SpaceX SPCX stock jumped nearly 20% from its IPO price during its first day of trading, finishing the session at USD 160.95 after having been priced at USD 135.00, in the largest stock offering in history.
Having cleared takeoff, the stock has hurdles ahead as investors gauge whether it can justify its valuation and withstand selling by pre-IPO holders, which will likely dwarf the volume of shares sold at the IPO over time.
On Thursday, SpaceX sold 555.6 million shares at USD 135 per share, raising USD 75 billion in the largest IPO on record. Underwriters have a 30-day option to purchase an additional 83 million shares.
SpaceX is seen as having structured its unconventional IPO mechanics to dampen volatility and keep the stock above USD 135 on Day One.
The company initially allocated up to 30% of its heavily oversubscribed offering to retail investors—an unusually large share—while its slim float and tiered lockup further constrain the number of shares available. That retail allocation was reportedly slashed closer to 20% of the offering on Thursday.
With the launch now history, the company will have to live up to lofty expectations. While the IPO was priced at USD 135 per share and a USD 1.77 trillion valuation, Morningstar equity research pegs SpaceX’s value at $780 billion, or just $63 per share.
“With a small initial float boosted by almost every investment bank on the planet, buoyant investor appetite for AI infrastructure bids, and an unprecedented path to inclusion in the Nasdaq 100 Index just 15 trading days after the IPO, we expect SpaceX’s share price will likely survive separation and even ascend toward orbit, at least for a time,” Morningstar equity analyst Nicolas Owens wrote Friday.
Earnings Could Be the First Key Test
The first key test will likely be the company’s inaugural earnings report. A date for its second-quarter earnings has not yet been announced, but results are expected in late July or early August.
Owens says he will mainly focus on Starlink’s subscription growth rate and how much Starship research and development spending the company reveals. “Starlink is the biggest revenue and profit driver for the company right now,” he says. Meanwhile, R&D spending will provide a window into how much SpaceX must spend before Starship goes commercial.
A Wave of New Shares Hit the Market This Summer
Two days after that earnings report, pre-IPO investors will be free to sell a huge block of shares. According to SpaceX’s second amended S-1 filing from June 3, holders of restricted shares are entitled to sell the equivalent of 7% of outstanding shares. “That’s more than the IPO,” observes Owens.
More shares from early investors will be free to come to market after that. All the shares owned by pre-IPO investors are eligible to be sold to the public between now and next July, including the 50% stake owned by founder Elon Musk.
That makes dilution, rather than scarcity, a potential headwind for SpaceX stock. However, Owens notes that one counterbalance might be index funds, which “float adjust their weightings [and] will increase their allocation over time as the float increases.” Still, he adds: “Investors in SpaceX should be aware that in the coming year, insider selling is very likely to greatly increase the supply of shares, so depending on the ongoing level of demand in the market, it could add to the volatility of SpaceX’s stock.”
