Elon Musk is considering reserving as much as 30% of SpaceX’s initial public offering for individual investors, an unusually large retail slice aimed at harnessing his loyal following to help steady the stock after its market debut.
Musk Bets Big On Retail Loyalty
According to Reuters, which first broke the news, that would be at least three times the retail allocation typical in most U.S. IPOs, where individual investors usually get about 5% to 10% of shares.
Reuters reported on Thursday that the plan, relayed to Wall Street by SpaceX Chief Financial Officer Bret Johnsen, pairs the oversized retail allocation with an unusually hands-on approach to choosing bankers.
Rather than allowing banks to compete broadly for investors, SpaceX is assigning narrowly defined roles based on personal relationships and prior ties, though the structure is not final and could still change. As part of that effort, Musk personally chose Bank of America Corp (NYSE:BAC) to focus on U.S. retail distribution, according to Reuters.
The strategy reflects Musk’s belief that individual investors drawn to his companies may be less likely to dump shares quickly after the listing. Reuters said expected demand spans both wealthy family offices that have backed SpaceX for years and smaller investors attracted to Musk’s track record at Tesla Inc (NASDAQ:TSLA) and Starlink. The Information had previously reported that the allocation to individual investors could exceed 20%, with defined banking roles.
SpaceX Chases Record Valuation And Raise
SpaceX is also pursuing an overall valuation of about $1.75 trillion, according to Bloomberg and the Financial Times. The FT reported that executives expanded an initial $50 billion fundraising goal by another $25 billion during a Wednesday meeting with backers.
How To Invest In SpaceX
Retail investors who want SpaceX exposure before a possible IPO generally have to buy it indirectly through public companies or funds that already own SpaceX, because direct secondary-market access remains mostly limited to institutions and very wealthy buyers.
Several listed firms give indirect exposure to SpaceX via balance‑sheet stakes, including EchoStar Corp. (NASDAQ:SATS), Alphabet Inc. (NASDAQ:GOOGL) (NASDAQ:GOOG) and Bank of America Corp. (NYSE:BAC). For more concentrated exposure, investors can target mutual funds and ETFs that disclose sizable positions, including Baron Partners Fund (BPTRX) and others.
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