The World’s First IPO Has a Warning for the World’s Biggest
SpaceX’s $75 billion debut is part of a speculation machine the Dutch built in 1602 — money the company never gives back, a founder no shareholder can touch. Here's how it ended.
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With a share price of $135 and a target of $75 billion at the start of trading Friday, SpaceX is now the largest public stock offering in the history of capitalism, and not by a little. SpaceX blows away the prior record-holder, Saudi Aramco, which raised $25.6 billion in 2019 and held the record for seven years. Alibaba, SoftBank, Visa, General Motors — the rest of the all-time list now sits a long way down the page.
The SpaceX numbers are mind-boggling. No wonder the Nasdaq bent its rules on stability and profitability and allowed an unproven behemoth like SPCX to join its ranks. And that, in turn, means that institutional funds — pension funds, index funds, your 401(k) — will automatically buy shares in the company if they’re tracking the Nasdaq-100.
But the numbers are especially disorienting when you consider what a share actually buys.
For one thing, it doesn’t buy any voice in what the company does. The New York Times profiled Justin Fishner-Wolfson, whose firm has spent fifteen years buying SpaceX shares and now holds more than 1 percent of it — about $20 billion at Friday’s price. He is among the most devoted investors in the company, having only ever bought, never sold. He’ll presumably be a multibillionaire as of today. But the Times also asked him whether he had ever given Musk tough feedback. His answer, which the reporter says followed a 19-second pause:
“You can say whatever you want to say, and then he’ll either change his mind or he won’t. It’s usually a short conversation.”
Twenty billion dollars of ownership buys nothing more than that. This is the essence of investing in Elon Musk, and in tech in general, and as we’ll see shortly, in the very first stock ever offered.
The terms are in the filing. Musk keeps more than 82 percent of the voting control after the offering, so every question is settled before a shareholder raises a hand. The $75 billion goes into the company and stays there; the only way to get your money back is to sell your share to someone else. And the company is losing billions of dollars a year, which means the value of what you bought rests almost entirely on what people believe it will be worth later.
Shares anyone can trade. Money the company keeps for good. Control held by one man. All of it wrapped around a business that several governments — including that of the United States — now depend on. This sort of arrangement has been sold to the public before. In fact, these were the conditions of the first stock offering in history. It ran for nearly two hundred years, and it ended badly.
