshoe option, raising additional $10 billion to total $85.7 billion
- Stock extends rally, climbing more than 14% to $184
Retail investors face hard limits on flipping
Individual investors received 20% of the IPO allocation, compared with 10% for hedge funds and 70% for long-term institutions. Platforms such as Fidelity, Robinhood, and E*TRADE prohibit retail investors from selling shares for 15 to 30 days, with penalties that can include bans from future IPOs. By contrast, big funds face no such restrictions. IPO expert Jay Ritter of the University of Florida said: "It's very common for brokerage firms to put restrictions on flipping for retail investors. But if the hedge funds are profitable enough customers (for banks), they can do whatever they want."
It's very common for brokerage firms to put restrictions on flipping for retail investors. But if the hedge funds are profitable enough customers (for banks), they can do whatever they want.
Leveraged ETFs stumble out of the gate
Several asset managers seeking to launch leveraged ETFs tied to SpaceX on its first trading day were told by exchanges to delay until Monday, citing SEC concerns that the products could complicate the debut. Defiance ETFs, however, relaunched an existing 2x space ETF that held a block of SpaceX shares at the IPO price, becoming the only product with first-day leveraged exposure. Defiance CIO Sylvia Jablonski said: "This makes it the only product able to offer first-day leveraged exposure."
This makes it the only product able to offer first-day leveraged exposure.
Index providers scramble to add SpaceX
Nasdaq will fast-track SpaceX into the Nasdaq 100, and FTSE Russell and MSCI are set to add the stock to their indexes on June 26 and June 29, respectively. Jefferies estimates FTSE Russell inclusion alone will bring $2.68 billion in passive investor flows. S&P Dow Jones Indices, which runs the S&P 500, held off on immediate inclusion. Dina Ting, Franklin Templeton's head of global index portfolio management, said: "The IPO is the headline, but the real story is about index methodology."
The IPO is the headline, but the real story is about index methodology.
