SpaceX is accelerating its largest IPO in history, with plans to announce the terms of the offering as early as this Wednesday, with a target valuation of approximately $1.75 trillion to $1.8 trillion and a proposed fundraising of up to $75 billion.
According to sources cited by The Wall Street Journal, SpaceX plans to submit an updated version of its IPO prospectus on Wednesday afternoon, disclosing its target offering price range for the first time and officially launching the IPO pricing process. SpaceX plans to sell less than 5% of its shares, with a total value of approximately $60 billion to $80 billion, and a target valuation of $1.75 trillion to $1.8 trillion.
Bloomberg reported that finalizing the terms one night before the roadshow would give investors more time to evaluate the valuation - especially considering SpaceX's plan for a relatively short roadshow, with pricing possibly announced as early as June 11th and listed on the NASDAQ exchange on June 12th; SPCX" Formally listing and trading the code.
One of the focuses of this issuance is the extremely low underwriting fee rate. According to Bloomberg, SpaceX is in talks with underwriters to lower the fees to below 0.75%, much lower than the 4% to 7% for regular IPOs. This tough measure directly suppressed the market's expectations for underwriting earnings from several major IPOs following this year, although the banks involved in this listing are still expected to receive approximately $500 million in underlying underwriting fees.
If the fundraising target of 75 billion US dollars is achieved, it will surpass Saudi Aramco's IPO financing record of 29.4 billion US dollars set in 2019 and become the largest IPO in history. At the same time, SpaceX's IPO process is taking place at a time when the AI funding competition is intensifying. Anthropic has secretly submitted an IPO application, and Alphabet has announced plans to raise $80 billion through an equity offering.
Issuance Structure: Small scale Sale, Significant Increase in Valuation
According to sources cited by The Wall Street Journal, SpaceX plans to sell less than 5% of its shares in this IPO, which is much lower than the typical IPO sales ratio and corresponds to an issuance size of approximately $60 billion to $80 billion.
This valuation is significantly higher than SpaceX's valuation of approximately $1.25 trillion after acquiring AI company xAI earlier this year. Bloomberg News previously reported that SpaceX's current target valuation is at least $1.8 trillion.
According to regulations, the company can officially begin market promotion 15 days after the IPO application is publicly announced. SpaceX will launch a roadshow in New York later this week, where the company's management will meet with large institutional investors.
According to the report, the details and specific schedule of various issuances may still be adjusted before the document is updated on Wednesday afternoon.
Extreme pressure on Wall Street underwriting rates
Faced with a fundraising scale of up to $75 billion, Wall Street investment banks made significant concessions in rate negotiations.
According to Bloomberg citing informed sources, although underwriting fees may be lower than 0.75%, this will still be one of the largest IPO fee cases in history. Historical data shows that the fees for ultra large IPOs are generally higher than 1%, with the last extreme low fee of 0.75% dating back to 2010 when the US Treasury arranged for General Motors to go public. At that time, Wall Street was eager to rebuild public trust after the financial crisis, and thus accepted this bottom line rate.
In this massive underwriting consortium consisting of 23 banks, Goldman Sachs, Morgan Stanley, Bank of America, Citigroup, and JPMorgan Chase served as lead underwriters. Goldman Sachs and Morgan Stanley will receive the highest fee sharing due to their core roles.
Among them, Goldman Sachs is responsible for stock settlement and fund collection, and handles a large number of orders in early trading. Morgan Stanley will serve as the Stable Market Manager, responsible for leading the opening trading on the first day of listing. JPMorgan Chase played an additional role as a "party planner" and plans to hold a listing celebration for SpaceX at its new headquarters in Midtown Manhattan next week.
Triggering a 'stress test' of capital market liquidity
The listing of SpaceX has historical significance in terms of both scale and industry impact.
If the fundraising target of $75 billion is successfully achieved, it will easily double and surpass Saudi Aramco's record of $29.4 billion set in 2019. However, the focus of market attention is not only on SpaceX itself, but also on the spillover effects it brings.
At present, it is a white hot stage where top technology and AI companies are competing for capital.
Anthropic, an artificial intelligence company, has secretly submitted a draft application for listing, attempting to enter the capital market ahead of others, while its competitor OpenAI is also actively preparing for an IPO. The industry is concerned that the ultra-low fees set by SpaceX may become a new industry reference for subsequent listed companies such as Anthropic and OpenAI, further squeezing Wall Street's profit margins in this IPO cycle.
In addition, Alphabet announced a record breaking $80 billion equity issuance plan on Monday evening. The intensive implementation of these large-scale financing projects in a short period of time will undoubtedly greatly test the upper limit of Wall Street's ability to mobilize public market funds.
