NEW YORK: SpaceX shares jumped 19 per cent in their Nasdaq debut on Friday, sending the company’s value past $2 trillion and making Elon Musk the world’s first trillionaire.
Investors jumped at the chance to get a piece of Musk’s sprawling empire spanning rockets, satellites and artificial intelligence after the record-setting $75 billion IPO. More than 510 million shares worth about $84 billion changed hands, even though SpaceX is currently unprofitable.
The launch was smoother than many observers had expected. SpaceX shares ended the day at $160.95, bringing its value to $2.1 trillion. The gain pushed SpaceX’s market value past Broadcom, with Amazon next in line at $2.6 trillion.
“For many investors, SpaceX is the closest thing to investing in the railroads during the Industrial Revolution and they are willing to pay the Elon Musk premium for that opportunity,” said Seth Hickle, chief investment officer at Mindset Wealth Management.
Analysts said investors should brace for volatility due to SpaceX’s small relative float and high valuation. The company’s $18.7 billion in revenue gives it a price-to-revenue ratio of roughly 112, far above other megacap stocks.
Retail investors received about 20 per cent of the allocation, far more than a typical IPO, with some celebrating an allocation of just one share.
“Seeing the company that I joined when it was just some sketches on paper become this valuable is almost surreal,” said Tom Mueller, a founding SpaceX employee.
