SpaceX, the aerospace manufacturer and space transport services company, saw its shares close 19% higher on its first day of public trading on the Nasdaq. The heavily anticipated debut on Friday saw the stock price settle at $160.95, significantly above its initial public offering (IPO) price of $135. During intraday trading, shares reached as high as $176, pushing the company's market capitalisation to an estimated $2.3 trillion.
The strong performance on its debut day was not entirely unexpected, with reports indicating that the IPO was oversubscribed by four times. This suggests considerable demand from institutional investors who may not have received their desired allocations and subsequently purchased shares on the open market. The limited 'float' of shares, with only approximately 4% made available for public trading while early investors and employees retain the majority, also contributed to the high demand.
A significant implication of this successful market entry is the reported elevation of SpaceX founder Elon Musk to the status of the world's first trillionaire. Beyond Musk, the IPO has created substantial wealth for many connected with the company. According to The New York Times, around 4,400 current and former SpaceX employees are estimated to have become millionaires, with approximately 400 achieving centimillionaire status.
The debut also represents one of the largest windfalls in the history of venture capital. Early investors have seen substantial returns; for instance, Founders Fund, which invested $600 million and holds a 3% stake, is estimated to have seen returns exceeding $50 billion based on the IPO price. Similarly, Andreessen Horowitz's stake is now valued at over $10 billion, and Sequoia's at more than $20 billion.
The company also successfully lobbied several key indices, including the Nasdaq 100, to amend their inclusion rules. This change means SpaceX will join these indices in a matter of days rather than months, further increasing demand for its stock as large institutions and funds automatically begin purchasing shares. Trading platforms, such as Robinhood, reported record-breaking traffic on Friday, reflecting the intense public interest in SpaceX's historic market entry.