Why Musk laughs at X traders’ ‘green shoes’

On the day of the debut of SpaceX on the Nasdaq, the largest IPO of history, some traders on the stock desks of Goldman Sachs e Morgan Stanley they showed up to work wearing green shoes. The reference was to “green shoe option“, one of the most important technical clauses of the operation. This was reported by the Wall Street Journal, according to which the idea came from Elon Musk. The founder of SpaceX reshared the photograph of the group on X, accompanying it amused with two emojis.

The “green shoe“, or option of overallocationgives placing banks the power to sell more shares to investors than the official offering size. In the case of SpaceX they have an option on about 83 million shares additions, which could take the overall collection beyond 86 billion dollars. The bank in charge of stabilization, in this operation Morgan Stanley, can use it to support the stock if the price falls in the first thirty days of trading.

Origin of the term

The term derives from Green Shoe Manufacturing Companyan American shoe factory that in the 1960s was among the first to include this clause in its listing documents. The company later merged into Stride Rite, but the name remained in the financial lexicon.

The numbers of the SpaceX IPO

SpaceX has set the placement price at $135 per sharefor a valuation of approximately 1,750 billion dollarsand placed 555.6 million shares collecting 75 billion. The stock, trading under the ticker SPCXopened to 150 dollars and during the day it exceeded the $170pushing the capitalization beyond i 2 trillion dollars and making Elon Musk the first trillionaire in history.