SpaceX is now worth $2.5 trillion and the sixth largest public company in the world after shares shot 20 per cent higher overnight.
Elon Musk’s space exploration and AI company said it raised a record-breaking $85.7 billion, meaning it is now just 5 per cent away from surpassing Amazon as the world’s fifth largest public company. It is now bigger than Broadcom, Saudi Aramco and Tesla.
The second day of gains cemented SpaceX’s stellar debut on Wall Street, eclipsing the previous largest IPOs and helping make Mr Musk the world’s first trillionaire.
The stock climbed 19.7 per cent in Monday trading to $192.8, extending Friday’s 19 per cent gain after the shares first started trading on the Nasdaq at $135.
Demand for SpaceX’s shares was so strong that the banks running the sale exercised a so-called greenshoe option — in effect permission to sell extra shares when investors want more than planned.
SpaceX ended up selling nearly 639 million shares, including more than 83 million extra ones, lifting the total raised to $85.7 billion beyond the originally planned $75 billion.
It’s worth pointing out that share prices do often fall away after the buzz of its IPO has faded. Investment guru Benjamin Graham, who wrote the seminal book The Intelligent Investor, famously advised individual investors to strictly avoid buying IPOs, arguing that the system is designed to benefit original insiders and investment banks rather than the public. He warned the frenzied scenes after an IPO driven by retail speculators were dangerous and irrational.
Not everybody is happy about the success of the SpaceX IPO as protesters gathered for a second day outside the Nasdaq headquarters in New York. There were also protests against Mr Musk in Belfast where he is accused of stoking racial tensions amid rioting.
Co-founded by Mr Musk in 2002, the rocket startup has since expanded into a major satellite operator and folded in his artificial intelligence company, xAI, which includes the social media platform X, formerly Twitter.
The towering valuation rests heavily on the belief that Mr Musk will deliver on promises worthy of science fiction, including putting humans on Mars and data centres in space using as-yet unproven technology.
The two-day rally for SpaceX comes amid a broader uptick in the share market after a peace deal in the Middle East was signed by Iran and the US.
The Dow finished at a fresh record overnight, rallying with other major US indices after the announcement of a peace accord sent oil prices sharply lower.
The blue-chip index piled on 0.9 per cent. The broad-based S&P 500 gained 1.7 per cent, while the tech-rich Nasdaq Composite Index jumped 3.1 per cent.
Despite the positivity in the US and on European markets overnight, the ASX 200 is poised to open 1.2 per cent lower.
Rinehart pours $1.4 billion into SpaceX
Gina Rinehart’s Hancock Prospecting has announced its biggest ever non-iron ore investment – purchasing a $1.4 billion stake in SpaceX.
The mining firm, which is chaired by Australia’s richest person, made the huge investment as part of SpaceX’s biggest public offering.
Following its stock exchange listing on June 12, the value eclipse $US2.1 trillion – making Musk the world’s first trillionaire.
And Ms Rinehart revealed that Hancock Prospecting had become a major investor in the company, purchasing a US$1bn (AUD$1.4bn) stake.
“We see SpaceX as a rare business, led by a truly exceptional person, technically exceptional and operating in sectors that are crucial and with long-term potential,” Ms Rinehart said in a statement.
“SpaceX stands apart as the only company globally building integrated hardware and software across its core segments of space, connectivity and AI.
“This is a significant investment for Hancock and we are pleased to have received an allocation in what has been an extremely popular and oversubscribed initial public offering.”
Hancock chief executive Gary Korte said the generous allocation of shares was a strong endorsement of the company’s chairman, who has met with Mr Musk on several occasions.
“In a heavily oversubscribed IPO, Hancock’s allocation of SpaceX shares is a very pleasing result.
“In the future, we also see the possibility of mutually beneficial arrangements between SpaceX and Hancock Prospecting’s significant critical minerals investments, as demand grows for the materials and infrastructure needed to support advanced technology.
“We look forward to the potential of working with the SpaceX team on its exciting journey.”
— with NewsWire
Read related topics:Elon Musk