Three…two…one… we have liftoff.
Driving the news: SpaceX goes public today in what will be the largest IPO in history. Elon Musk’s space exploration venture turned AI-satellite-data centre smorgasbord is offering 555.6 million shares at US$135 a pop. This will raise about $75 billion at a ~$1.8 trillion valuation. The hype is high, with demand for shares reportedly outstripping supply fourfold.
Zoom in: Like George Bailey in It’s a Wonderful Life, SpaceX is promising its suitors the moon (and a whole lot more). In its IPO prospectus, the company said its total addressable market is $28.5 trillion, with ambitious plans like orbital data centres, lunar launch systems, and a colony on Mars.
The document does acknowledge that some endeavours will require “technologies that do not exist” and “may not achieve commercial viability.”
Why it matters: It used to be that companies would go public in order to get big instead of entering the market when they were already giants. Today, SpaceX is ushering in an age of mega-IPOs where offers generate so much demand they might cause market distortion.
Stocks are already floating around record highs, and investors don’t have too much spare cash lying around. Other sectors of the market might be drained to free up the money, reorienting market concentration.
What’s next: Anthropic and OpenAI will be joining the fray later this year. Their IPOs, along with SpaceX’s, will likely make it so the U.S. stock market gets 50% of its value from AI-linked stocks.—QH
