Investors woke on Friday to find out how many shares in SpaceX (NASDAQ:SPCX) they had secured, with demand for the record-breaking flotation so strong that many received only a fraction of the shares they had applied for.
The Elon Musk-controlled space and artificial intelligence company begins trading on Nasdaq on Friday after raising $75 billion in the largest initial public offering ever, valuing the business at about $1.75 trillion.
Retail investors are receiving an unusually large allocation of shares, though this was estimated at about 20% of the deal, not quite the 30% that Musk had intended
Marex, which operated the UK retail offer through the Winterflood Retail Access Platform, said almost 2.7 million shares were allocated to UK retail investors at the IPO price of $135 (£100.65) per share.
This means UK investors own almost $364 million or £271.4 million of SpaceX shares.
Marex said investors who applied for any amount below $2,700 worth of stock received allocations in full, while larger applications were scaled back. No investor received more than 1,000 shares.
Overall, 61% of retail investors received a full allocation, highlighting both the strong demand for the flotation and the relatively generous treatment of smaller investors. A small poll of investors found that some received only around a quarter of their request.
The rocket launch, satellite communications and artificial intelligence company will be one of the largest listed companies in the world from day one, with reports suggesting investors around the world sought as much as $250 billion of stock, leaving the offering up to four times oversubscribed.
Fundraising a success but tests to come
"The verdict is in," said Kathleen Brooks, research director at XTB, with the fundraising "a roaring success".
While the flotation is a major boost to market sentiment, she cautioned that "today comes the real test" when the stock begins trading later.
After US markets open at 9.30am local time (2.30pm BST), there will be an opening auction, where market makers aggregate the massive buy and sell orders to establish the initial fair trading price in the new shares. This could take a few hours before investors should then be able to deal as usual.
Nasdaq is fast-tracking the company's inclusion into its benchmark index, ensuring demand from tracker funds and passive investment vehicles. These funds have a 15-day deadline to buy the shares.
Dan Ives, analyst at Wedbush, called the IPO "an important moment for the broader tech sector", arguing that SpaceX sits at the centre of the next phase of the AI revolution through its ambitions in satellite communications and orbital computing infrastructure.
Yet questions remain over whether investors are paying too much for future promise. Analysts at Oppenheimer have suggested the shares could reach $190, up from the IPO price of $135.
Morningstar, however, has suggested the shares are worth closer to $63, less than half the proposed IPO price.
Greater scrutiny is likely to arrive with the company's first public earnings report in late July or early August.
