Elon Musk‘s SpaceX is targeting a valuation of more than $2 trillion in its upcoming initial public offering (IPO), making it a record-setting debut.
The commercial space firms is targeting a June listing at a valuation that would dwarf Saudi Aramco‘s much-hyped $29 billion debut in 2019. Executives at SpaceX plan to meet this month with prospective IPO investors and might include more details that would support the valuation, Bloomberg reported, citing sources it didn’t identify.
On Wednesday, SpaceX submitted a confidential draft initial public offering (IPO) registration to the U.S. Securities and Exchange Commission (SEC).
By filing confidentially, SpaceX can receive SEC feedback and make adjustments before its prospectus becomes public.
According to previous media reports, Bank of America, Goldman Sachs, JPMorgan Chase, and Morgan Stanley have all secured senior roles on the deal. Citigroup is also among the banks preparing the IPO.
International banks are also taking part in the process. Royal Bank of Canada, Mizuho Financial Group, and Macquarie Group are all focused on managing shares from their respective locations.
In February, Musk announced that SpaceX had acquired his artificial intelligence startup xAI. The transaction valued SpaceX at about $1 trillion and xAI at roughly $250 billion, according to a Reuters report.
Fund Managers Under Pressure
Investor Gary Black of The Future Fund LLC thinks that the Nasdaq 100’s rule changes would put significant pressure on fund managers to participate in SpaceX’s upcoming IPO.
The upcoming IPO is expected to create “intense pressure” on managers and professional investors to participate, “even at a valuation north of $1T,” because “sitting out may be too risky,” Black said in a post on the social media platform X on Tuesday, citing the recent Nasdaq rule changes.
“Fund managers fret that if they sit out the SpaceX offering and the shares soar, their performance will look dismal,” he said. He added that Musk and the bankers were “well aware” of this pressure on fund managers as SpaceX gears up to sell a “record $75B worth of stock.”
SpaceX, which has reportedly been leaning towards a listing on the Nasdaq, could benefit from the rule changes as new rules would allow the company to join the index almost immediately after its planned IPO.
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