Musk’s $1.8 trillion SpaceX IPO could be ‘highly undesirable’ for some
Summary
SpaceX plans to start selling its shares to the public with a record-breaking value of nearly $1.8 trillion, surpassing previous big IPOs. New Nasdaq rules could allow SpaceX to join major stock indexes very quickly, which might cause some concerns about its high price and the risks for investors, especially those in pension funds that must follow these indexes.Key Facts
- SpaceX’s initial public offering (IPO) is valued at about $1.8 trillion, or $135 per share.
- This value is higher than Saudi Aramco’s $1.7 trillion IPO in 2019, which was previously the largest.
- About 20% of SpaceX shares will be made available to individual (retail) investors.
- The company has received around $70 billion in orders for its stock.
- Nasdaq changed its rules to let big companies like SpaceX enter important stock indexes within 15 trading days, faster than usual.
- The S&P 500 index has not changed its rules for new companies joining.
- Some experts think SpaceX’s stock price might be too high, with estimates valuing the shares at about half the IPO price.
- Pension funds that invest in index funds must buy stocks included in those indexes, so they could invest in SpaceX without choosing to do so.
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