SpaceX makes $1.77tn stock market debut with Elon Musk likely to become world’s first trillionaire today – business live | Business

Anti-poverty charity Oxfam warned earlier this week that Elon Musk’s imminent ‘government-backed trillionaire’ status marks “a dark day for democracy.”

They pointed out that Musk would be richer than the poorest 46% of the world population, or 3.8 billion people, combined.

Nabil Ahmed, senior director of economic justice at Oxfam America, said:

“A trillion dollars in the hands of one man is incompatible not only with an affordable economy, but also with a healthy democracy. Economic inequality begets political inequality, and ordinary people bear the brunt while billionaires continue to write the rules for their own benefit.”

SpaceX appears firmly on track for a $2tn valuation when its shares begin trading.

The ongoing auction process is now suggesting shares could start trading at $175, a big jump on the $135 which investors paid in this week’s initial public offering.

That would give SpaceX a stock market valuation of $2.287tn, I calculate, up from the $1.77tn valuation set in the IPO.

There’s plenty of razzmatazz outside the Nasdaq MarketSite today to mark SpaceX’s IPO, including large images of the company’s rockets:

SpaceX’s shares are indicated to open at $174, Reuters are reporting, based on the auction process taking place on the Nasdaq right now.

That would be 29% above the company’s IPO price, of $135.

It would push SpaceX’s valuation up from $1.77tn to $2.28tn.

It would also cement Elon Musk’s status as a trillionaire, as Forbes had pegged his wealth at $982.6bn based on the IPO price (Musk owns roughly 38% of SpaceX, plus shares and options in Tesla worth around $280bn).

It’s traditional for executives ringing the stock market opening bell to get terribly excited, and clap like a herd of performing seals, and SpaceX’s top brass did not disappoint:

The auction period before SpaceX’s shares start trading could take a few hours, agrees Matt Britzman, senior equity analyst at Hargreaves Lansdown:

“SpaceX has finally touched down on public markets, and the first few hours of trading once shares emerge from the auction period are likely to be noisy.

A company with this profile, this valuation and this level of investor attention is unlikely to drift quietly into the market. But early share price moves should not be mistaken for a clean verdict on the long-term investment case.

SpaceX are set to surge in its stock market debut today, predicts Kathleen Brooks, research director at XTB.

But she points out it may take some time before the shares actually trade:

SpaceX’s IPO has been an historic market event for its sheer size and the scale of demand for its shares. Ahead of its debut on the Nasdaq, the shares are higher by 30% in the pre-market, and could start trading at $175 per share, up from the $135 IPO price, based on prediction markets.

There is so much enthusiasm for SpaceX right now, that it is hard to see the shares slipping anytime soon. The numbers are huge: SpaceX sold $75bn of shares at its IPO, which valued the company at $1.75 trillion. If the stock pops 30% today, then SpaceX will be worth more than $2.4 trillion. SpaceX’s IPO alone is greater than the amount raised in 22 of the last 25 years, and the its IPO generated more money than all IPOs in the US so far this year.

The shares may not trade straight away when the market opens, usually an IPO with this level of enthusiasm trades a few hours after the opening bell, to ensure a smooth transition to the stock market; to do this bankers will typically want to match buyers and sellers for 10% of shares. This should be easy, as we expect SpaceX to be extremely liquid today. The risk is that there are not enough sellers, and if the stock price is volatile, then circuit breakers could kick in, which may halt trading later today.

With trading underway in New York, two of the three major US share indices are a little higher.

The blue-chip Dow Jones Industrial Average rose 300.0 points, or 0.59%, at the open to 51,148.73.

The broader S&P 500 index has gained 0.22%.

But, the Nasdaq Composite is down 0.1%, suggesting a slight softening in tech stocks.

But what we really want to see is a trade in SpaceX’s shares…..

The livefeed from the Nasdaq Marketplace is now playing Elton John’s Rocket Man…

And we’re off! SpaceX executives at the Nasdaq stock exchange have rung the opening bell, and the world’s biggest ever stock market flotation is underway.

There’s much celebrating at the Nasdaq, and also at SpaceX’s HQ where Elon Musk and his staff are also clapping excitedly.

A reminder, SpaceX is floating on the market at a valuation of $1.77tn after raising a record-breaking $75bn from investors through its IPO share sale.

The IPO price pushed up Musk’s wealth to $982.6bn, according to Forbes, so a small rise in the company’s share price today would make him the world’s first trillionaire.

Elon Musk is addressing the Nasdaq MarketSite by videolink from SpaceX’s headquarters now, where a large crowd have assembled, clapping and cheering.

Musk says it is “certainly hard to believe” that a little company that started in a warehouse is now going public with the largest IPO ever.

If people had told me this at the start, Musk jokes, he’d have replied “man, you must be smoking some really good crack”.

Musk then explains that SpaceX’s ambition is to “take the fiction out of science fiction”, and create an exciting, inspiring future for everyone.

People are gather outside at the Nasdaq MarketSite in New York City, ahead of SpaceX’s float….

The arrival of SpaceX on the stock market is likely to suck shareholder capital away from other businesses, argues Joel Shulman, CEO of ERShares, which manages an ETF with SpaceX exposure.

Shulman says:

“A dominant company with a $1.77 trillion valuation doesn’t just quietly enter the market. It’s going to cannibalise capital.”

Reminder: the SpaceX IPO was reportedly oversubscribed by three or four times, meaning there may be plenty of disappointed investors looking to buy shares once the company floats today.

Other companies in the space sector are on track for a mixed day’s trading, when the US stock market opens in under 20 minutes.

Rocket Lab are up 2% in pre-market trading.

But Virgin Galactic are down 10% pre-market, having jumped by over 20% yesterday.

Voyager Technologies, who gained 16% yesterday, are on track for a 4% drop.

SpaceX is set to slot into the top ten list of the most valuable listed companies.

If SpaceX shares hold at their offering price ($135), the company’s market value would be $1.77tn, making it equal to Broadcom, the sixth most valuable publicly-traded company, Associated Press point out.

Chipmaker Nvidia is curently the world’s most valuable public company at around $4.9tn.

The excitement is building outside the Nasdaq MarketSite in New York, where one man has turned up in an orange astronaut costume:

Should Elon Musk become the world’s first trillionaire today, it will refocus attention on economic inequality, and renew calls for more effective taxes on wealth.

Ed Pomfret of the Fight Inequality Alliance tells us:

“If you spent a million dollars every single day, it would take you two thousand seven hundred years to spend a trillion. The system that made Musk a trillionaire is the same system that underfunds your hospitals, loads countries across Africa, Asia and Latin America with unpayable debt, and then tells you redistribution is too complicated.

The obstacle to taxing extreme wealth is not the arithmetic. It is the politics, and the politics is owned by Musk and his billionaire buddies.”