Space X IPO

Managers slam Space X: "Several overvalued"

Several Nordic managers have slammed SpaceX ahead of its IPO on Friday, Bloomberg reports.

The Danish pension fund Akademiker Pension describes the space company as "several overvalued" while Norwegian Storebrand Asset Management believes the corporate governance structure "raises several concerns".

The company's CEO Elon Musk is expected to retain control of 80 percent of the votes, which critics describe as an unprecedented concentration of power.

- I understand that we are in an era where founders want more control. But what Musk is planning for SpaceX goes far beyond what we have seen before, says Mark Levine, head of New York's pension funds, to the news agency.

SpaceX is aiming for a valuation of around $1.8 trillion, making the listing one of the largest ever.

Big risk for private investors: “Avoid like the plague”

When Elon Musk’s space company Space X goes public on Friday, 20 percent of the shares are expected to be reserved for private investors, compared to the usual 5–7 percent.

The Wall Street Journal notes that small investors will thus play a crucial – but risky – role in how the stock performs. Hyped IPOs usually do well at first, but history shows that optimism does not always last.

Examples include Meta and Uber, which had plunged 31 and 21 percent respectively a year after their IPO. Something that suggests that SpaceX will meet the same fate is that the company has already made the “easy money” as a private company.

One of those who is skeptical about investing in SpaceX is fund analyst Dave Nadig.

“I think most small investors should avoid trading this stock like the plague,” he tells WSJ.

Space X stock market trip
Analysis: The hype is reminiscent of Telia – hover over the sell button

The interest in Space X's listing on Friday is enormous. But it is no ordinary stock market newcomer, writes DI's Ulf Petersson.

The valuation is largely based on Elon Musk's visions of AI and space. The parallels to Telia's hyped IPO at the turn of the millennium, which then attracted the most owners on the Stockholm Stock Exchange, are close at hand, writes Petersson.

For those who want to be part of it, it may be time to subscribe or buy the share on the first trading day – but with a clear plan to sell right from the start.

"Should the share, like Telia, start to fall shortly after the listing, it is important to have determined the size of the loss in advance," he writes.

The Guardian's Arwa Mahdawi instead points out that through the listing, Musk looks set to become the first person in the world to reach a private fortune of over $1 trillion. Something that could give him disproportionately large political influence.

As the world's richest person, Musk already has the power to "say and do whatever he wants," regardless of how much unintended harm he causes, argues Mahdawi.

"Becoming the world's first trillionaire will only reinforce this sense of impunity and bring us one step closer to a full-blown oligarchy," she writes.