SpaceX took off smoothly on its first trading day as a publicly traded company. After the stock started trading on NASDAQ, it immediately jumped to $150 per share, about 11% higher than the IPO price of $135 officially priced last Thursday. The stock briefly rose to $176 in midday trading, driving the company’s market value to nearly $2.3 trillion, and ultimately closed up 19% at $160.95.
Stock prices soar
The rise in stock prices is not surprising. According to Bloomberg, the company’s IPO received four times oversubscription, which means many institutional investors failed to secure a placement and are likely buying stocks on the public market.
The market demand for SpaceX is also related to its relatively small number of circulating shares. Only about 4% of the shares are available for public trading, while early investors and employees hold the remaining shares. SpaceX has also successfully lobbied multiple indices, such as the Nasdaq 100, to change their inclusion rules. The company will join these indices within a few days (rather than months), which has increased demand for SpaceX stocks before other large institutions and funds begin automatic purchases.
Robinhood stated that in the hours following SpaceX’s historic public market debut, its trading platform had “set a record” for traffic on Friday.
The return on venture capital is astonishing
This listing is also one of the largest returns in the history of venture capital. According to Bloomberg, Founders Fund’s investment in the company is $600 million and holds a 3% stake, with an estimated return of over $50 billion based on an IPO price of $135. At the same time, Andreessen Horowitz’s shareholding value exceeds $10 billion, and Sequoia’s shareholding value exceeds $20 billion.
Listed at a price of $150, founder Elon Musk became the world’s first trillionaire. The New York Times reported that approximately 4400 current and former SpaceX employees will become millionaires, while around 400 will become billionaires (with a net worth of over $100 million).
