SpaceX Reportedly Tells Banks It Won’t Change Its Share Price For Its IPO
SpaceX has told banks working on its IPO that it won’t change its share price, currently set at $135, according to a new report.
Reuters detailed that the stance means that the company’s CEO, Elon Musk, intends to hold the IPO according to his preferences, in contrast with Wall Street tradition.
The outlet cited three sources who claimed demand for the company’s upcoming shares is insatiable.
The company is seeking a valuation of approximately $1.75 trillion in its planned initial public offering and aims to raise at least $75 billion through the offering and has shared the valuation target with investors during preliminary meetings ahead of its IPO roadshow.
The valuation includes a greenshoe option that would allow underwriters to sell additional shares if investor demand exceeds the initial allotment.
SpaceX’s IPO is expected to be structured as an all-primary offering, meaning proceeds would go directly to the company rather than existing shareholders, according to the news agency. Reuters reported that investor presentations are scheduled to begin this week as the company prepares for its stock market debut.
Founded by Elon Musk in 2002, SpaceX has grown into a dominant force in the global space industry through its Falcon rocket program, cargo and crew transportation missions, as well as Starlink satellite internet network. The company has become a key launch provider for commercial customers, governments and NASA, while expanding broadband services through Starlink across dozens of countries.
SpaceX has reportedly been negotiating underwriting fees below 0.75%, an unusually low level for a deal of this size, according to Bloomberg News. Even at that level, the offering could still generate hundreds of millions of dollars in fees for participating investment banks because of the transaction’s scale.
Goldman Sachs, Morgan Stanley, Bank of America, Citigroup and JPMorgan are among the banks leading the offering, according to Reuters.
The IPO is also expected to include a directed share program. A separate Reuters report said the company plans to reserve approximately 5% of shares for selected employees and other individuals designated by company leadership, while waiving certain lock-up restrictions that often apply in public offerings.
The proposed valuation has drawn attention because it significantly exceeds some independent estimates. Research firm Morningstar recently valued SpaceX at approximately $780 billion, less than half the valuation sought in the IPO, according to Reuters. Morningstar analysts cited questions surrounding some of the company’s long-term growth assumptions and artificial intelligence initiatives.
Musk’s ownership stake in SpaceX has reached a paper value of more than $866 billion following the company’s updated initial public offering filing. Musk controls more than 82% of the company’s voting power, CNBC reported. Added to his holdings in Tesla, he would become the world’s first trillionaire.
