SpaceX IPO sees strong early oversubscription

SpaceX (SPCX.O) has attracted investor demand of about $150 billion for its initial public offering (IPO), roughly twice the $75 billion it is seeking to raise, according to two people familiar with the matter on Friday, News.Az reports, citing Reuters.

An oversubscription rate of about two times would typically be considered modest for many highly anticipated stock market listings. However, bankers and investors said the level of demand is still notable for the SpaceX offering, given that it is expected to be the largest IPO ever.

The company remains in the early stages of the marketing process, the sources cautioned. Investor demand is still expected to change before the IPO is priced next week.

The sources also said that some large institutional investors usually submit orders later in the IPO process. As a result, the current subscription figures reflect indications of interest rather than final allocations, which will only be determined at pricing.

The sources requested anonymity because the matter is confidential. SpaceX did not respond to a request for comment. Bloomberg reported on Friday that the IPO had been oversubscribed.

SpaceX has launched a campaign this week aimed at persuading investors that its IPO provides access to trillions of dollars in new markets created by its space launch, internet connectivity, and artificial intelligence businesses.

“Lots of people will have to explain why they don't own it rather than justifying a decision to buy it,” said a hedge fund manager.

The company’s roadshow presentation highlighted the uniqueness of its rocket-launching operations, noting that it has accounted for the majority of mass sent into orbit over the past three years, as well as the strength of its Starlink internet service business.

SpaceX also promoted what it described as a $23 trillion market opportunity for its artificial intelligence initiatives, stating that it is the only company capable of overcoming the constraints of Earth-based businesses by using space to build AI computing capacity expected to generate substantial future demand.

According to SpaceX, U.S. electricity generation and computing capacity growth have lagged behind China, partly due to regulatory and infrastructure challenges affecting large projects in the United States. The company said this gap could be addressed by deploying data centers and other infrastructure in space using its launch capabilities.

“By dramatically reducing the cost of access to space, we have been able to expand our mission to address some of the Earth's most pressing challenges, including bridging the digital divide by aiming to connect over three billion unconnected people to the internet and humanity's collective knowledge,” SpaceX said in its roadshow presentation.

News.Az 

By Nijat Babayev