SpaceX lifted off on its first day as a public company, immediately jumping to $150 a share after it began trading on the Nasdaq, around 11% higher than the $135 figure at which it officially priced its IPO on Thursday.
The stock price reached as high as $176 in midday trading, pushing the company’s market capitalization to nearly $2.3 trillion, before ultimately settling 19% higher at $160.95 as markets closed.
The stock pop isn’t a surprise. The company’s IPO was oversubscribed by 4x, according to Bloomberg, meaning many institutional investors didn’t receive allocations and are likely buying shares on the open market.
The demand for SpaceX is also a function of its small float, with only about 4% of shares available for public trading, while early investors and employees hold the rest. SpaceX also successfully lobbied a number of indexes (like the Nasdaq 100) to change their inclusion rules. The company will now join those indexes in a matter of days, not months, increasing demand for SpaceX stock before other large institutions and funds start automatically buying it.
Robinhood said it has seen “record-breaking” traffic on its trading platform Friday in the hours after SpaceX’s historic public markets debut.
The debut is also one of the largest windfalls in the history of venture capital. The returns to Founders Fund, which invested $600 million in the company and owns a 3% stake, are estimated at more than $50 billion at the IPO price of $135, according to Bloomberg. Meanwhile, Andreessen Horowitz’s stake is worth more than $10 billion, and Sequoia’s is valued at over $20 billion.
Debuting at $150 made founder Elon Musk the world’s first trillionaire. The New York Times has reported that around 4,400 current and former SpaceX employees will become millionaires, while around 400 will become centimillionaires.
The original version of this article was published at 11 a.m. ET. The article has been updated with a new share price and other information.
Source: TechCrunch
