SpaceX Finally Goes Public and the Space Industry Goes Buzzing

SpaceX took space investors on a roller-coaster ride last week – and SpaceX hasn’t announced yet! SpaceX iHowever, rumours having an IPO prospectus is fine. But once it’s passed, the story won’t end; it will just be starting.

Like The Wall Street Journal explained last week, Elon Musk’s “unusual” plan to IPO’ing SpaceX will begin in stages — and may not be completed before June 28, Elon Musk’s birthday. (He’ll be 55, if you count the candles.)

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Everything starts when SpaceX presents a “secret” IPO prospectus, which was discussed last week and may happen this week. The SEC may now have questions about the filing, which could undergo many changes before it is published a few months from now.

Only then will investors get a clear picture of SpaceX’s annual revenue and earnings. (In the meantime, here are my best guesses.)

The publication of the prospectus will precede the marketing of the SpaceX IPO to potential investors by two weeks. The success of this “roadshow” (which in SpaceX’s case will include investors hitting the road to visit SpaceX and visit its facilities, unlike SpaceX going on the road to hype) will determine the price that SpaceX wants for its shares in the IPO.

This price will be set the day before the actual IPO date. How many shares SpaceX sells in the IPO and the share price it puts up will reflect both the amount SpaceX raises and the company’s initial market capitalization.

As of March 28, the numbers are increasing. Citing the usual “people familiar with the deal”, WSJ estimates that the IPO will raise between $40 billion and $80 billion, making it the largest IPO in history. The total market capitalization at the time of the IPO is expected to be from $1.5 trillion to $1.75 trillion.

Regardless of what SpaceX’s valuation starts at, Musk is working hard to make sure it holds to that price — and that shareholders don’t sell it. Part 1 of this plan, as we learned earlier this month, is to strengthen the arm S&P 500 and Nasdaq-100 indexes to quickly add SpaceX stock to their stock. That way, institutional investors who own the index won’t be able to dump SpaceX stock without selling everything in the index.

Part 2, as WSJ reveals, will be selling SpaceX shares mostly to Musk’s biggest players in the individual investment community. Musk can allocate up to a third of the shares floated in the IPO to individual investors. He can also encourage Tesla (NASDAQ: TSLA) shareholders and investors who helped him buy Twitter (now xAI) to participate in the SpaceX IPO.

The reason: Such investors are among Musk’s biggest players, and they may not be able to sell their SpaceX shares for a quick profit after the IPO. Some investors will be asked to agree to a six-month and longer lock-up period before they are allowed to sell any shares they buy in the IPO.

If his plans come to fruition, the SpaceX IPO could start off as a huge success — and rocket even higher.

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SpaceX Finally Goes Public and the Space Industry is Buzzing – The Motley Fool reported