SpaceX, the innovative rocket, artificial intelligence, and satellite company, is gearing up for its blockbuster market debut this week. Australian investors are closely monitoring the Elon Musk-led venture, with some planning to take quick profits, while others expect long-term growth. The company, currently valued at $1.77 trillion, has generated significant global interest ahead of its initial public offering.
Jack Howe, who manages the $45 million Phoenix Growth Fund, took a 1.7 percent pre-IPO position in SpaceX, which is expected to reach 2.5 percent of his portfolio. While his initial shares face a lock-up, Mr Ho plans to raise an additional 2 per cent through the IPO, which aims to sell quickly. He expects a 20 per cent pop from the listing price of $US135, driven by passive and benchmark-aware investors. Analysts expect the stock to rise due to limited public shares and its faster Nasdaq 100 inclusion.
However, not all Australian fund managers share Mr Ho’s short-term strategy. Pangana Capital, an early SpaceX investor, sees no immediate need to exit, predicting that “meaningful volatility is still to come.” Contrary to that expectation, Morningstar advised against the float, valuing SpaceX at $780 billion, well below its current market valuation. David Allen of Pluto Investment Management sees SpaceX as a potential shorting opportunity after initial demand dies down, citing its “eye-watering” multiple of 100 times price-to-earnings.
Demand from retail investors has been described as “off the charts”, with Australian brokerages CommSec and Sharesies reporting high interest. Despite this initial enthusiasm, Mr. Ho warns that a “sharp correction” is likely when pre-IPO shareholders and employees may sell their stakes after quarterly earnings. He argues that the business remains “very expensive”, in line with Mr Allen’s view that 15 years of “extraordinary success” growth is needed to justify its cost.
Post Comments: 38
