SpaceX Launches Into the Public Market

The big picture. SpaceX, a rocket company went public. They launched Friday on the Nasdaq, with an offering of about $75 billion, the biggest stock IPO (Initial Public Offering) ever. 

The mechanics. SpaceX issued about 555 million shares, an approximate 5% stake. Companies usually float a price and let investor settle the final number. SpaceX didn't do that, they set 1 share equal to $135. Banks including Goldman Sachs got the option to sell about 80 million extra shares if demand was strong, which it definitely was.

The first-day ride. The stock opened at $150 and ran as high as $176.52, almost 31% above the offer price, before settling at $160.95 to close up about 19%. At that price SpaceX is worth roughly $1.75 trillion. That puts it among the ten most valuable public companies in the world and, on paper, makes Musk the first trillionaire. 

Everybody wanted in: On day 1, SPCX became the most bought stock by investors, with interest several times greater than that of Nvidia's. The demand was roughly four times more than the supply of shares being only 5%. Most who wanted to invest in the company got virtually nothing. Others who tried to invest large amounts of money were limited to a fraction.

Why the frenzy: Prior to listing, the only way to acquire shares in SpaceX is through employment, being a venture capitalist, or having enough money to make such an acquisition. 4,400 Employees overnight now get to call themselves millionaires.

The catch. Hype works both ways. Several analysts warned that a stock this big and this new will probably swing hard for a while as the market figures out what it is really worth. They also pointed out that chasing a hot IPO is very different from long-term investing.

You'll already Own It. Within the next two weeks, index providers are expected to add SPCX to indexes that many other funds track. Those funds have to buy it to match the index, many of which you probably already own if you invest. The S&P 500 however operates much differently. A company needs four straight quarters of profit to qualify to be listed, and they've stated they are not making exceptions, which means a slow and steady waiting game to see where SpaceX and the stock heads.

What's Included SpaceX incorporated Elon Musk's artificial intelligence company, xAI, into its operations, making AI computing another feature aside from rocket launches. It is also worth noting that SpaceX happens to be the first of three expected IPOs alongside OpenAI and Anthropic who have filed for IPO in recent months.

Where the money goes. SpaceX says it will use the cash to build Starship and its launch sites, expand the Starlink satellite network (now more than 8 million subscribers), and grow its AI computing power. More rockets, more satellites, more chips.