SpaceX’s record-breaking initial public offering expanded by another $10bn after the banks that backed the listing exercised a so-called “greenshoe” overallotment option, bringing the total raised to $85.7bn. The company announced completion of the listing in a statement confirming the additional share sale, which by itself would rank as one of the biggest IPOs in history.
The IPO initially raised $75bn from investors when it began trading on New York’s Nasdaq exchange last week. Elon Musk, the company’s founder and CEO, told employees the funds would be spent funding a “significant growth phase,” according to BBC News.
The greenshoe option is a financial mechanism that allows underwriters to sell more shares than originally planned when investor demand outstrips the initial supply. In SpaceX’s case, appetite was exceptionally high. The underwriters — including Goldman Sachs, Bank of America, and JPMorgan — exercised the option in full, purchasing an additional 83.3 million shares directly from the company to meet the huge demand.
The listing saw SpaceX shares first offered to investors at $135, valuing the company at $1.8tn. On Monday, the first full day of market trading, shares surged more than 14% to $184. The momentum showed no signs of slowing down as the new week opened, with the stock climbing to $184 (€158.62).
According to Bloomberg calculations, SpaceX’s successful market debut has officially pushed Musk into trillionaire territory. Because the vast majority of his wealth is directly tied up in SpaceX equity, his new status remains entirely dependent on the market. A sharp decline in the stock could strip him of the title just as quickly as continued gains could multiply it.
Analysts have warned that SpaceX’s sky-high valuation leaves little room for error, raising questions over whether the loss-making company can sustain its current growth amid growing regulatory scrutiny and rising competition in the commercial space sector.