Musk’s SpaceX courts retail investors as it aims for record-breaking stock market flotation | SpaceX

SpaceX will kick off marketing its highly anticipated stock market debut by holding an event in June for 1,500 retail investors, as executives work to convince buyers that the aerospace-to-artificial-intelligence group should be valued at $2 trillion.

In an unusual move, the company has reserved a large portion of its shares – potentially up to 30% – for retail and non-institutional investors, banking on the popularity of its chief executive, Elon Musk, to help it raise $75bn (around £56bn) in what is expected to be the largest public offering in history.

SpaceX presented its plans for a summer roadshow to its bankers on Monday evening, according to Reuters. The process will begin on June 7 when executives will brief analysts at the 21 banks selected to work on the operation, followed by an event for retail investors on June 11. The location has not yet been revealed.

While direct sales to retail subscribers were an integral part of government privatizations in the 1980s, with many British savers having their first chance to own shares with the sale of British Telecom, private companies often ignore small investors when they launch. Musk appears to be intent on rewriting the rules with SpaceX’s initial public offering (IPO).

“Retail is going to play a critical role in this process and a bigger role than any IPO in history,” SpaceX CFO Bret Johnsen reportedly said during the virtual meeting. Johnsen said the large retail component was intentional because “these are people who have been incredibly supportive of us and Elon for a long time, and we want to make sure we recognize that.”

SpaceX will also offer its shares to investors in the UK, EU, Australia, Canada, Japan and Korea.

Analysts have compared the hype around SpaceX’s IPO to the enthusiasm that greeted Google’s 2004 launch.

In February, when it merged with xAI, Elon Musk’s artificial intelligence company, the conglomerate was valued at $1.25 billion. Over the past month, that figure has risen to $1.75 trillion, and today – according to Bloomberg – it stands at $2 trillion.

George Ferguson, senior industry analyst at Bloomberg Intelligence, said it was difficult to accurately value SpaceX because the only publicly available numbers were its revenues, as opposed to more detailed information on its profits.

“A lot of the valuation will go to xAI, which is harder to value. It’s currently a laggard in the AI ​​race,” he said. He projects revenue of $20 billion for SpaceX this year, with the AI ​​division contributing just $1 billion.

Details of the offering have been closely known, although more is expected to be revealed in late May when the company makes its prospectus public. She has retained Wall Street’s biggest banks to lead the fundraising, working with Morgan Stanley, Bank of America, Citigroup, JP Morgan and Goldman Sachs.

SpaceX generated about $15 billion to $16 billion in revenue last year, with the biggest contributions coming from its Starlink satellite internet service, as well as extensive contracts with the U.S. government for defense and space travel.

While Elon Musk’s initial space ambitions included plans to build a civilization on Mars, these shifted last month toward a different goal: data centers in space, which supporters say could solve energy challenges with a steady supply of solar power.

However, so far this idea remains an unproven idea and faces technological hurdles: solar radiation, space debris, and the more fundamental question of getting the components of a data center into space and assembling them there. This would likely require advanced robotic systems that don’t yet exist.

SpaceX aims to overcome this problem with a new rocket, Starship, which it touts as the “world’s most powerful launch vehicle.” On Monday, he delayed the launch of a test of this rocket until mid-May.

Ferguson said: “The question will be: How soon can data centers in space be realized? What would be the revenue and profit expectations on that business? And how would you factor that now into the valuation of the company? The further out you go – and we think it is further away – the more data centers in space become a drag on valuation rather than an additive.”