SINGAPORE – SpaceX’s hotly anticipated initial public offering (IPO), set to be the largest in history, has caught the attention of Singapore investors hoping to catch the AI wave and own a piece of one of the world’s most closely watched tech company.
Ahead of its June 12 Nasdaq debut, the tech giant’s IPO – valued at US$1.75 trillion (S$2.2 trillion) – is well oversubscribed, drawing in double the US$75 billion it is seeking to raise.
SpaceX, which develops space rockets and also owns AI firm xAI, will be the first artificial intelligence company to go public, ahead of Anthropic and OpenAI. It has reportedly earmarked about 30 per cent, or US$22.5 billion, for retail investors.
Here’s what Singapore investors should know about the Elon Musk-founded company ahead of its blockbuster listing.
Retail investors in Singapore would most likely have to wait until after SpaceX goes public on June 12 before they can buy its shares.
The company has picked a handful of brokerage firms in the US to distribute its shares to retail customers in the country, including Fidelity Investments, Robinhood Markets and SoFi.
But IPO participation is subject to eligibility requirements. While investors can still submit an indication of interest first before the June 10 deadline, there is no guarantee that their order would be fulfilled.
While Singapore has been named by SpaceX as one of the countries where qualified investors might be able to participate, retail brokerage firms in Singapore told The Straits Times that they are not participating in the IPO distribution process.
Retail investors will be able to buy SpaceX shares through their brokerage platforms once the company begins trading on Nasdaq under the ticker SPCX.
These include online brokerages such as Tiger Brokers, Moomoo, Phillip Securities and Syfe, as well as bank-backed trading platforms such as DBS Vickers.
A spokesperson at Syfe said that while retail investors in Singapore do not have access to US IPO allocations, all US-listed stocks are available on its platform from listing day, and users can place their orders in advance.
With the rocket maker’s IPO on the launchpad fuelling investor excitement, questions have also been raised over how the company will fare once it finally lifts off.
Analysts anticipate a volatile first-day of trading for SpaceX, given the level of hype surrounding the company and its IPO.
SpaceX’s opening price could be quickly driven up by market enthusiasm, which would reflect scarcity and hype instead of fundamental value, said Glenn Thum, research manager at Phillip Securities Research. As a result, investors could see a strong surge in its first day of trading that may not hold.
Some analysts have also noted that SpaceX may be significantly overvalued, and the high IPO price – reportedly at US$135 per share – could limit near-term gains.
However, others note that SpaceX’s allocation for retail investors, at around 555.6 million shares, constitutes just 4 per cent to 5 per cent of the company’s total outstanding equity.
This is a tight free float that only represents a small slice of the company, which would lead to demand vastly exceeding supply on the IPO’s opening day, said Thum.
That could potentially push the stock higher after listing despite concerns over its valuation.
Another key factor to consider is SpaceX’s dual-class share structure, which gives Musk outsized control over the company. Although he has a 42 per cent stake in SpaceX, special voting rights give him 85 per cent voting power in shareholder decisions.
This means that retail investors will have very little influence over corporate decisions at the company.
Whatever the case, as with any company’s shares, investors should focus on SpaceX’s fundamentals, including its business model, addressable market, and long-term competitive position, analysts said.
This would give them a better idea of the company’s growth potential and help them avoid getting caught up in the market excitement.
Investors considering such a high-profile listing should still consider their existing portfolio as their starting point, Syfe said.
“This would be a high-conviction allocation to an industry-defining business, but one that works best as a complement to a broad, diversified core, not a replacement for it.”
As markets assess SpaceX’s value, this could lead to sharp price movements in the early days of its trading.
Short-term price fluctuations can be significant, particularly when investor demand is exceptionally strong, said Canyon Quek, securities dealer at Longbridge Securities Singapore.
Investors should therefore be mindful of their entry price and potential near-term corrections once market sentiment settles.
They should also be aware that buying and selling the shares may be more expensive in the early days of trading, as the gap between buying and selling prices could be wider than usual, said James Ooi, market strategist at Tiger Brokers.
He added that investors should also consider the lock-up arrangement for pre-IPO investors.
A lock-up period prevents company insiders – such as founders, executives, early investors, and venture capitalists – from dumping heavily discounted shares onto the public market right after an IPO.
For SpaceX, the first lock-up release is expected shortly after its earnings report for the quarter ending June 30. Investors should therefore be aware of potential insider selling pressure and more share price volatility around that period, Ooi said.
Another key factor to consider is execution risk, said Longbridge’s Quek.
Since its founding in 2002, SpaceX has established itself as a leader in rocket launch services and satellite communications. But much of its future value creation will still depend on its ability to continue innovating, scaling its businesses, and executing on long-term strategic initiatives in a highly competitive and capital-intensive industry, he said.
Research firm Morningstar said SpaceX has a decent competitive advantage due to its rocket launch and satellite internet businesses, where years of investment in research and development, coupled with growing scale, have helped SpaceX lower costs and strengthen its position against rivals.
However, the firm was more cautious on xAI, saying it was too early to assess the potential of the AI business.
Investors may also want to monitor the market’s index inclusion rules, as potential inclusion into major indexes could sometimes act as a catalyst by attracting additional funds into the stock, said Ooi.
SpaceX is expected to be eligible for inclusion in the Nasdaq-100 – which tracks the 100 largest non-financial companies and heavily weighted towards the technology and high-growth sectors – after its 15th trading day, and in the Russell US Equity Indexes after its fifth trading day.
