SpaceX, the innovative rocket, artificial intelligence, and satellite company, is gearing up for its blockbuster market debut this week. Australian investors are closely monitoring the Elon Musk-led venture, with some planning swift profit-taking while others anticipate sustained long-term growth. The company, currently valued at $US1.77 trillion, has sparked significant global interest ahead of its initial public offering.
Jack Hu, managing the $45 million Phoenix Growth Fund, secured a 1.7 per cent pre-IPO position in SpaceX, projected to reach 2.5 per cent of his portfolio. While his initial stake faces a lock-up, Mr Hu intends to acquire an additional 2 per cent via the IPO, aiming to sell quickly. He anticipates a 20 per cent pop from the $US135 listing price, driven by passive and benchmark-aware investors. Analysts expect the stock to surge given limited public shares and its fast-tracked Nasdaq 100 inclusion.
However, not all Australian fund managers share Mr Hu’s short-term strategy. Pengana Capital, an early SpaceX investor, sees no immediate urgency to exit, forecasting “meaningful upside still to come.” Contrasting this optimism, Morningstar advised against the float, valuing SpaceX at $US780 billion, significantly below its current market valuation. David Allen of Plato Investment Management considers SpaceX a potential shorting opportunity once initial demand fades, citing its “eye-watering” 100 times price-to-revenue multiple.
Retail investor demand is described as “off the charts,” with Australian brokerages CommSec and Sharesies reporting high interest. Despite this initial enthusiasm, Mr Hu cautions a “sharp correction” is probable once pre-IPO shareholders and employees can sell their stakes post-quarterly earnings. He argues the business remains “very expensive,” aligning with Mr Allen’s view that justifying its valuation requires “exceptional achievement” growth for 15 years.
