tech
SpaceX IPO: The First Week
Last week, we published three deep dives into SpaceX's S-1:
TL;DR
- SpaceX's IPO raised $75 billion initially, expanding to $85.7 billion after the Green Shoe option exercise, marking the largest IPO in history.
- The stock price surged nearly 50% from its IPO price by the end of its first four trading days, briefly touching a market capitalization of approximately $3.0 trillion.
- A new $920 million per month compute rental agreement with Google for SpaceX's xAI division provides a significant, contracted revenue stream.
- Options trading for SpaceX shares began with record volume, indicating high investor interest and potential for amplified market moves.
- Upcoming index inclusions by S&P Dow Jones, Russell, and MSCI are expected to drive mechanical buying from index funds.
- Despite the rally, the stock experienced a normal pullback on its fourth trading day, highlighting the aggressive valuation multiples relative to the signed Google contract.
- Key risks remain, including the 'bundling problem' (investors must buy the whole package), extreme governance risk, and high capital expenditures.
- The upcoming quarterly earnings report will be crucial for scrutinizing Starlink revenue, xAI burn rate, and validating the overall valuation thesis.