The SpaceX IPO will be the most hyped stock market debut in history, argues Rathbone Multi-Asset Portfolios Fund Manager David Coombs. He explains how his team already own many of the space economy suppliers.
Last week, Tracey and I were watching one of those glossy streaming documentaries about Elon Musk’s space plans that came out a few years ago. At some point, I noted that he now wanted to put data centres in orbit. “That sounds expensive,” she said, not looking up from her phone. She’s not wrong. And in three words, she’d essentially summarised our investment thesis on SpaceX’s upcoming IPO.
SpaceX filed its prospectus on 20 May, targeting a Nasdaq debut around 12 June under the ticker SPCX. Nasdaq has heavily changed its indexing methodology to accelerate SpaceX’s addition to its index, boosting the amount of shares in stock indices, and slashing the time before index funds are forced to buy and insiders are allowed to sell.
The numbers are eye-watering: a valuation of $1.75 trillion, a target raise of up to $75 billion, and a price-to-sales ratio of roughly 113 times. To put that in context, Tesla – hardly a bargain-basement stock – trades at about 16 times last year’s sales. Even Nvidia, the poster child of the AI boom, sits at 25-30 times.
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