SpaceX is preparing to go public, and if everything goes according to plan, it will be the largest initial public offering in history. The price has already been set in advance, even before the start of the marketing campaign among investors. This is unusual for Wall Street. The company’s expected valuation exceeds $1.8 trillion.
Price and quantity
The company plans to offer 555.6 million shares at $135 each, which is expected to raise a total of $75 billion. Most companies typically announce a price range first and only then hold presentations for investors. Setting a fixed price before the marketing campaign begins is rare and more common in Europe and Asia.
By comparison, the record for the largest IPO is still held by the Saudi oil company Saudi Aramco, which raised $29.4 billion in 2019. SpaceX’s offering will more than double that amount.
Schedule and organizers
The official marketing campaign targeting investors was scheduled to begin on June 4, and the final pricing is expected around June 11. The deal is being underwritten by Goldman Sachs, Morgan Stanley, Bank of America, Citigroup, JPMorgan Chase, and 18 other banks. The company’s shares are expected to trade on the Nasdaq under the ticker symbol SPCX.
Underwriters, the firms organizing the stock offering, will receive a relatively modest fee of about $500 million, as SpaceX insists on minimal commissions. More than a thousand current and former employees of the company have also banded together to negotiate more favorable terms for managing their holdings ahead of the offering.
Market reaction
Analysts have mixed views on the outlook. “From a valuation perspective, it’s certainly not cheap,” said Fabien Yip, an analyst at IG International. He noted that investors are betting on future growth for the company, which is not yet profitable.
Other experts point out that reaching the target price will not be easy, although the market has traditionally tended to trust Musk’s decisions.
According to finance.yahoo.com
