SpaceX’s $75 billion offering will impact a lot more than just the employees and investors who are looking to cash in on their stock. It will also be a gauge of enthusiasm for tech IPOs, helping set the stage for other mega IPOs like Anthropic and OpenAI. If SpaceX’s IPO doesn’t take off, “you’d see a pullback in institutional capital that would have been available for other IPOs that want to go later this year,” said Ran Ben-Tzur, co-head of the capital markets and public companies group at law firm Fenwick. He said some of his IPO-bound clients are watching SpaceX with bated breath to decide if they will follow it on the path to public markets.
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SpaceX’s $75 billion offering will impact a lot more than just the employees and investors who are looking to cash in on their stock. It will also be a gauge of enthusiasm for tech IPOs, helping set the stage for other mega IPOs like Anthropic and OpenAI.
If SpaceX’s IPO doesn’t take off, “you’d see a pullback in institutional capital that would have been available for other IPOs that want to go later this year,” said Ran Ben-Tzur, co-head of the capital markets and public companies group at law firm Fenwick. He said some of his IPO-bound clients are watching SpaceX with bated breath to decide if they will follow it on the path to public markets.
But the ripple effects hardly end there. The Nasdaq Composite and other indices are expected to add SpaceX’s stock faster than usual, potentially affecting nearly everyone’s 401(k)s and broader market momentum around the globe. A poor performance could roil shares in other tech giants like Nvidia or Alphabet, if SpaceX shareholders need to sell shares in other stocks to offset their losses.
The IPO will test market interest in space and AI. A whole ecosystem of space startups is watching SpaceX to help determine what valuation multiple public investors will validate, a signal that will shape their private valuations and their ability to raise more money.
SpaceX’s public valuation will also help determine the potential IPOs of Anthropic and OpenAI, since SpaceX’s artificial intelligence unit represents 17% of its total revenue. SpaceX is currentlytargeting a $1.75 trillion valuation, including the extra possible shares sold, my colleague Valida reported today. That would be 94 timeslast year’s revenue. Anthropic’s latest $900 billion valuation round looks cheap by comparison, at just 19 times its recent annualized revenue.
If all goes well, SpaceX could provide the startup investment community with hundreds of billions of dollars of fresh cash. As we reported, firms like Valor Equity Partners and Founders Fund could make the best investment returns in history. In turn, their own investors, which can include universities, hospitals, and pension funds, could also reap the benefits.
Real estate markets will also be affected, especially in major SpaceX hubs likeparts of Los Angeles and southern Texas. The way the stock trades will influence how many newly minted millionaires…and billionaires…are ready to make big purchases, potentially stoking property prices and inventory. It will also determine how much would-be entrepreneurs have in their coffers to branch out on their own. Typically, after large IPOs, some of the employees start new businesses.
It’s also mid-term election year in the U.S. and stock market and economic health can affect people’s decisions at the voting booth, and ensuing policy.
When SpaceX begins trading on June 12, the bell-ringing will kick off a chain reaction.
Today on TITV
Check out today's episode of TITV in which we speak with Crowdstrike‘s former chief product officer about why Anthropic’s Mythos model doesn't scare him.
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