SpaceX shares surge 11% in biggest IPO yet
SpaceX, Elon Musk’s rocket and artificial intelligence company, completed the largest initial public offering in history by rising 11 percent when it opened in trading on Friday, making the world’s richest man the first billionaire and setting the stage for fast-growing artificial intelligence companies to hit the stock market once in a lifetime.
Shares of SpaceX started trading at $150, up from their IPO price of $135 per share. That valued the company at nearly $2 trillion, which exceeds the market capitalization of the other titans of US industry, including Walmart and General Motors combined.
At that size, the offering dethroned Saudi Aramco, Saudi Arabia’s state-owned oil company, which was valued at $1.7 trillion and raised more than $29 billion when it went public in 2019. SpaceX raised $75 billion from its offering, more than the total raised by any other USIPO in the past two years, according to research and advisory firm Renaissance Capital.
The meteoric rise in SpaceX’s share price has also catapulted Mr Musk, 54, to billionaire status. The entrepreneur, who not only runs SpaceX, but also manages the electric car manufacturer Tesla and other businesses, has long been the richest person on the planet. But hitting the trillionaire milestone is significant and further increases Mr. Musk’s wealth and influence.
Mr. Musk’s group of friends and venture capital and private equity firms were enriched by the IPO, many by billions of dollars. Thousands of SpaceX employees became instant millionaires.
Mr. Musk spent Friday at the company’s headquarters in Starbase, Texas, celebrating with employees, family, friends and investors. “It’s definitely hard to believe that a small company that started in a warehouse in El Segundo is now going public,” he told them, referring to SpaceX’s 2002 founding in Southern California. “I gave SpaceX less than a 10 percent chance of ever succeeding.
Spokesmen for SpaceX and Mr. Musk did not return requests for comment.
SpaceX’s sensational IPO paves the way for mega offerings by artificial intelligence startups OpenAI and Anthropic, each valued at nearly $1 trillion. They have never disclosed three trillion dollar entities in the same year. Their stock market debuts could signal a new era of corporate power, with SpaceX, OpenAI, and Anthropic joining the pantheon of tech giants like Google, Microsoft, Amazon, Nvidia, Apple, Netflix, and Meta.
For SpaceX, the first day of trading capped a long journey. Mr. Musk founded the company 24 years ago with the idea of making humans a multiplanetary species. For years, his dreams of private space flight seemed out of reach.
But Mr. Musk revamped the space race with partially reusable rockets and changed communications with the company’s Starlink satellite Internet service. In February, SpaceX bought his artificial intelligence company xAI, which owned social media platform X, creating a conglomerate of the tech billionaire’s various interests.
Mr. Musk has used SpaceX as a sort of piggy bank over the past two decades, securing loans from the company for himself and counting on the firm to back several struggling ventures in its orbit. This was made possible in part by Mr. Musk’s iron grip on SpaceX; it controlled around 85 percent of the shareholder votes before the IPO due to a voting share class and other corporate structures.
In its IPO, SpaceX sold more than 555 million shares, representing slightly more than 4 percent of the company’s outstanding shares. The company and its bankers courted traditional institutional investors and encouraged wealthy individuals and retail investors to buy. SpaceX also wanted several indexes to change their rules to include its stock faster than normal, which would eventually prompt managers of major index funds to buy the stock.
SpaceX’s stock price is expected to swing higher and lower in the weeks following the IPO, not necessarily because of a shift in opinion about the company, but because of certain technicalities. SpaceX is expected to face high demand for the relatively low number of shares available, which may lead to a sharp increase in prices. That could change as investor enthusiasm dies down and more stocks become available for trading.
JPMorgan analysts said this week that the recent average IPO share price gain was 32 percent after the first day of trading, but fell to a loss of 26 percent after 12 months.
Daniel Hanson, a portfolio manager at investment firm Neuberger Berman who oversees a fund with a $200 million investment in SpaceX, said the speed with which SpaceX went public — six months after Mr. Musk first announced his intentions — was an example of the “tenacity” of its executive team.
“It’s exciting to see the team being recognized by the public for what it has achieved since its inception 24 years ago,” he said.
In recent weeks, SpaceX, which has contracts with NASA and other federal agencies, has also faced questions about its business, including spending and how it can justify its valuation. In its IPO prospectus, the company said it lost more than $4.9 billion last year, compared to a profit of $791 million in 2024 due to increased spending on AI. Revenue last year was $18.7 billion, up 33 percent from the previous year.
In contrast, Meta, which owns Facebook, Instagram and WhatsApp, is valued slightly less than SpaceX at just over $1.4 trillion, even though it brings in much higher revenue and generates big profits. Last year, Meta had $201 billion in revenue and $60.5 billion in profit.
SpaceX said it plans to use the money raised from the IPO to pay off loans and fund various moonshots, including Mr. Musk’s goals of putting AI data centers into orbit, building a lunar factory and eventually sending humans to Mars.
While skeptics question whether these plans are feasible, Mr. Musk’s fans are many. In New York, an excited crowd of several dozen people gathered outside the Nasdaq building in Times Square on Friday morning, including Zach Boucher, 45, who had flown in from California overnight to see SpaceX listed on the Nasdaq stock exchange.
Mr. Boucher said he was buying more than 2,200 shares of SpaceX through Wells Fargo and would “never sell, I’m holding it for the long term.”
The moment is “like getting on the ground floor of GE or GM, or being here when Microsoft opened,” he said.
Goldman Sachs, Morgan Stanley, Bank of America, Citigroup, JPMorgan Chase and 18 other banks served as underwriters for SpaceX’s IPO.
(The New York Times has sued OpenAI and Microsoft, alleging copyright infringement of news content related to AI systems. Both companies have denied the claims.)
Joe Rennison and Lauren McCarthy contributed reporting from New York.