You Probably Won’t Get Rich From the SpaceX IPO

That one thing seems certain about SpaceX IPO then it will make many people very rich. Another is that you might not be one of them. At least anytime soon.

There is a wonderful interest It’s Elon Musk the rocket-and-AI company’s debut, and for good reason. Images of SpaceX he was already leading aerospace company on earth, its rockets move astronauts to International Space Station and its Starlink satellites that provide Internet access to millions of people around the world. Its latest find xAI That means it’s also the first of three major US AI startups to go public, too Anthropic and OpenAI following closely behind. The company raised $75 billion, putting it at $1.75 trillion, which would make it the largest IPO ever.

As with all IPOs, most of the wealth will be reserved for those who already own SpaceX shares, which means employees, senior management, and Elon Musk. While so-called investors—people who don’t technically buy things—will have more access to SpaceX shares than they do with an IPO, most people won’t be able to see the big profits.

To be clear, this is not financial advice, or a prediction of SpaceX’s long-term health or share price. It’s a simple mechanic.

“The system is unfair,” says Campbell Harvey, a professor of economics at Duke University’s Fuqua School of Business. Here’s how it works and who works for it.

The Inside Track

In general, most investors would not be able to enter the IPO at all. These offerings are like exclusive clubs, with guest lists made up of institutional investors such as mutual funds and fund managers.

The SpaceX IPO is different, however, in several important ways. SpaceX has indicated that it wants to set aside 30 percent of its “float” (the number of shares that are sold to the public) for the Average Joe, which works out to about $22.5 billion. (Usually the company sets aside very little for the investors in the IPO; Integrity keep it at 5 to 10 percent.)

Depending on your broker, you may also need a minimum investment to participate. Take Fidelity, one of the world’s largest asset managers. For a typical IPO, Fidelity requires you to have $100,000 (or sometimes $500,000) in equity to participate; for SpaceX, it has been reduced to two large.

So yes, it’s easy to get on the guest list at the club. But inside there are only a lot of tables. Remember that $75 billion valuation SpaceX raised? Bloomberg reported on Thursday that SpaceX received $100 billion in funding from prospective investors. And that’s not even getting to the property managers who are trying to interfere; Only BlackRock he says he placed an order for $5 billion.

SpaceX’s bankers will ultimately decide who will get the right to buy stock at the IPO price of $135 a share, and how much. The odds of you breaking the velvet rope – even if you’re loose – are very low. And even if you do, the number of shares you will receive will be limited. Tell your rental company you need 10, and you might be lucky to get one or two. That’s not exactly setting you up for generational wealth.

Harvey said: “The person who invests the most money gets the rest. He says that even the 30 percent figure is misleading, because SpaceX is only selling 4 percent of the shares available, which means that the investors will end up owning 1 percent of the company after the IPO. “It’s a few crumbs.”