SpaceX IPO: Elon Musk’s SpaceX is set to begin trading on the Nasdaq later on Friday after pricing the largest US initial public offering (IPO) on record at USD 135 per share, raising USD 75 billion and valuing the space, satellite and artificial intelligence (AI) company at about USD 1.77 trillion.
The company sold 555.6 million shares in the offering, which will see it debut under the ticker symbol “SPCX”. The valuation places SpaceX among the most valuable publicly listed companies in the United States despite the company reporting losses last year.
Scarcity of shares could fuel initial rally
Paul Meeks, Managing Director and Head of Technology Research at Freedom Capital, expects strong demand for the stock in its early trading sessions, citing the limited number of shares available to investors.
“I bet the IPO will be hot nonetheless for one very big reason is that there’ll be a scarcity of shares because SpaceX is only issuing a 4 per cent stake in the company,” Meeks said in an exclusive conversation with ET Now.
“Institutions want it. Retail wants it. Elon Musk is a God to some people. The fundamentals don’t bear this out, but the stock will be hot because of the scarcity of the shares,” he added.
Meeks, however, questioned the company’s valuation, saying he believed it was difficult to justify even a fraction of the roughly USD 1.77 trillion market capitalisation implied by the IPO price.
AI expectations under scrutiny
While SpaceX’s Starlink satellite broadband business remains a key growth engine, Meeks argued that investors are largely paying for the company’s future AI potential.
“The big valuation for this company, about 93 per cent, according to the company itself, of its opportunity is not in satellite broadband. It’s not in SpaceX rockets. It’s what they’re going to do with AI,” he said.
“So if the company says almost all of its opportunity is in AI, and so far these guys are well behind the big tech companies in the States, they only did USD 3 billion last year in AI revenues.”
Meeks said investors may initially give Musk-led SpaceX considerable flexibility, but scrutiny could intensify over the next year if the company fails to demonstrate meaningful progress in AI.
Nasdaq inclusion seen as additional tailwind
The technology investor also said a potential fast-track inclusion into the Nasdaq-100 index could support the stock by attracting passive fund flows.
“Yes, because we know there’s going to be a lot of pull from the inclusion in the Nasdaq 100,” Meeks said, although he cautioned that much of that expectation may already be reflected in the share price.
SpaceX’s market debut is being closely watched as a test of investor appetite for mega-cap technology listings and AI-linked growth stories.
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money-related decisions.)
