Report: SpaceX IPO Oversubscribed, Expected to Start Trading on June 12
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SpaceX’s initial public offering subscription has already surpassed the total shares available for issue, standing on the verge of setting a record for the largest IPO in history.
According to Bloomberg, after conducting one-on-one roadshows with institutional investors, subscription orders for this SpaceX IPO have exceeded the available share quantity. The company plans to issue about 555.6 million shares at a price of $135 per share, with the transaction size around $75 billion, corresponding to a valuation of roughly $1.8 trillion.
This IPO fundraising amount will more than double Saudi Aramco’s $29.4 billion listing record in 2019, making it the largest IPO in global history.
According to people familiar with the matter, the transaction is expected to be priced on June 11, and trading will begin the next day, but it is still in the early stages of the roadshow and related details may still change. The oversubscription indicates that the company has already met the demand basis to complete full fundraising, sending a clear market signal to participating investors.
The company’s official name is Space Exploration Technologies Corp. It plans to trade under the ticker symbol “SPCX” on the Nasdaq and Nasdaq Texas markets, with headquarters located in Starbase, Texas.
Fixed Price Offering, Breaking US Large IPO Tradition
SpaceX is using a fixed price offering method this time, which is extremely rare in large US IPO markets.
Typically, US companies will announce an indicative price range during the roadshow and determine the final price based on market feedback. Some even set the price at the upper limit or above in cases of oversubscription, to create market buzz.
Skipping the price range process is more common in European and Asian markets, but in the US, this practice is almost only seen with a handful of small companies.
Goldman Sachs, Morgan Stanley, Bank of America, Citigroup, and J.P. Morgan, the five top investment banks, are jointly leading this transaction, with another 18 banks participating in the underwriting.
Index Inclusion Rules Loosen, Passive Funds May Accelerate Inflows
After SpaceX goes public, it is expected to be quickly included in major stock indices, bringing considerable passive capital inflows.
Nasdaq recently changed its rules, allowing SpaceX to be added to the Nasdaq 100 Index within just 15 trading days of listing, a significant shortening from the previous minimum waiting period of three months. FTSE Russell has taken similar measures, reducing the waiting period to five trading days.
However, S&P Dow Jones Indices has chosen to stand pat and maintain its existing index inclusion eligibility requirements. This means SpaceX will not be able to enter the S&P 500 Index through the fast track mechanism in the short term, thus blocking the rapid inclusion path that large tech stocks have used via that index.
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