SpaceX’s record initial public offering (IPO) has grown even larger after the offering’s underwriters exercised their option to buy the maximum number of additional shares.
The move raised SpaceX’s total IPO proceeds to $85.7 billion, up from the $75 billion it had initially raised.
The original amount was already enough to make the offering the largest IPO in history.
The increase came after underwriters exercised the greenshoe option, a standard IPO mechanism that allows them to purchase additional shares when demand is strong.
SpaceX had initially sold 555.56 million shares at $135 each. After the IPO, underwriters bought another 83.3 million shares through the option, lifting the total amount raised to $85.7 billion.
SpaceX has said it plans to use the IPO proceeds for several purposes.
The company plans to repay around $20 billion in debt linked to legacy loans tied to X, formerly known as Twitter, and Musk’s AI company xAI.
Both X and xAI were combined into SpaceX before the IPO.
The company will also use the funds to expand its AI compute infrastructure, improve launch infrastructure, and strengthen Starlink.
SpaceX started trading on the Nasdaq exchange on Friday. The company ended its first trading day with a valuation of more than $2 trillion.
The strong debut also helped Elon Musk become the world’s first trillionaire.
SpaceX shares climbed again on Monday after the company confirmed the larger IPO proceeds. The gains helped SpaceX move past the valuation of chipmaker TSMC.
The strong market reaction shows continued investor interest in SpaceX’s rockets, Starlink internet business and AI plans.
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What did we learn kids ?
1. The investors aren’t even informed about the investment by fund managers and equity firms. So most don’t even know they bought these shares.
2. Musk doesn’t need to comply with any of his obligations or commitments as he can simply offload his shares for loans secured against his shares thus allowing him to avoid taxes. Thus investors hold his bag.
3. Anyone who’s buying these shares only gets 1 vote. While every shares musk owns gets him 10 votes. So he owns 95 percent and gets to overrule anyone and everyone.
4. As mentioned before, musk never intended to fulfill any of space x obligations to get his pay package. He just wants investors to finance his lifestyle and enjoy life while investors take the liabilities. He can secure any loan against his shares and basically get free money. While his shares can be sold or owned which are practically worthless.
5. Lastly space x entire revenue has been just 14 billion to 18 billion dollars since creation. It has failed everything. So the valuation doesn’t make any sense.
6. Space x is listed under ai and data center category . Not aero space category or any aircraft or space craft category at nasdaq.