By Manya Saini and Lucy Raitano May 21 SpaceX’s record-shattering IPO has given Wall Street the kind of spectacle it has craved since the pandemic-era listings boom, but the once-in-a-generation market event may offer little insight into whether the broader IPO market is truly…
ck. The IPO is expected to capture the imagination of retail investors with a rare mix of sci-fi ambition and Silicon Valley hype, marrying promises of Mars exploration with bets on AI infrastructure and data centers in space
But investors should not look at it as a bellwether for the broader IPO market because the company has little in common with a typical IPO candidate, more than half a dozen analysts and industry experts told Reuters. “SpaceX is so large and extraordinarily valued that it doesn’t lend itself as a normal test case for the IPO market,” said Lukas Muehlbauer, IPOX research associate. “The IPO market has reopened, but the appetite is still concentrated in companies that match strong thematics such as industrials, AI infrastructure, defense, energy and parts of biotech.” A SpaceX listing expected to raise more than $75 billion at a valuation of roughly $1.75 trillion would dwarf every IPO on record and propel total U.S. IPO proceeds to their highest level since 2021, according to a Reuters analysis of Dealogic data. FIRMS LOOK TO AVOID COLLISION WITH SPACEX A deal of this scale could drain liquidity and investor demand from the market, pushing other IPO hopefuls to the sidelines, industry experts and analysts told Reuters in April.
IPO bankers expect investors to be heavily tied up with the SpaceX IPO given its sheer size and the pressure on many funds to participate in the landmark deal, one European equity capital markets banker said. While smaller European deals may go ahead largely unaffected, larger IPOs are expected to face disruption because of their reliance on major U.S. investors, a second banker said. “The wider narrative has been that some companies…