SpaceX soars 28% after record-busting IPO

(Corrects spelling of 'Instant' in headline)

NEW YORK, June 12 (Reuters) - SpaceX soared 28% in its Nasdaq debut on Friday, a ‌day after pricing its record $75 billion IPO. Thursday's pricing ​gave Elon Musk's space, communications ​and AI firm a $1.77 trillion valuation, the largest ever in an initial offering; trading after midday on Friday pushed that figure above $2.25 trillion.

MARKET REACTION:

SPACEX: Shares opened at $150 late on Friday morning, 11% above Thursday's pricing at $135, and were lately at $172.

INDEXES: U.S. stocks were modestly higher, with the Nasdaq up 0.2% and the Dow Jones Industrial Average up 0.7%.

COMMENTS:

MIKE DICKSON, HEAD OF RESEARCH, HORIZON INVESTMENTS, CHARLOTTE, NORTH CAROLINA:

"I'm a little surprised there's not more volatility with that, given a lot of the oversubscription headlines... all of these pretty well publicized structural short-term potential volatility ‌makers.

"The price where it sits is an interesting place to watch for the rest of the day. It hasn't popped enough so that you're going get hot hands wanting to sell just yet.

"It's not going up in huge blocks, but ⁠it's bleeding higher, and a lot of that is due to a little bit more of a boring and softer opening print than a lot of folks expected. That's going to entice people into the market and prevent folks from selling."

TODD SCHOENBERGER, CHIEF INVESTMENT OFFICER, CROSSCHECK MANAGEMENT, WASHINGTON, DC:

"(Sentiment) is overwhelmingly positive, the retail interest is off the charts right now and as a result, people are ‌buying into the stock.

"You have to look at it this way: are people actually ‌investing in SpaceX or trading SpaceX? I am of the belief, and this is also other money managers that I'm talking to, that it's the latter.

"People are looking to trade it. They're looking to take advantage of the premium that's built into the headlines.

"The question remains is what happens in a couple of weeks from now. Right now, people want to bid the stock higher because it's a winner at this point. Whether it stays that way, that remains to be seen.”

WALTER TODD, CHIEF INVESTMENT OFFICER, GREENWOOD CAPITAL, GREENWOOD, SOUTH CAROLINA:

"Percentagewise, it's maybe a little underwhelming until you do the math on the ​market cap impact of a 20%, 22% move -- $350, $400 billion in market cap. We'll see how it closes, but right now, it looks pretty successful.

"To me, the largest IPO in history, the valuation that is being assigned to it and then presumably you got Anthropic and OpenAI coming relatively quickly as well -- it's emblematic to me of excessive exuberance in the market."

EVAN SCHOLSSMAN, VENTURE CAPITALIST AT SURO CAPITAL, NEW YORK:

"What (the rise at open) shows is the robust demand that exists for sort of your marquee names driving innovation right now. It just goes to show the way I think we've seen in the private markets for some ⁠time now, which is there is really strong demand for these companies that are driving innovation. And they've been private for quite some time now."

ERIC KUBY, CHIEF INVESTMENT OFFICER, NORTH STAR INVESTMENT MANAGEMENT CORP, CHICAGO:

"This is what would be expected, with it being, whatever it was, 10 times oversubscribed ... that it was going to certainly open up with a lot of enthusiasm. I think it will be interesting to see how ​the rest of the day plays out and then next week, when maybe the excitement dies down a little bit.

"But the most talked about and biggest IPO ever in a very exciting area, very futuristic. So I think what we're seeing is what we would have expected. I think if it had opened worse than this, it would have been of concern."

SETH HICKLE, CHIEF INVESTMENT OFFICER, MINDSET WEALTH MANAGEMENT, INDIANAPOLIS:

“Overall, the IPO was a success. Whether it was a success ​for individual investors depends largely on how many shares they actually received.

“The first day of trading confirms what the IPO book already told us, demand for SpaceX far exceeded ‌supply. For many investors in Space X is the closest thing to investing in the railroads during the Industrial Revolution and they are willing to pay the Elon Musk premium for that opportunity."

JOE MAHER, MARKETS ECONOMIST AT CAPITAL ECONOMICS, LONDON:

"Blockbuster IPOs from SpaceX, Anthropic and OpenAI, together with share sales by some AI hyperscalers, look set to unleash a wave of equity supply that will prove a major test for the stock market.

"Gross equity issuance has tended to pick up markedly during stock market booms ⁠and the peak of these booms has coincided closely with the rare periods of positive net equity issuance in the US. Not only is surging share issuance a sign speculation is reaching fever pitch, but rising supply may also overwhelm investor demand and help to push stock prices lower."

BEN RITCHIE, HEAD OF DEVELOPED MARKET EQUITIES AT ABERDEEN INVESTMENTS, EDINBURGH, SCOTLAND:

"The important thing to note is the relative free float of the IPO is small. The IPO has been constructed to give it the best possible chance not only of achieving a high valuation, but also of trading well initially, a relatively tight float and also a healthy allocation to retail.

"This is a dynamic that's based on the pillars of confidence, and achieving a high valuation and ⁠a successful first day market response is important in driving that confidence. And because we're at the heavy investing stage of this build-out cycle, and it needs to attract capital. Having those positive share price responses, but also high valuations, are critical ultimately to being able to fund that."

DON CALCAGNI, CHIEF INVESTMENT OFFICER, MERCER ADVISORS, DENVER:

“First day IPOS are generally pretty ​volatile. … The first day's performance doesn't necessarily predict how the stock will perform in the medium-term. Volatility starts to come down as time goes on, but that volatility can easily persist for a full quarter.

“The volatility is always highest fresh out of the gate because you have all that pent up demand and investors just trying to figure it out. That’s why people get excited, they see this huge pop and want a piece of it. If they buy it today, they might not be getting that huge pop themselves, but they are funding the exponential returns of all the early investors.”

SCOTT CHRONERT, U.S. EQUITY STRATEGIST AT CITI, NOVATO, CALIFORNIA:

“The key from here is investor demand and the amount of available capital/portfolio ‌space for new opportunities.

“An important starting point is the lack of IPOs for much of this cycle. This has been a function of staying private longer given large pools of available private capital and low rates. Before that, there has been a general decline in available public companies, a trend established pre-pandemic. Lastly, consider years of de-equitization with buybacks/takeouts outstripping issuance.

“While those storylines set up well for equity demand, they must be balanced with headwinds. As mega IPOs come to market, ‌the de-equitization story will reverse as the cashflow funding narrative continues to weaken. Combined, this puts more pressure on fundamentals to deliver, especially for AI monetization, as it helps future funding, which filter into broader fundamentals."

SHIVARAM RAJGOPAL, PROFESSOR OF ACCOUNTING AND AUDITING AND CHAIR OF THE ACCOUNTING DIVISION, COLUMBIA BUSINESS SCHOOL. NEW YORK:

"2026 will go down as the year of the mega IPO. This might even ⁠suggest the peak of the bubble fueled by low interest rates since the financial crisis, private credit boom and the unreal ‌expectations from AI companies."

SENATOR ELIZABETH WARREN OF MASSACHUSETTS, THE RANKING DEMOCRAT ON THE SENATE BANKING ​COMMITTEE:

“Trump’s SEC greenlit an IPO with numbers analysts have called ‘nonsensical.’ The world will get its first trillionaire while Americans across the country are scraping together every dollar to save for retirement. Rather than changing the rules to rush SpaceX into Americans’ retirement portfolios, index providers should ensure they do their part to protect American families’ investments. And the SEC should do its job and ensure Elon Musk does not rip off investors.”

(Reporting by Shashwat Chauhan, Caroline Valetkevitch, Laura Matthews, Lewis Krauskopf, Twesha Dikshit, P. Avinash, Pete Schroeder, Suzanne McGee, ‌Saeed Azhar; editing by Colin Barr)

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