SpaceX prepares the largest opening to small investors ever seen in a great stock market price. According to sources close to the operation reported by FT, Elon Musk wants to reserve up to a quarter of the 75 billion dollar placement to so-called “retail” investorsi.e. ordinary savers who buy shares via apps and online platforms, as opposed to institutional investors such as funds and banks who usually dominate this type of operation.
It is a choice, explains the newspaper, which reflects Musk’s philosophy, which has always been oriented towards giving direct access to the wider public rather than favoring Wall Street. No previous listing had ever combined a company of SpaceX’s profile with a figure of the magnitude of Musk, who promotes his companies to 240 million followers on X and whose Starship launches have made the group one of the most recognizable in the world.
In large listings, small investors typically receive between 5 and 10% of the shares offered. The target attributed to Musk is around 25%, while Reuters reported that the share could be as high as 30%.
The five platforms and the volatility warning
The final allocation, however, is not yet set and will depend on demand. Such a significant percentage pushed the company to indicate in the prospectus the five platforms responsible for distribution (SoFi, Robinhood, E*Trade, Schwab and Fidelity) and to add a risk warning: such a strong presence of individual investors can make trading more volatile.
The five platforms will collect savers’ orders and transmit demand data every day to the placement underwriters, including Bank of America, which manages the US retail portion. Absorbing $20 billion or more in equity should be manageable for the five digital platforms, which collectively hold more than $10 trillion in client assets.
Tesla’s precedent and the promise of 2020
Musk has been courting small investors for some time: in 2020 he promised to ensure they had “top priority” in a possible listing of SpaceX.
A courtship that has built him an unusually loyal following: small investors hold about 42% of Tesla’s free float, compared to Apple’s 34%, and have helped support the stock, which trades at 382 times earnings despite slowing growth.