Key facts
- SpaceX's IPO raised a record $75 billion, with shares closing at $160.95.
- The company's valuation surpassed $2.1 trillion on its Nasdaq debut.
- SpaceX became the sixth-largest U.S. company by market value.
- Retail investors received approximately 20% of the IPO allocation.
- SpaceX's market opportunity is estimated at $28.5 trillion.
SpaceX shares surged 19% in their Nasdaq debut on Friday, pushing the company's valuation past $2 trillion and making it the sixth-largest U.S. company by market value. The record-setting $75 billion IPO saw shares end the day at $160.95, surpassing Broadcom and positioning SpaceX behind Amazon in market capitalization.
Investors eagerly bought into Elon Musk's space, satellite, and AI empire, with over 510 million shares worth approximately $84 billion changing hands. Despite being currently unprofitable and generating a fraction of the revenue of similarly valued tech giants, the launch proceeded smoothly, unlike Meta's troubled debut in 2012.
Analysts noted the potential for volatility due to SpaceX's small relative float and high valuation, with a price-to-revenue ratio of roughly 112. Some investors compared SpaceX to the railroads of the Industrial Revolution, willing to pay an "Elon Musk premium." Retail investors received a larger-than-typical allocation of about 20% of the shares.
SpaceX executives, including President Gwynne Shotwell and CFO Bret Johnsen, celebrated the debut at the Nasdaq market site. Elon Musk held a separate event for employees in Texas. The IPO's success rewrites Wall Street's playbook and has drawn significant retail investor interest.
While SpaceX's lack of profitability makes it ineligible for the S&P 500, its expected fast-track inclusion in the Nasdaq 100 is anticipated to create demand from passive funds and ETFs. Some analysts predict the stock's performance could trigger portfolio reshuffling and selling pressure on other tech stocks.
Despite positive sentiment from some investors and analysts, others, like Morningstar, have issued more conservative valuations, with CFRA initiating coverage with a sell rating. The company's stated market opportunity spans $28.5 trillion, and its leading position in space operations and Starlink revenues provide a foundation for growth.