Elon Musk’s SpaceX has confidentially filed for a potential record-breaking U.S. listing, sources told Reuters on Wednesday. The confidential filing marks the start of a multi-stage process for companies seeking an initial public offering (IPO) on the U.S. market. The IPO timeline, from initial filing to market debut, typically spans three to six months, influenced by regulatory reviews and overall market conditions. SpaceX designs, manufactures, and launches advanced rockets and spacecraft. The company aims to revolutionise space technology, with the goal of enabling people to live on other planets.
The U.S. Securities and Exchange Commission (SEC) permits companies to file IPO registration statements confidentially. This allows issuers to maintain control over the disclosure timeline of sensitive information. Before publicly lodging the registration statement, companies appoint a group of underwriting banks to manage the IPO process, gauge investor demand, and establish expectations for the offering’s size. A ‘quiet period’ follows, restricting public communications to avoid influencing investor interest. The underwriting banks will then prepare a prospectus, often filed confidentially by prominent issuers, enabling the SEC to privately review the details.
Following the confidential review, the registration statement, including the prospectus, is publicly filed using an S-1 form for U.S.-incorporated companies or an F-1 form for foreign issuers. This public filing gives prospective investors detailed insight into the company’s operations, risk factors, major shareholders, and the intended exchange and ticker symbol. An amended registration statement (S-1/A or F-1/A) discloses the number of shares to be offered and an indicative price range. The ‘raise’, which reveals the potential valuation, is calculated by multiplying the number of shares by the high end of the price range.
After the offering is priced and shares are allocated, they begin trading on an exchange the next day. The debut’s performance is often measured by comparing the opening price to the IPO price, reflecting investor demand. IPO performance is closely monitored in the weeks following the debut. Company insiders typically face a lock-up period, restricting them from selling shares for 90 to 180 days post-IPO.
