SpaceX courts retail investors in push for biggest IPO in history

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

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

SpaceX set out plans for a summer “roadshow” to its bankers on Monday night, according to Reuters. The process will begin on 7 June, as executives brief analysts from the 21 banks retained to work on the deal, followed by an event for retail investors on 11 June. The venue has not yet been disclosed.

While sales direct to retail subscribers were an established part of government privatisations during the 1980s, with many UK savers getting their first chance to own shares with the sale of British Telecom, privately held companies often ignore smaller investors at launch. Musk appears intent on rewriting the rules with the SpaceX initial public offering (IPO).

“Retail is going to be a critical part of this and ​a bigger part than any IPO in history,” SpaceX’s chief financial officer, Bret Johnsen, is reported to have said during the virtual meeting. Johnsen said the large retail component was by ⁠design as “those are folks that have been incredibly supportive of us and of Elon (Musk) for a long time, and we want to make ​sure that we recognise that”.

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

Analysts have compared the hype around SpaceX’s flotation, projected to be the largest in history, to the excitement that greeted Google’s launch in 2004.

In February, when it merged with Musk’s artificial intelligence venture, xAI, the conglomerate was valued at $1.25tn; over the past month, that number has moved to $1.75tn and is now – according to Bloomberg – $2tn.

The details of its offering have been closely held, although more are expected to emerge in late May, when it makes its prospectus public. The company has retained the largest banks on Wall Street to lead the fundraising, working with Morgan Stanley, Bank ​of America, Citigroup, ⁠JP Morgan and Goldman Sachs.

SpaceX generated roughly $15 to $16bn in revenue last year, with the biggest contributions coming from its satellite internet service Starlink, as well as extensive contracts with the US government for defence and space travel.

Analysts estimate revenues could reach $20bn in 2026. George Ferguson, a senior industry analyst at Bloomberg Intelligence, predicted that growth would come from the satellite and space ventures, as “peer leaders”, with xAI, which faces stiff competition from more established rivals, “likely to garner less than $1bn”.

While Elon Musk’s original space ambitions included plans for building a civilisation on Mars, these have pivoted in the past month to a different goal: datacentres in space, which proponents argue could solve energy challenges through a constant supply of solar power.

So far, however, this remains an unproven idea and is fraught with technological hurdles: solar radiation, space debris, and the more basic issue of getting the components of a datacentre into space and assembling it there. This would probably require advanced robotic systems that do not exist yet.

SpaceX aims to surmount this with a new rocket, Starship, which it bills as the world’s “most powerful launch vehicle”. Yesterday, it delayed a test launch of that rocket until mid-May.