SpaceX plans to conduct its initial public offering (IPO) at a price of $135 per share, aiming to raise $75 billion, according to sources familiar with the situation. Elon Musk is departing from conventional practices by establishing a fixed price prior to the marketing phase of the deal.
The aerospace company intends to offer 555.6 million shares. Ongoing discussions may alter the details of the IPO before they are publicly announced, potentially as soon as Wednesday, according to the sources who requested anonymity due to the information not being public.
This approach contrasts with the typical U.S. IPO strategy, which often involves announcing a price range before marketing shares. Fixed-price offerings are more frequently seen in Europe and Asia. The Hut Group, for instance, raised $2.5 billion in a London IPO in 2020.
Reuters reported the details of SpaceX’s terms recently. A SpaceX representative did not respond to a request for comment.
Musk has a history of challenging norms associated with public companies. In 2018, while considering taking Tesla Inc. private, he tweeted about securing funding at $420 a share, resulting in a settlement with the U.S. Securities and Exchange Commission, where Musk and Tesla paid $40 million to investors without admitting wrongdoing.
SpaceX’s IPO is notable within the finance world, arriving shortly after its confidential filing in March and subsequent public filing last month. Investors are currently focused on other upcoming offerings from technology firms.
The company aims for a valuation of at least $1.8 trillion from the IPO. According to market analyst Fabien Yip, this valuation might be challenging without existing profitability, but investors are optimistic about the company’s future growth potential.
Other tech firms, like OpenAI and Anthropic PBC, are also preparing for listings, while Alphabet Inc. announced plans for an $80 billion equity offering.
SpaceX’s IPO would exceed the current record of $29.4 billion set by Saudi Aramco in 2019.
The company is expected to begin formal marketing on June 4 and price its shares as early as June 11. The timeline could be subject to minor delays.
In preparation for the IPO, SpaceX is negotiating to minimize fees paid to Wall Street firms, although banks are still projected to earn around $500 million from the offering.
More than 1,000 current and former SpaceX employees are collaborating to secure better financial advisory terms ahead of the IPO. They are evaluating financial advisers to obtain lower fees, aiming for less than 0.5% on assets under management, compared to the usual 1% fee.
Goldman Sachs, Morgan Stanley, Bank of America Corp., Citigroup Inc., and JPMorgan Chase & Co. are leading the IPO alongside 18 other banks. SpaceX, formally known as Space Exploration Technologies Corp., expects to list on Nasdaq under the symbol SPCX.
Source: finance.yahoo.com via Google News.
