GoKawiilSpaceX founder Elon Musk addresses members of the media during a press conference announcing new developments of the Crew Dragon reusable spacecraft, at SpaceX headquarters in Hawthorne, California on October 10, 2019.
Nothing about SpaceX 's IPO is ordinary. The rocket maker is aiming to raise a record sum, by a wide margin, at a historic valuation, and will be controlled by Elon Musk, who's also CEO of Tesla , another trillion-dollar company.
When it comes to the mechanics of the share sale, SpaceX is offering a take-it-or-leave-it price of $135, rather than providing a range and then pricing the deal based on demand, as is customary in IPOs.
But as the stock offering gets underway on Thursday, certain customs will be familiar to Wall Street. At some point, all of the IPO shares — roughly $75 billion worth — have to get allocated to the underwriters and asset managers so they can reach their clients before trading begins on Friday.
"Elon has dictated the price, and, assuming investors go for it, you can check that box," said Lise Buyer, founder of IPO consultancy Class V Group. "But somebody still has to determine where the shares are going."
In a typical offering, the pricing takes place the evening before the market debut. In the weeks leading up to that point, the issuer, in tandem with the underwriters, provides a price range and then lifts it if investors are showing signs of enthusiasm.
For example, when artificial intelligence chipmaker Cerebras was gearing up for its IPO last month, the company first said it would sell shares at between $115 and $125 a piece. The next week, it upped the range to between $150 and $160.