SpaceX to offer shares at $135 apiece to raise $75bn in IPO - report

(Sharecast News) - SpaceX is reportedly planning to offer shares ​at $135 apiece to raise $75 bn in its ⁠initial public ​offering, as Elon Musk rejects another Wall Street convention by setting a fixed price ahead of the marketing phase of the deal.

According to Bloomberg, citing people familiar with the matter, the rocket, satellite and artificial intelligence company aims to sell 555.6m shares in the offering. It was understood that deliberations are ongoing and details of the IPO could still change before the terms are disclosed as soon as Wednesday, or even during the marketing process.

Most companies listing in the US usually announce a price range before marketing shares during investor presentations, with only a handful of tiny firms opting for a fixed price. Such offerings are more common in Europe and Asia. For example, The Hut Group raised $2.5bn in a London IPO in 2020, Bloomberg noted.

SpaceX is expected to start formal marketing on 4 June and price as early as 11 June, according to Bloomberg, although the timetable could still slip by a matter of days.

Stephen Innes, managing partner at SPI Asset Management, said the market is about to discover whether valuation still matters when investors believe they are buying "a front row seat to the future".

"In practical terms, investors are being asked to pay roughly 94 times sales for a company that generated an estimated $18.67 billion in bookings while posting a loss approaching $5 billion. Under normal market conditions, those numbers would trigger intense scrutiny. Yet these are not normal market conditions. We are operating in an era where scarcity itself has become an asset class," he said.

"Markets have always been willing to pay extraordinary prices for companies that appear to control the next economic frontier. Railroads once commanded that premium. The Nifty Fifty inherited it. Internet giants carried the torch during the dot-com era. Today, the crown belongs to anything that sits at the intersection of artificial intelligence, infrastructure, communications, and national strategic importance. SpaceX happens to occupy all four lanes of that highway simultaneously.

"What makes this offering fascinating is that it arrives at a moment when investors are desperately searching for the next great growth vessel. The AI boom has already concentrated enormous amounts of capital into a relatively small collection of names. Every portfolio manager is effectively fishing in the same pond. SpaceX offers something different. It is not merely another software company promising future disruption. It owns physical infrastructure orbiting the planet, controls the largest rocket-launch and spaceship capacity that competitors struggle to replicate, and operates Starlink, which increasingly resembles the financial engine funding a much larger strategic vision."