SpaceX's initial public offering (IPO) raised $10bn (£7.5bn) more than initially thought, bringing the total to $85.7bn, according to BBC. The rocket company pulled off the biggest IPO in history when it joined New York's Nasdaq stock exchange last week.
IPO Details
The listing had raised $75bn from investors, which Elon Musk told employees would be spent funding a "significant growth phase", BBC reported. However, the banks which backed the IPO exercised a so-called "greenshoe" clause, which let them purchase an extra $10bn of SpaceX shares. The extra $10bn raised, revealed in a statement by SpaceX announcing the completion of the listing, would by itself rank as one of the biggest IPOs in history.
Greenshoe Option Explained
The financial mechanism, known as an overallotment option or "greenshoe" option, is designed to prevent wild price swings and ensure a smoother launch by letting the banks handling the listing sell more shares than originally planned. In SpaceX's case, appetite was exceptionally high. The underwriters, which included Goldman Sachs, Bank of America, and JPMorgan, exercised the option in full, purchasing an additional 83.3 million shares directly from the company to meet the huge demand, according to BBC.
Musk's Trillionaire Status
The listing also saw Musk elevated to trillionaire status, according to Bloomberg calculations cited by BBC. Because the vast majority of his wealth is directly tied up in SpaceX equity, his new milestone status remains entirely dependent on the market. A sharp decline in the stock could strip him of the title just as quickly as continued gains could multiply it.
Market Reaction and Analyst Concerns
Momentum behind SpaceX continued on Monday, with shares surging by more than 14% on their first full day of trading, to $184 (€158.62). They were first offered to investors at $135, valuing the company at $1.8tn. The momentum showed no signs of slowing down as the new week opened.
Analysts have warned SpaceX's sky-high valuation leaves little room for error, raising questions over whether the loss-making company can sustain its current growth amid growing regulatory scrutiny and rising competition in the commercial space sector, according to BBC.
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