According to a Reuters report, two people familiar with the SpaceX (SPCX) initial public offering said that the company received orders more than double the shares available.
SpaceX seeks to raise $75 billion, but orders are at $150 billion. That suggests that the stock will trade sharply higher than its $135 opening price. The firm is worth $1.8 trillion, based on around 555.6 million shares offered.
The chances are high that the SPCX IPO will have greater success than either Anthropic or OpenAI. Investors might want the space/satellite business alongside the xAI unit. The latter includes money-losing X, formerly called Twitter.
Heightened Retail Risks
Retail investors might get greedy on the IPO, expecting an easy gain on the first day. Unfortunately, private investors will come out well ahead. After years of waiting to cash out, they may sell the stock after the lock-up expires. Quick traders will not face the same risks. As supply for SPCX stock increases in the next six months, the stock price might fall by a double-digit percentage.
Your Takeaway
A shortage of SPCX stock will fuel the steep spike on the first day. As the trading frenzy fades and insiders sell, expect shares to trade lower in the coming months. Investors should also watch out for volatility in shares of AST SpaceMobile (ASTS), Viasat (VSAT), and Rocket Lab (RKLB).
