SpaceX priced 555.6 million shares at $135 each on Thursday, raising $75 billion and valuing the company at approximately $1.8 trillion. The pricing triggered after-hours gains of 5% to 11% in space sector stocks including AST SpaceMobile, Rocket Lab, Redwire, and EchoStar. Retail investors submitted over $100 billion in orders for SpaceX shares, exceeding the size of the entire offering, while 1,000 institutional investors sought allocations. Cloudflare CEO Matthew Prince referenced investment banker Matt Levine's theory that a 20% first-day IPO gain represents a 'perfect' outcome balancing investor reward and issuer proceeds. The offering included an $11 billion greenshoe option for underwriters to purchase an additional 83 million shares, with SpaceX's books reportedly oversubscribed by more than 4x at the $135 price.
Cloudflare CEO References Levine's 20% IPO Pop Theory
Late Thursday, Cloudflare CEO Matthew Prince posted on X citing a column by Matt Levine, a former Goldman Sachs investment banker, who called a 20% first-day gain the 'perfect' IPO outcome. Prince wrote, "Anyone remember what $NET's IPO 'pop' was? I like Matt Levine calling it 'perfect' --- to the penny. You have a lot more control of what happens when you price an IPO than it may seem. If @elonmusk turns out to have called it even close to perfect two weeks in advance."
Levine stated in his column that a 20% first-day jump represents the ideal balance between rewarding investors and maximizing proceeds for the issuer. He noted that SpaceX's books were reportedly oversubscribed by more than 4x at the $135 price and suggested the company likely spent months testing that valuation before the official roadshow.
Retail Investors Submit $100 Billion in SpaceX Orders
Retail investors alone submitted over $100 billion in orders for SpaceX shares, exceeding the size of the entire $75 billion deal. The company is expected to allocate at least 20% of available shares to retail buyers, leaving much of that demand unfilled.
The offering attracted 1,000 institutional investors, including major sovereign wealth funds. Saudi Arabia's Public Investment Fund, Kuwait Investment Authority, and Qatar Investment Authority are all reported to be among the large investors seeking allocations. The Kobeissi Letter, in a post later reposted by Elon Musk, noted on X that retail demand alone was nearly enough to absorb the entire $75 billion offering.
Analyst Compares SpaceX Valuation to Megacap Tech Multiples
Naeem Aslam, CIO at Zaye Capital Markets, stated on X that SpaceX's valuation has turned the excitement around its IPO into a "megacap reality check." According to Aslam, SpaceX's $1.75 trillion valuation equates to 52x forward sales, placing it between traditional space companies, telecommunications firms, and AI infrastructure plays.
His analysis showed SpaceX trading at a substantially higher sales multiple than Nvidia, Tesla, and most megacap tech companies, but below some space-sector stocks including AST SpaceMobile at 80x forward sales and Rocket Lab at 60x. Aslam said, "The chart shows it cheaper than some space peers, but richer than many AI, cloud and megacap names. This is the danger inside the hype. Investors must decide what SpaceX really is before pricing it: space company, Starlink telecom giant, AI platform, or all three."
Space Sector Stocks Show Bullish Sentiment on Stocktwits
On Stocktwits, sentiment for AST SpaceMobile was 'neutral' amid 'low' message volume; Rocket Lab and Redwire were both at 'bullish' amid 'normal' message volume, while EchoStar's reading showed 'extremely bullish' amid 'extremely high' message volume.
Over the past year, EchoStar has soared 642%, Rocket Lab has climbed 320%, and AST SpaceMobile has gained 168%, while Redwire is down 15%.
FAQ
What did SpaceX price its IPO at on Thursday?
SpaceX priced 555.6 million shares at $135 each on Thursday, raising $75 billion and valuing the company at approximately $1.8 trillion. Underwriters hold an option to purchase an additional 83 million shares, which could increase proceeds by $11 billion.
How much did retail investors order in SpaceX shares?
Retail investors submitted over $100 billion in orders for SpaceX shares, exceeding the size of the entire $75 billion offering. The company is expected to allocate at least 20% of available shares to retail buyers.
Why did Cloudflare CEO Matthew Prince reference a 20% IPO pop?
Matthew Prince cited a column by Matt Levine, who called a 20% first-day IPO gain the 'perfect' outcome balancing investor reward and issuer proceeds. Prince suggested that companies have more control over IPO pricing outcomes than investors may realize.
