After nearly two and a half decades as a private company, SpaceX made its biggest stock market debut in history on Friday. Public trading began around midday with shares opening at $150, which quickly jumped double-digit percentage points and sent the company’s value above $2tn, where it remained close to the market. The company’s initial public offering made the company’s CEO, Elon Musk, the world’s first billionaire.
“It’s certainly hard to believe that a small company that started in a warehouse in El Segundo is now going public with the largest IPO of all time,” Musk said in a speech at SpaceX headquarters on Friday morning. He reiterated the company’s mission to “multiply humanity” and “take fiction out of science fiction”.
Company executives rang the bell to open trading as Elton John’s Rocketman played on the floor of the Nasdaq exchange in New York City.
“Today, we’re making history again. We have a history of making history,” SpaceX President Gwen Shotwell said from the Exchange Building. Shotwell announced that the company had launched a Falcon 9 rocket from the Cape Canaveral Space Force Station in Florida on Friday morning to carry 29 Starlink satellites into low-Earth orbit.
SpaceX began public trading at $150 per share, up from its previous open price of $135. During the company’s first day of business, SpaceX saw its stock pop, hitting an all-time high of $176 per share. At the market close, the company’s shares traded at $160, up 19% from the opening price – valuing SpaceX at a historic $2.1tn.
SpaceX founder Musk has a large stake in the company as a majority shareholder, thus Investor excitement during Friday’s trading justified the eye-popping assessment, with him becoming the world’s first billionaire, with Forbes estimating his net worth at $1.1tn at the close of trading. Mogul is also the CEO of Tesla, which is worth $1.2 trillion, and his stake in the EV maker is worth about $300 billion.
SpaceX’s IPO comes during what is predicted to be a banner year for public offerings of artificial intelligence companies, including a group that is part of the rocket maker as an acquisition of Musk’s AI startup, xAI. Rivals OpenAI and Anthropic have also filed to go public sometime this year and are predicted to raise record valuations of around $1tn, turning the US stock market towards AI companies.
Musk has said that the reason SpaceX is trying to raise billions of dollars to go public is to get the capital needed to further explore space and build human colonies on other planets.
“Our mission is to create the systems and technologies necessary to make life multidimensional, understand the true nature of the universe, and spread the light of consciousness to the stars,” reads SpaceX’s investor prospectus.
SpaceX is a combination of several of Musk’s businesses, including satellite maker and internet service provider Starlink, xAI, social media platform X and the SpaceX rocket business.
Despite the expansion, the company is not profitable. Last year, SpaceX generated revenue of $18.7bn, while recording an operating loss of $4.3bn. For comparison, social media giant Metta took in more than $200bn in revenue last year with net income of $60bn.
An unusual IPO
SpaceX’s highly anticipated IPO came with an unusual set of conditions. The company accepted or gave up a share price of $135 before trading began., Instead of providing investors with a traditional range of prices. Therefore, buying was mostly based on investor enthusiasm at that fixed price rather than demand based on an array of prices. SpaceX reportedly stopped taking orders on Wednesday.
Earlier this week, reports from various news outlets indicated that investor demand was four times oversubscribed, meaning SpaceX was seeking to raise $75bn with its IPO, which could raise investment to $250bn. This drew the ire of Massachusetts Senator Elizabeth Warren, who called on the Securities and Exchange Commission (SEC) to delay the company’s IPO over possible “false or misleading accounting or valuation.”
SpaceX’s IPO has market watchers on high alert. Along with the lack of profits, some analysts say the price is so big for a company that’s burning cash on its AI build — xAI is spending big on data centers — and is primarily run by one man — Musk, who commands about 85 percent of SpaceX’s voting shares — that could potentially set it up as a volat.
A company’s debut on Wall Street could also strengthen its grip on the financial system. Its shares will reportedly be distributed to index funds shortly after its IPO, much faster than most companies go public, though not notably in the S&P 500. These funds hold people’s retirement savings and pension plans, meaning individual investors could unwittingly face financial risk if SpaceX’s share price falls.
For SpaceX employees, however, the record-shattering valuation means they’re about to get a lot richer. According to the New York Times, more than 4,400 current and former employees are expected to become millionaires through the IPO, with 400 each receiving $100 million or more.
Gabriel Zucman, a French economist who studies extreme wealth, said the consolidation of capital brought in by the SpaceX, OpenAI and Anthropic IPOs could have profound effects on the economy and society – the likes of which have not been seen since the last century.
“There is a fundamental tension in democratic societies between extreme wealth … and the prospects for a well-functioning democracy,” Zucman said. “After World War II, it seemed like a lot of wealth was a thing of the past,” but now, he said, “the AI boom is making billionaires by the day” and the first trillionaires in sight.
