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Financial experts have spoken out over Elon Musk's latest big move, warning the incredibly hyped SpaceX stock could actually be worth just half its stock price as shares begin trading.
SpaceX is listing on the Nasdaq today, and the numbers involved are staggering enough to make investors do a double take. But amid the excitement, financial experts are warning that the hype may be dramatically outpacing reality.
SpaceX raised $75 billion through its initial public offering, selling 555,555,555 shares of Class A common stock at $135 per share. That values the company at $1.77 trillion, making it one of the highest-value stock listings in history.
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Banks underwriting the deal have also been granted an over-allotment option to purchase an additional 83.3 million shares, which could push the total size of the Initial Public Offering (IPO) to approximately $86 billion.
According to the Financial Times, SpaceX attracted orders for more than three times the number of shares on offer, with strong interest from both institutional investors and retail buyers.
Elon Musk is already the richest person on the planet, and if SpaceX shares trade at or above $135 when markets open, the combined value of his holdings could tip him over the $1 trillion mark. This would make the tech mogul the first man in history to reach that threshold.
Through a combination of Class A and Class B shares, Musk will retain roughly 40% of SpaceX's total equity, giving him more than 84% of the company's voting power despite it now being publicly listed.
Despite the market looking positive for SpaceX, investment research group Morningstar has issued a worrying statement for the company (via the Guardian).
The firm noted SpaceX's value at just $63 per share which is less than half the IPO price of $135.
They warned of a 'major disconnect between market expectations and underlying fundamentals,' noting that the company is trading at 92 times last year's revenue.
Michael Field, chief equity strategist at Morningstar, has suggested investors sit out the IPO entirely and wait for 'a more attractive entry point down the line.'
The listing is being closely watched as a test case for what could follow, as both Anthropic and OpenAI have also signalled they are preparing to go public, likely within the year. The way the market receives SpaceX could set the tone for a wave of high-profile tech IPOs to come.
