SpaceX IPO ignites retail investor frenzy! Some even want to take out loans to buy shares, fans: The more you buy, the better

SpaceX will go public on June 12th with a valuation of $1.8 trillion, setting the record for the largest IPO in history. Musk deliberately reserved 30% of shares for retail investors, igniting a frenzy of subscriptions, but experts warn that the sky-high valuation and unfulfilled visions carry significant risks.

SpaceX will officially list on June 12th, aiming to raise approximately $75 billion at a valuation of $1.8 trillion, potentially breaking the record for the largest IPO ever. Musk intentionally reserved 30% of shares for retail investors, which has driven subscription demand to more than four times the supply, with global followers eager to participate, even taking out loans to buy shares. However, the lofty valuation and several unimplemented visions have also raised concerns among market analysts.

Musk's halo reappears, fans scramble: taking out loans to invest is no problem

Bloomberg reports that Anna Watts, a 33-year-old PR manager from New York, has already saved $6,500 as a backup for this IPO, and has even tried to borrow $5,000 from friends and apply for bank loans. Even though both were rejected, she still says: "The more I buy, the better. Investing in the most ambitious company in history—there's no such thing as 'buying too much.'"

Watts's confidence stems from her past investment experience with Tesla, which she bought two years after its 2010 IPO, witnessing firsthand how Musk became the world's richest person through electric vehicles. Now, she sees SpaceX as Musk's even grander next step: a company integrating artificial intelligence, satellite communications, and even the dream of colonizing Mars.

30% of shares reserved for retail investors, subscription enthusiasm breaks records

Unlike typical IPOs that prioritize large blocks of shares for hedge funds and institutional investors, Musk’s decision to reserve 30% of shares for retail investors is three times the industry norm. This decision precisely ignited retail enthusiasm, with major brokerages continuously receiving SpaceX subscription orders, demand exceeding supply by more than four times.

Bryan Mitchell, a 48-year-old marketing director planning to invest thousands of dollars, said: "It feels like an appetizer—you have to believe in Musk. Even if there's a premium, I’m willing to pay it, just to say I was part of this historic moment."

What risks does SpaceX’s $1.8 trillion valuation hide?

Despite the enthusiasm for investment, there are still doubts about SpaceX’s financial fundamentals. SpaceX’s annual revenue is about $19 billion, comparable to mediocre retail companies like Dollar Tree, yet its valuation reaches $1.8 trillion, heavily reliant on long-term visions like space data centers and Mars colonization that have yet to be realized. Its AI division, xAI, burns over $1 billion per month.

Investment advisory firm SLC Management’s Managing Director Dec Mullarkey bluntly states: "Almost all potential investors I’ve spoken to say their main reason for investing is Musk’s 'golden touch,' but the returns might still be a long way off." The recent rocket explosion incident involving Bezos’s Blue Origin also serves as a reminder that the high risks inherent in the space industry should not be underestimated.

Additionally, Musk’s track record at Tesla is also fraught with uncertainties: disappointing robot taxi launches, lower-than-expected autonomous driving adoption, and the Optimus robot assistant still far from mass production. Currently, Tesla’s stock has a P/E ratio of 180, making it one of the highest-valued stocks in the S&P 500.

• **Related report: SpaceX IPO debuts tonight! Valued at 4,400 people overnight become millionaires—should you buy?

Cross-generational investment: Can Musk’s followers sustain SpaceX’s long-term stock price?

Even with significant risks, many retail investors’ beliefs focus more on the next decade than short-term gains. 26-year-old Austin tech worker Danny Araujo Mota has held Tesla stock since 2020 and has prepared $25,000 for SpaceX, saying even if the subscription doesn’t go through immediately or misses the first-day surge, it’s okay: "Sometimes you come across stocks where the founder’s conviction is so strong that you have to support it." he said.

Sean McConnell, a commercial real estate professional living in Orlando, Florida, who can see SpaceX rockets launch from his doorstep, plans to invest tens of thousands of dollars and intends to hold long-term for himself and his two teenage sons. "This is a cross-generational enterprise. I plan to hold it for many, many years."

Craig Stephens, founder of the IPO research program Access IPOs, points out that this group of long-term retail investors has created an “extraordinary demand,” which could make SpaceX’s listing performance different from other fleeting popular stocks.

• This article is reprinted with permission from: Chain News
• Original title: SpaceX’s Largest IPO Sparks Retail Frenzy, Musk Fans Pour In: The More You Buy, The Better
• Original author: Crumax