SpaceX IPO draws $250 billion in demand, 4x oversubscribed

SpaceX's initial public offering has drawn more than $250 billion in investor demand, nearly four times the $75 billion the Elon Musk-led company is seeking to raise, people familiar with the matter said.

"The magnitude of demand is unprecedented for an IPO of this size, with long-only funds placing sizable orders," one of the people said, asking not to be identified because the matter is confidential.

The oversubscription rate is running at three and a half to four times the planned offering size, the people said. SpaceX is selling about 555.6 million shares at $135 apiece, implying a valuation of roughly $1.77 trillion. The company's president, Gwynne Shotwell, and finance chief, Bret Johnsen, attended a lunch meeting at Morgan Stanley on Tuesday with about 300 institutional investors, hosted by co-president Dan Simkowitz.

The IPO stands to be the largest in history and will test whether Musk's vision of space-based AI data centers can justify a valuation that would make SpaceX one of the most valuable publicly traded companies. Pricing is expected Thursday afternoon, with shares beginning trade Friday on the Nasdaq under the ticker SPCX.

The offering comes as markets face extreme volatility. The Nasdaq composite posted its steepest decline in more than a year on Friday, and bitcoin has fallen 37% from its January high. Some analysts have speculated that selling by SpaceX buyers raising funds for the IPO may be contributing to the market retreat.

SpaceX's roadshow presentation emphasizes the unique nature of its rocket-launching business, which it said has accounted for the majority of mass lofted into orbit over the past three years, and the strength of its Starlink internet business. The company also touted a $23 trillion market opportunity for its artificial intelligence offerings, arguing it is the only company that can escape the limitations of earthbound businesses by putting data centers in space. It expects to deploy AI compute satellites as early as 2028.

The wealth creation from the IPO is extraordinary by historical standards. According to Hill.com, an investment platform, more than 4,400 current and former SpaceX employees are expected to become millionaires, with about 400 projected to gain $100 million or more. "Most IPOs typically only make the founder a billionaire," said Andrew Benson, founder and chief executive officer of Hill.com. "SpaceX pushing 400 people past the $100 million threshold is rare and shows the scale of wealth being generated."

SpaceX generated $18.7 billion in revenue last year but posted $4.9 billion in losses, according to its SEC filing. The company recently acquired Musk's AI startup xAI and the X social media platform, bringing three of his ventures under one corporate umbrella. Musk, who owns 42% of SpaceX's common stock, briefly joined some Zoom meetings with potential investors during the roadshow, one of the people said. His net worth is estimated at $792.8 billion, according to Forbes, making him the world's wealthiest person.

This article is for informational purposes only and does not constitute investment advice.