r/stocks
SpaceX IPO Info-hunting.
User highlights extreme valuation disparity in SpaceX IPO data, noting new investors pay $135/share vs $6.48 for insiders, signaling caution.
- New investors face a ~20x price premium compared to existing insiders, creating immediate downside risk and poor value proposition.
- Extreme dilution of economic interest for public shareholders, with only 4.2% of shares available at vastly inflated valuations.
- Market liquidity may tighten as capital rotates into overvalued mega-IPOs like SpaceX and Anthropic, draining resources from other sectors.
One thing I haven't seen a lot of talk on is Page 71, 'Dilutions' in the SpaceX Prospectus. When I first read that less than 5% of shares were open to the public ( joe shmoe trader), i was confused at why people were saying new investors would be left holding the bag.
That was until i saw the Average price per share of the old investers vs new.
|(in millions, rounded to two decimals)|Number (shares acquired)|Percent (shares acquired)|Amount (Total consideration)|Percent (Total conisderation)|Avg Price per Share|
|:-|:-|:-|:-|:-|:-|
|Elon Musk and other existing investors|12,520.31|95.8%|$81,137.52|52%|$6.48|
|New investors in this offering.|555.56|4.2%|$75,000.00|48%|$135|
|Total|13,075.87|100%|$156,137.52|100%|$11.94|
As someone fairly new to this, how normal is this share price discrepancy?
All signs are pointing to 'wait n see', especially with Anthropic IPO coming up in a few months. And honestly, there's only but so much money in the market that i feel this slight recede in the money tide is because people are gearing up for this stupidly high valued IPO's.
Thoughts on this?
If SpaceX follows most IPO dynamics, insiders might cash out from the company while retail investors get limited supply, driving up demand and prices. Classic setup we've seen before.
Yea because a 1.75 trillion valuation for less revenue than airpods is something very appealing
Normally, yes, but I think there are owners of SpaceX stock that'll be able to sell very soon after the IPO. A lot of rules don't seem to apply to this IPO.
I think that they have some stocks set aside for "employees and friends" who will be able to sell those stocks immediately. Ordinary employees have a lockup.
I'll buy in at $45 after the termoil
The company is insanely overvalued. I refuse to participate.
This was always allowed, yes.
Elon is trying to create huge demand with very little supply at the offering. This will drive the price up artificially to fleece the new retail investors and passive investors who are forced to buy early. Insiders and early investors will also sell at the highly inflated prices. Following this the price will do a DJT as the world realizes this is nothing more that a third rate AI company and you and I will be left holding the rather empty bag.
You're still gonna buy?!
I have no choice as I have a position in QQQ with a significant gain in a taxable account. If I sell now I will have to pay tax on that gain now. This would be a bigger problem than writing off the 3-4% of my QQQ holdings going into Elon’s pocket.
You could short Space X for 3-4% of total portfolio value. If it goes up you lose money on the short but gain on the QQQ. If it drops you lose on the QQQ but gain on the short. This would cancel the impact of SPACE X ipo on your QQQ position. The only cost will be to borrow the shares for 6-12 month
Not even an AI company — ‘a compute leasing company’ , judging by the Google deal.
Ie, they will not have a strong growth outlook if they’re just leasing depreciating assets at fixed prices.
The irony...
After the SPCX IPO Elon will own 42% of the total SpaceX equity. At a $1.77 trillion IPO valuation, that comes to $743.4 billion by itself.
if the valuations were much closer to what new investors were paying, there wouldn't be nearly that much incentive to sell-off as fast as possible once the other 48% of cash comes rolling in. Granted, there is a weird stagger-lock in approach they are taking with this stock while Elon and other major investors are locked in for a year, but that still doesnt quite ease the queasy investors mind.