Bank syndicates managing SpaceX's initial public offering report that orders exceed the available supply of shares, according to people familiar with the matter who spoke anonymously because the details remain private. Those same people say the banks intend to stop taking institutional orders on Wednesday at 4 p.m. in New York.
The scheduled halt of institutional subscriptions is part of the process through which underwriters close the order book, evaluate interest from investors and deliver pricing recommendations to the company. SpaceX is set to have its IPO priced on June 11, with trading expected to start the following day, June 12.
Under the terms disclosed, SpaceX plans to sell 555.6 million shares at a price of $135 per share. That issuance would raise approximately $75 billion and place the company's valuation at about $1.8 trillion. While institutional orders will be suspended at the stated Wednesday deadline, retail investors will still be able to submit orders on certain platforms after the institutional cutoff. The company has allocated up to 30% of the offering for retail participation.
The move to close the institutional book at a set time gives the banks a window to reconcile demand, finalize the pricing recommendation and determine allocations between institutional and retail investors. Questions about final price, exact institutional allocations and the mechanics of retail participation will be resolved through that process.
Observers should note the specific timing and structure of the offering: an institutional order book closure at 4 p.m. New York time on Wednesday; a pricing event scheduled for June 11; trading commencing on June 12; a fixed share count and price per share; and a designated retail set-aside of up to 30% of the deal. The parties providing these details asked not to be identified because the information is not yet public.
What this means
- SpaceX's IPO has drawn orders in excess of available shares, indicating strong demand into the book-build process.
- Underwriters will close the institutional order book Wednesday at 4 p.m. New York time to assess demand and advise on final pricing.
- Retail investors retain post-cutoff access to the offering on specified platforms, with up to 30% of the issuance reserved for them.