SpaceX on Thursday priced the biggest-ever US initial public offering at US$135 per share, making Elon Musk’s rocket and spacecraft manufacturer one of the world’s most valuable companies.

The IPO raised a record US$75 billion on the sale of 555.56 million shares, valuing the space, satellite and AI provider at US$1.77 trillion, a record for an initial offering.

Thursday’s pricing caps off a months-long effort that realized Musk's most ambitious project yet even as he stood a handful of financial traditions on their heads, and as some analysts question whether its lofty valuation is justified.

SpaceX will rank seventh among US-listed firms when its shares begin trading on the Nasdaq on Friday, though it lost money last year and other mega-caps far outpace its revenue.

That values the company more highly than firms as varied as JPMorgan Chase, Berkshire Hathaway and Eli Lilly, as well as tech giants such as Meta Platforms and Musk’s own Tesla.

"The real test will be how the market digests the IPO over the next several weeks, not just one day,” said Adam Sarhan, chief executive of 50 Park Investments in New York.

“The pricing came in just about right - not too hot, not too cold. Clearly retail investors are buying and, at this stage, they are a big component of this. We need to see follow-through after the first day of trading."

The sale breaks the previous record for the largest-ever IPO held by state-run oil giant Saudi Aramco, which raised US$25.6 billion on Riyadh's exchange in December 2019, valuing it at US$1.71 trillion.

In inflation-adjusted terms, Aramco raised US$33.2 billion for a US$2.21 trillion value.

SpaceX's US$1.77 trillion valuation, based on 13.08 billion shares outstanding, could rise further should the underwriters exercise their right to sell additional shares, a decision typically made within 30 days after the offering.

The company communicated the IPO price just after 3 pm EDT, when its pricing meeting with bankers concluded and US markets were still open, in a "free-writing prospectus" filed with the Securities and Exchange Commission.

SpaceX issued a press release half an hour later. Typically, the pricing meeting and the announcement of the IPO price take place after regular trading closes at 4 pm, because securities issuers are wary of price-moving macroeconomic or news events affecting a share sale during regular trading.

The communication is the latest example of Musk executing the most ballyhooed Wall Street debut on his own terms.

SpaceX set aside 30 percent of shares for retail buyers, an unusually large number, and decided on Thursday’s offering price before the roadshow that bankers and investors have long used to negotiate IPO terms.

"The SpaceX pricing is really in uncharted territory. I've never seen the price announced instead of the normal process of price discovery based on orders," said Rick Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey.

"There's such an emphasis on retail which is probably a little indifferent to the pricing." Musk also pushed, with mixed results, for early index inclusion that would create a broader base of buyers of SpaceX stock, and structured the company’s governance to preserve strong founder control.

Musk will hold 82 percent of SpaceX's voting power after the IPO.

The US IPO market is set to rebound sharply this year after an earlier bout of volatility. Goldman Sachs has forecast proceeds could quadruple to a record US$160 billion in 2026, driven by a pipeline that includes not just SpaceX, but also artificial intelligence companies OpenAI and Anthropic. (Reuters)



Edited by Cecil Wong