Elon Musk’s highly anticipated initial public offering (IPO) for SpaceX is poised to offer approximately 555.6 million shares at $US135 apiece, according to recent regulatory filings. This pricing indicates a staggering valuation of $US1.77 trillion ($2.5 trillion) for the company. SpaceX, founded by Elon Musk in 2002, has grown into the world’s largest space company, specialising in rockets, space technology, and artificial intelligence.
However, research house Morningstar has advised caution, suggesting SpaceX is worth less than half the proposed valuation, estimating it at around $US780 billion ($1.09 trillion). Morningstar equity analyst Nicolas Owens stated, “We are likely to view the shares as overvalued in almost any scenario, at least in the near term,” anticipating opportunities for investors to buy at more attractive levels post-IPO. Despite these warnings, limited public share supply (just 3 per cent) is expected to collide with significant demand, particularly as the stock qualifies for fast entry onto the Nasdaq 100 index within 15 trading days. Local fund managers, including Emanuel Datt of Datt Capital, have voiced concerns that this fast-tracking mechanism means mega-cap stocks face less scrutiny, potentially attracting retail speculation.
Australian retail investors are also being courted, with CommSec facilitating share purchases and SpaceX expected to seek up to $1 billion from local punters. Sources close to the Australian Securities & Investments Commission confirmed an expected prospectus lodging. However, Stephen Mayne, a former adviser to the Australian Shareholder Association, cautioned against the billionaire founder’s “overblown spruiking.” Investor enthusiasm is evident in the BetaShares’ Space Industry exchange-traded fund, which has seen its assets balloon to $45 million, with SpaceX set to be added two trading days after its float. Major investment banks including Goldman Sachs and Morgan Stanley are underwriting the share sale.
Morningstar warns that significant selling pressure is anticipated in the months following the IPO as insider lock-ups expire and early private investors cash in. While Elon Musk has agreed not to sell his stake for at least a year, other shareholders will have multiple windows to offload shares, including customary IPO lock-up expirations around 180 days after the float, and subsequent releases tied to earnings announcements and other intervals into 2027. Early investor Pengana Capital, which holds a substantial stake through its PE1 vehicle, plans to manage its exit based on market conditions, expecting “forced buying on a large scale” once the stock joins major indices.
