SpaceX IPO draws more than US$70 billion in retail orders

SPACEX’S initial public offering has attracted more than US$70 billion in orders from retail investors, according to people familiar with the matter, as the potentially record-breaking debut enters the home stretch.

Retail investors are expected to be allocated at least 20 per cent of the available shares, the people said, asking not to be identified as the information isn’t public.

At a US$75 billion IPO size, which would be the largest on record, that allocation would leave the bulk of demand from individual investors unfulfilled, according to Bloomberg calculations.

Leaving large numbers of Elon Musk’s fans empty-handed in the IPO would likely amplify demand for the shares once they begin trading. Musk has attracted a strong retail following throughout his tenure leading Tesla, with the cohort owning about 40 per cent of the company’s shares, according to BNP Paribas analyst James Picariello’s estimates.

The rocket, satellite and artificial intelligence company has received orders from about 1,000 institutional investors, some of the people said. 

The terms of the offering such as the US$135 per share price and the 555.6 million shares are unlikely to change, some of the people said. SpaceX would raise about US$75 billion in a deal valuing the company at around US$1.8 trillion, based on the outstanding shares in its filings.

SpaceX is set to allocate less than 10 per cent of the shares in its IPO to international orders, some of the people said. Japan’s allocation was increased earlier this month to US$2.5 billion from US$2 billion.

Deliberations are ongoing and details of the offering including the amount allocated to retail investors could still change, the people said. A spokesperson for SpaceX didn’t immediately respond to a request for comment.

Banks were expected to stop taking orders for SpaceX’s IPO from institutional investors Wednesday, ahead of pricing later Thursday and trading Friday.

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The IPO is expected to rank as the biggest ever, topping Saudi Aramco’s US$29.4 billion debut in 2019. It will set the stage for potential mega-listings from companies whose AI models compete with SpaceX’s.

OpenAI filed confidentially for an IPO on Monday, following Anthropic PBC which filed last week. Together with SpaceX, the three companies could add US$3.6 trillion of market value to US exchanges, according to Bloomberg calculations. 

Goldman Sachs Group, Morgan Stanley, Bank of America, Citigroup and JPMorgan Chase & Co. are leading SpaceX’s IPO, with 18 other banks participating. The company formally known as Space Exploration Technologies Corp. expects to make its debut on Nasdaq and Nasdaq Texas on Friday under the symbol SPCX. BLOOMBERG