European retail investors rush to buy into SpaceX’s record IPO

SpaceX IPO Stirs European Retail Investor Frenzy Ahead of Listing

European retail investors are racing to secure a stake in SpaceX’s record-breaking initial public offering, expected to debut on the Nasdaq on June 12, even as analysts warn that the deal’s lofty valuation poses outsized risks for individual buyers.

A Historic Allocation for Retail

SpaceX is contemplating earmarking up to 30% of its offering for retail investors — roughly $22.5 billion worth of shares — an unusually large allocation for an IPO of this scale. In the United Kingdom, eight online investment platforms including AJ Bell, CMC, eToro, Freetrade, Interactive Brokers, and interactive investor have begun inviting customers to apply for shares, with minimum investments set at $750 on eToro and £1,000 on Hargreaves Lansdown. Qualified investors in Germany, Denmark, France, the Netherlands, Norway, Spain, Sweden, and Switzerland will also be able to participate once the European prospectus is approved.reuters

The company is targeting a raise of $75 billion at a fixed price of $135 per share, which would value SpaceX at approximately $1.75 trillion, according to Reuters. If completed, it would be the largest IPO in stock market history.reuters

Wall Street Courts Individual Buyers

JPMorgan Chase CEO Jamie Dimon pitched the offering to thousands of the bank’s wealthy clients at events across 90 locations in 26 states, saying JPMorgan was looking to treat “individual investors the same way institutions are treated,” according to Reuters. Dimon also called Elon Musk the “Edison of our time” at the event. Musk himself appeared virtually at a lead pre-IPO investor event on June 4.fortune

Analysts Sound Alarm on Valuation

Despite the excitement, finance experts are urging caution. Morningstar analysts wrote in a note that SpaceX is “substantially overvalued” and that investors will likely have opportunities to acquire shares at more favorable prices after the listing. On a trailing basis, SpaceX trades at close to 100 times price-to-sales, according to Wall Street Prep analysis — far above the industry norm. Morningstar noted the $1.75 trillion valuation would put SpaceX at 67 times sales, more than three times Nvidia’s ratio.cnbc

Rupert Mitchell, author of Blind Squirrel Macro, called the 30% retail tranche “worrying,” noting it represents roughly $25 billion worth of stock placed into retail hands at a stretched valuation. Pricing is expected on June 11, with trading to begin June 12 under the ticker SPCX.zacks