SpaceX Just Made Its Market Debut. Here's What Investors Need to Know.
Written by Adria Cimino for The Motley Fool -> SpaceX launched the biggest IPO on record and reached a market value of more than $2 trillion. The company earmarked a larger-than-usual percent of shares for retail investors. SpaceX (NASDAQ: SPCX) raised $75 billion for the bigg
SpaceX launched the biggest IPO on record and reached a market value of more than $2 trillion.
The company earmarked a larger-than-usual percent of shares for retail investors.
SpaceX (NASDAQ: SPCX) raised $75 billion for the biggest initial public offering ever, and the stock surged more than 20% today in its first moments of trading on the Nasdaq. The Elon Musk-led company sold shares at $135 apiece, the stock opened at $150 and quickly jumped to $165, valuing the company at more than $2.1 trillion.
SpaceX's IPO has drawn much attention and excitement in recent days due to its sheer size as well as the company's presence in three compelling growth markets: rocket launches, artificial intelligence (AI), and satellite-based internet services. The presence of Musk, known for his focus on innovation, has also made some investors sit up and take notice.
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Now, as SpaceX begins its story as a publicly traded company, here's what investors need to know.
So, first, let's go through the technical points of what is unfolding. SpaceX confirmed on June 11 that it would sell more than 555 million shares for $135 apiece as part of the offering. Musk initially aimed to allocate 30% of the IPO shares to retail investors, according to early press reports. But a source familiar with the matter told CNBC that the company cut that to the low-20% range, likely due to high demand from institutional investors. Even at this level, the SpaceX IPO remains a huge event for retail investors, as they usually have access to only 5% to 10% of IPO shares .
SpaceX also stands out from the general IPO crowd as it may be on track to enter a major index sooner than what's happened in the past. The Nasdaq-100 now will admit IPO companies after only 15 trading days if their market cap ranks within the top 40 stocks currently in the index. That implies a market value of about $121 billion, and SpaceX clearly makes it past that level. Prior to this, companies would have to wait three to 14 months for inclusion.
