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SpaceX shares made a strong start on their first day of trading on the public markets, rising 19% to close at $160.95 per share, compared to the initial offering price of $135, in one of the strongest starts seen in the financial markets in recent years.
The company raised approximately $75 billion through the largest initial public offering in history, giving it an initial valuation of $1.77 trillion upon listing. With the stock’s gains during its first trading session, the company’s market capitalization climbed to approximately $2.1 trillion, surpassing many technology and industry giants.
Elon Musk becomes a “trillionaire”
The company’s soaring stock price directly impacted the wealth of its founder and CEO, Elon Musk , whose net worth surpassed the trillion-dollar mark for the first time, making him the first person in modern history to reach this level of wealth. Employees and early investors also reaped substantial gains on paper, benefiting from the significant increase in the company’s share price following its IPO.
Investors ignore concerns
Prior to the IPO, the size of the offering and the company’s trillion-dollar valuation raised numerous questions among investors and analysts, particularly given the company’s continued heavy investment and lack of consistent net profitability by traditional metrics. Some also warned that the massive size of the offering could drain liquidity from the rest of the market and put downward pressure on other stocks.
But the opposite happened. The stock opened more than 11% above its IPO price, before its gains during the session ranged between 20% and 30% at times, reflecting strong demand from both retail and institutional investors. Investors are betting on Musk’s long-term vision, which spans from rocket launch services and satellite internet to artificial intelligence infrastructure and future data centers that may even operate off-planet.
The real challenge begins now.
Despite the success of the offering, observers believe that the real test for the company will begin in the coming months.
Investors are eagerly awaiting the stock’s potential inclusion in the Nasdaq 100 index, which could prompt index-linked investment funds to purchase between $7 billion and $10 billion worth of shares. The company is also preparing to announce its first financial results as a publicly traded company, expected in July, at which point revenues, cash flows, and growth rates will be subject to unprecedented market scrutiny.
Investors are also awaiting the end of the lock-up period for founders and early investors, a phase that allows insiders to sell a portion of their holdings. This could increase stock volatility as additional shares enter the market. While the IPO took off strongly on its first day, the company’s ability to justify its high valuation and maintain its growth momentum will be the decisive factor in determining the stock’s trajectory in the coming years.
