SpaceX’s record IPO said to draw over US$350 billion in demand

SPACEX’s historic US$75 billion IPO drew more than US$350 billion in demand from institutions and retail investors, according to people familiar with the matter.

The largest ever initial public offering saw institutional investors place orders for more than US$250 billion of stock, the people said. The company sold 555.6 million shares at US$135 each in a deal that values it at roughly US$1.8 trillion.

About 70 per cent of the shares sold to institutions were allocated to so-called long-only investors in addition to sovereign wealth funds, the people said.

BlackRock sought to buy about US$5 billion in the IPO while Saudi Arabia’s Public Investment Fund and Kuwait Investment Authority placed orders for shares worth US$1 billion to US$5 billion, Bloomberg News reported.

Institutional investors that participate in IPOs typically include asset managers and hedge funds.

Within that group, investors such as mutual funds pursuing a strategy of buying stock and holding it for the medium-to-long term are often prized, as they are seen as unlikely to sell immediately and expected to support the company over time.

Among the firms that placed orders, close to one-third of them didn’t receive any stock, some of the people said. 

The company allocated about 20 per cent of the available shares to individual investors, the people said. Placing roughly US$15 billion of stock with this group reflects how the cohort has grown in importance to the market. Individuals submitted more than US$100 billion in orders, people familiar with the matter have said.

The US$100 billion-plus figure includes domestic and international retail demand, a person familiar with the matter has said. A representative for SpaceX didn’t immediately respond to a request for comment.

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Leaving large numbers of Elon Musk’s fans with few shares in the IPO, or none, would likely amplify demand for the stock once it begins trading.

Musk has attracted a strong following throughout his tenure leading Tesla, with retail owning about 40 per cent of the company’s shares, according to BNP Paribas analyst James Picariello’s estimates.

“I’m a huge fan of small retail investors,” Musk posted in 2020 on X, known at the time as Twitter, saying at the time that SpaceX would likely do an IPO for Starlink. “Will make sure they get top priority. You can hold me to it,” he said.

Goldman Sachs, Morgan Stanley, Bank of America, Citigroup and JPMorgan Chase & Co. led the deal with 18 other banks participating. The company formally known as Space Exploration Technologies Corp. will debut on Nasdaq and Nasdaq Texas on Friday under the symbol SPCX. BLOOMBERG