US-SPACE-AEROSPACE-SPACEX-STARSHIP

US-SPACE-AEROSPACE-SPACEX-STARSHIP

Featured image by Ronaldo Schemidt/Getty Images.

When SpaceX starts trading on the Nasdaq on Friday, investors will be watching whether the largest IPO ever can stay above its offering price on a slim float, unusually large retail buy-in and a rolling lockup.

On Thursday, SpaceX said it sold 555.6 million shares at $135 per share, raising $75 billion in the largest IPO on record. Underwriters have a 30-day option to purchase an additional 83 million shares.

The outcome of SpaceX’s IPO, investors say, will have broad implications and is expected to set the tone for the rest of the companies in the 2026 IPO pipeline, including OpenAI and Anthropic, which recently filed draft documents with the SEC.

“If the price jumps—and, importantly, stays up by the time of these IPOs later this year—that’s going to make institutional investors much more willing to pay up for the high valuations on OpenAI and Anthropic,” said Jay Ritter, a professor at the University of Florida’s Warrington College of Business. “Probably, the price is going to jump on the first day, but if it starts deteriorating before Anthropic and OpenAI go public, that’s going to make it much tougher for these companies to get as high a valuation at the offer price as they otherwise would.”

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SpaceX appears to have structured its unconventional IPO mechanics to dampen volatility and keep the stock above $135 on Day One. The debut is coming against an unsettled market amid the US conflict with Iran.

SpaceX initially allocated up to 30% of its heavily oversubscribed offering to retail investors—an unusually large share—while its slim float and tiered lockup will further constrain the number of shares available when it begins trading. That retail allocation was reportedly slashed closer to 20% of the offering on Thursday.

SpaceX took an unusual approach to pricing its IPO. After expectations of a $2 trillion valuation circulated widely, the company said last week that it plans to price at $135 a share (or $1.75 trillion in valuation), and on Thursday it did exactly that. Companies typically offer a price range target and adjust it based on investor reception during their roadshow.

“It does remove the upside a little bit,” said Franco Granda, a senior research analyst at PitchBook who covers SpaceX. “For them, it’s just their way of doing it, this ‘take it or leave it’ approach.”

Meanwhile, Morningstar (which owns PitchBook) valued the company at $780 billion, or just $63 per share, in a recent report.

Investors will also be looking ahead to medium- and longer-term signals, including updated company financials when SpaceX reports its Q2 earnings, as well as how public market investors will view Musk’s control over the company through its dual-class share structure.

“People are going to be buying this stock because of Elon Musk,” said Angelo Bochanis, an analyst at Renaissance Capital covering SpaceX. “They believe in the man. They believe in the mission. And they don’t really care about what multiple they’re buying it at, right?”

Investors will expect Musk to funnel much of the IPO proceeds into SpaceX’s data center buildout, which has been driving much of the company’s capital spending.

“The markets are telling us that the returns to investing in the picks and shovels of AI is a very promising opportunity,” said Michael Ewens, a finance professor at Columbia Business School. “If you have expertise in an existing AI infrastructure, like they do, it would make a lot of sense.”

Anthropic struck a deal to pay SpaceX $15 billion a year through 2029 for compute, and Google recently signed a cloud deal that pays Musk’s company $920 million a month.

The company reported $10.1 billion of total capital expenditures in Q1, driven by $7.72 billion of AI capex. It also carries a heavy debt load of $29.1 billion, but its IPO filings did not disclose plans to use the proceeds to pay down that debt.

Starlink is SpaceX’s only currently profitable business line. Analysts and investors hope the company’s initial quarterly earnings report, expected in July, will disclose its churn on retail and enterprise AI subscriptions, showing how it’s faring in that competitive market.

“Capex is going to be huge,” said Mike Alves, founder of VIDA Vision Fund and a SpaceX investor. “But if you’re in it for the long run, you keep that in mind. There’s going to be a lot of money spent. They may not be profitable for the next two, three years. But, knowing what the goal is, I think it’s a no-brainer.”

This article originally appeared on PitchBook News