Key Summary

  • Exchange Listing: SpaceX plans to debut at the Nasdaq (NASDAQ: SPCX) on June 12.
  • IPO Price: The company targets a fixed price of $135 per share.
  • Market Value: SpaceX's valuation would be $1.75 trillion, making it the seventh-biggest company in the U.S.
  • Listing Size: The proposed IPO is expected to raise $75 billion for the company.
  • Market Capitalization: SpaceX would have a market capitalization of $1.75 trillion, above that of Tesla (NYSE: T).

Article

US-based private aerospace company SpaceX (NASDAQ: SPCX) is setting a fixed price of $135 per share for its upcoming IPO, according to a confirmed report by CNBC. The move takes a more unique approach, as typically new issuers offer a price range to gauge Demand sensitivity. The fixed price would give SpaceX a valuation of $1.75 trillion, making it the seventh-biggest company in the U.S., surpassing Tesla (NYSE: T) with a market capitalization of about $1.6 trillion.

Market reaction saw shares of established telcos AT&T Inc (NYSE: T) and Verizon Communications Inc (NYSE: VZ) slip 3.94% and 2.97%, respectively. AT&T Inc (NYSE: T) now trades at $23.67, while Verizon Communications Inc (NYSE: VZ) is priced at $46.45.

In the context of the company's ambitious plans, SpaceX has been working on developing various technologies, including Starlink, its satellite internet service. The company has a history of net losses and may not achieve profitability in the future, with much of its value relying on success in these novel and untested technologies.

Institutional commentary sees Morningstar analysts warning that SpaceX is "significantly Overvalued" ahead of its blockbuster IPO. The analysts value SpaceX at $780 billion, about 48% below its private market valuation of $1.5 trillion. Dan Coatsworth, head of markets at AJ Bell, flags the potential for an eye-watering valuation as a risk to further upside.

Forward watch indicates that Tesla (NYSE: T) investors will be closely watching whether Elon Musk's ultimate goal is to combine SpaceX with Tesla, following chatter about the possibility of a Merger. The market is awaiting the debut of SpaceX at the Nasdaq on June 12 and how its valuation will impact the wider market.

Broader sector implications suggest that the hotly anticipated debut of SpaceX will disrupt the $1.6 trillion US communications industry, according to Oppenheimer, adding to its already significant market disruption potential.

 

This article is intended for informational purposes only and does not constitute Investment advice or a recommendation to buy, sell, or hold any security. All information is sourced from publicly available data. Investors should conduct their own Due Diligence and consult a qualified financial adviser before making any investment decisions.