SpaceX's Record IPO Euphoria Meets Index Inclusion Reality

Wall Street has rarely displayed such unbridled enthusiasm. Ahead of SpaceX’s initial public offering on 12 June, the headquarters of Goldman Sachs and Morgan Stanley were decked out with murals of Starship rockets and Martian landscapes, while JPMorgan hosted 3,500 top clients for a virtual fireside chat in which chief executive Jamie Dimon hailed Elon Musk as 'the Edison of our time' [A2][A9]. The roadshow, which also featured events at Bank of America, has drawn what Russian sources describe as 'unquenchable' demand, with analysts reportedly fielding up to twenty calls a day from prospective investors [A7][A8]. By pricing 555.6 million shares at $135 each, the company aims to raise $75 billion, catapulting its valuation to roughly $1.75 trillion—making it the largest public offering in history and potentially turning Musk into the world’s first trillionaire [A1][A4].

Yet that euphoria has been tempered by a sober regulatory rebuke. S&P Global, operator of the benchmark S&P 500 index, has rejected proposals to fast-track the admission of mega-cap companies such as SpaceX, insisting that its rules on a minimum one-year listing history and proven profitability must be applied without exception [A3][A10]. The decision dashes hopes that the rocket maker would swiftly enter the main US equity index, thereby forcing the vast universe of passive tracker funds to buy its shares. Chinese financial observers had noted that both S&P and Nasdaq were considering adjustments to their inclusion criteria to accommodate a wave of blockbuster AI and space IPOs, including those of Anthropic and OpenAI, but S&P's stance underscores the hurdles that unprofitable firms face [A5]. Any eventual inclusion would likely trigger a massive, perhaps disruptive, rebalancing by index funds, given the stock’s outsized market capitalisation.

For ordinary investors from Frankfurt to Dubai, the message is mixed. A German broker has begun offering retail clients a chance to acquire SpaceX shares before the first day of trading—an unusual opening in a process normally dominated by institutional giants [A1]. Gulf-based investors, meanwhile, are being told they can buy shares, though obtaining them at the initial offer price may be difficult, with most allocations reserved for professional money managers [A4]. The scramble underscores the global appetite for a stake in Musk’s sprawling space enterprise, whose allure extends far beyond its core rocket business. Swiss analysts point to a suite of technologies—from the Starlink satellite-internet constellation and plans for orbital data centres to the development of a fully reusable Starship capable of reaching Mars—that justify the astronomical valuation [A6]. Musk himself used the investor meetings to pitch precisely these science-fiction ambitions, arguing the capital raised was essential to harness the future [A9].

As trading looms, attention will inevitably turn to whether the market can absorb a debut of this magnitude without violent swings. The lesson from the Aramco IPO of 2019, which raised a then-record $29 billion, is that initial frenzy can give way to more pedestrian performance. Yet the breadth of global demand—from European retail punters to Asian institutional funds—suggests SpaceX’s float could become a bellwether for the new era of mega-cap tech listings. The unanswered question is whether the index providers’ caution will eventually bend under the sheer gravitational pull of a $1.75 trillion company that dominates the commercial space race.