Good morning, investors. Leave it to Elon Musk to make bigger headlines than the president of the United States calling for an imminent peace deal for an ongoing Middle East conflict.
Today we’re unpacking the galactic, record-breaking IPO.
SPCX facts and figures
SpaceX begins trading this morning as the largest IPO in history.
The company hovers at a $1.77 trillion valuation and every share is priced at a flat $135.
Consider the round-up below your pre-flight checklist.
The deal
SPCX will trade on the Nasdaq, 555.6 million shares sold for roughly $75 billion
Only about 4% of the company will be in public hands
Goldman Sachs led the IPO, with support from Morgan Stanley, Bank of America, JPMorgan, and Citigroup
Making history
SpaceX surpasses Saudi Aramco’s $29.4 billion debut as the largest IPO ever
SpaceX is the most valuable company ever to go public
Ranks as the seventh-most valuable company in the US ahead of Tesla and Berkshire Hathaway
Total demand for SpaceX stock ran roughly four times the available shares
Chart courtesy of Exhibit A
Retail involvement
About 30% of the offering is reserved for retail investors, more than the usual 5% to 10%
Trading will be available through Robinhood, SoFi, Fidelity, Schwab and E*Trade
Retail orders came in above $70 billion, more than triple the retail allocation
Balance sheet
$18.7 billion in 2025 revenue, a $4.9 billion net loss, $6.6 billion adjusted EBITDA
Starlink produced $11.4 billion in revenue and a $4.4 billion operating profit, with subscribers up from 2.3 million in 2023 to 10.3 million
Launch flew 165 Falcon 9 missions last year and commands roughly 90% of global commercial launch by mass, but it lost $657 million
February's xAI merger folded in the Colossus data centers, which Google pays $920 million a month for compute
Finer details
Morningstar gives SpaceX a fair value at $63 a share, less than half the IPO price
The offer price equals roughly 95x trailing sales
Public buyers get Class A shares with one vote each, while Elon Musk owns Class B shares carrying 10 votes, giving him 85% voting power
Musk’s pay package only vests if SpaceX reaches $7.5 trillion and builds a colony on Mars
Starlink’s monthly revenue per user has dropped from $99 to $66
SpaceX as an idea is more than the sum of its parts.
The combination of its intangible and tangible attributes make it at once a compelling story and optimistic bet on the future as well as what appears to be a classic hype trap for retail investors.
There’s plenty of tension at play. Markets have been waiting months for SpaceX’s trading debut, though it will be only the first in the wave of at least three record-shattering IPOs with OpenAI and Anthropic around the corner.
As exciting as the trading day will be, it’s unfolding against a backdrop of continued uncertainty in Iran, still-elevated oil prices, hot inflation and rising odds for Fed rate hikes.
All that is to say that today promises to be the start of historically interesting times for investors.
Today’s letter is brought to you by Defiance ETFs
SpaceX hits the public market today in the biggest IPO in market history.
Defiance is right behind it with SPCU, the Defiance 2X Long SpaceX ETF, built to deliver 2X the daily performance of SpaceX stock.
One ticker, double the daily move, no options chain or margin account required.
SPCU is a leveraged ETF that resets daily, built for short-term tactical use, not buy and hold.
SPCU begins trading Monday.
Market snapshot
Elsewhere
🛢 Oil tumbled more than 3% after Trump called off Iran strikes. Brent slid to $89 and WTI fell to $86 after the president said talks with Tehran had reached the highest level of Iranian leadership. (CNBC)
📉 Jobless claims rose to a four-month high. Initial filings rose to 229,000 last week against a 220,000 consensus, the highest reading since February and the latest sign the labor market is softening. (Reuters)
📊 Producer price index rose 1.1% in May, more than expected. That put the 12-month wholesale inflation rate at 6.5%, the highest since November 2022. (CNBC)
Rapid-fire
SpaceX retail order book is oversubscribed above $100 billion (Bloomberg)
Adobe stock tumbled despite reporting record earnings (Barron’s)
Bank of America predicts the CPU market will grow 5x by 2030 (Yahoo Finance)
SpaceX’s IPO makes these 2 brokerage stocks suddenly look more attractive (ProCap Insights)
Virgin Galactic stock rallied 27% ahead of the SpaceX IPO (Yahoo Finance)
Liz Ann Sonders does not see an AI bubble forming just yet (Full Signal)
The Iran conflict is finally showing up in the stock market (Opening Bell Daily)
Interview
I sat down with Wall Street quant Kai Wu, founder of Sparkline Capital, to discuss why AI is breaking traditional value investing, how classic market metrics have become outdated, and picking stocks in the AI trade.
Tune in on Spotify, Apple Podcasts, or YouTube.
On this day
🗓 June 12, 2018: A federal judge approved AT&T's $85 billion acquisition of Time Warner, clearing the largest vertical media deal in US history.
Last thing
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