Shareholders of Tesla and Musk's other projects may get preferential treatment at SpaceX's IPO

Elon Musk is preparing the IPO of SpaceX, during which the company could raise from $40 to $80 billion, which would make this debut on the stock exchange the largest in world history. Musk also plans to conduct this listing "unusually," sources familiar with the situation tell The Wall Street Journal (WSJ). Among the ideas the company is considering are the possibility of giving preferential treatment to shareholders of Musk's other projects and atypical rules for selling shares after the listing.

According to WSJ sources, Musk is developing an "unusual" strategy for the SpaceX IPO, which is generally consistent with the billionaire's practice of breaking the norms of the corporate world. Among the atypical ideas being considered by the company, WSJ sources said:

- The possibility of giving during the IPO "preferential treatment" to those who invested in other Musk companies. They may include shareholders of Tesla, as well as investors who helped the billionaire to buy Twitter in 2022, the newspaper writes. What exactly these preferences may be, the newspaper's interlocutors do not explain.

- In addition, a third or more of the SpaceX shares sold during the listing could go to individual investors. In a typical IPO, individuals usually only get about 10% of the shares offered, the WSJ emphasizes. A Reuters source says Musk plans to allocate up to 30% of SpaceX shares to retail investors in the IPO.

- Unusual timing of lock-up periods, limiting the sale of shares to early investors, is also being discussed - the WSJ's interlocutors do not provide details on this either.

- In addition - while most CEOs travel to the offices of potential investors in the run-up to an IPO to make presentations about their company - Musk wants investors to come to SpaceX themselves, the WSJ notes. There, they can visit production sites and possibly witness rocket launches. Musk and his team are betting that fund managers will leave eager to place huge buy orders on the stock. Specifically, before going public, the company is considering holding events for potential investors at SpaceX facilities, including a huge complex near Los Angeles airport and the launch pad at Cape Canaveral in Florida.

A company that builds and launches satellites and rockets is expected to file a confidential IPO filing with regulators in the coming days, the WSJ writes. Public release of the documents usually takes place a couple of months after the initial filing, depending on the number of questions from regulators, the newspaper explains.

According to its data, SpaceX is still discussing the amount of funds raised and the final estimate of the cost, which will be approved just before the start of the road show (presentation tour for investors). According to the newspaper's interlocutors familiar with the situation, the company expects to raise between $40 billion and $80 billion during the IPO. Such a result would eclipse the previous largest IPO in terms of funds raised by nearly $30 billion, set by Saudi oil producer Aramco in 2019.

SpaceX also hopes to gain a foothold in major stock indexes such as the Nasdaq 100 as soon as possible after its public offering. It's an unusual move that will ensure an influx of a huge number of new institutional buyers, the WSJ adds.

This article was AI-translated and verified by a human editor