SpaceX has officially priced its initial public offering at $135 per share, selling 555.56 million shares to raise a staggering $75 billion. The deal values the rocket, satellite, and artificial intelligence company at approximately $1.77 trillion, placing it ahead of both Tesla and Meta Platforms in market capitalization as trading begins on the Nasdaq under the ticker "SPCX."
Market Impact on Tesla
Tesla shares experienced notable pressure this week, with the stock falling nearly 10% before stabilizing slightly. Early Friday, TSLA traded at $396.24, down 0.7%. Analysts attribute the decline to investors selling Tesla stock to raise cash for the SpaceX IPO, which featured an unusually large retail allocation of 30% of shares. Gary Black of The Future Fund noted that many retail traders buying SpaceX this week "will lighten up on their TSLA positions to fund their SPCX shares."
Record-Breaking IPO Details
The SpaceX IPO is the largest on record, drawing significant retail interest. Reuters reported that the retail allocation alone represented about 2% of Tesla's market cap, intensifying selling pressure on TSLA. Elon Musk will retain 82% of voting power after the deal. Adam Sarhan, CEO of 50 Park Investments, commented, "The real test will be how the market digests the IPO over the next several weeks, not just one day."
Wall Street Diverges on Valuation
Analyst coverage of SpaceX has been mixed. Oppenheimer initiated coverage with an "outperform" rating and a $190 price target, with analyst Timothy Horan describing the company as "the only vertically integrated AI company with the required capital, data, LLMs, hardware, manufacturing and engineering talent." New Street Research set a $165 target, while Morningstar's valuation came in at $780 billion, less than half the IPO price.
Broader Market Effects
The listing has rippled beyond Tesla. JPMorgan data cited by Reuters showed hedge funds trimmed large U.S. tech holdings before the debut. All Magnificent Seven stocks have declined since last Friday, including Tesla. The Roundhill Magnificent Seven ETF is down over 2.4% since June 5 as investors moved out of risk ahead of the SpaceX launch.
Regulatory and Trading Considerations
Regulators and exchanges are working to ensure smooth trading on day one. Reuters reported that asset managers seeking to launch leveraged SpaceX ETFs were told to wait until Monday. Matt Markiewicz of Tradr ETFs noted, "There is a lot at stake; these products could end up holding a total of more than $10 billion" in assets. For Tesla, Friday's trading will be crucial in determining whether the SpaceX launch represents a short-term cash crunch or establishes a lasting alternative for investors seeking Musk exposure.
