UK retail demand drives heavy oversubscription in SpaceX share sale

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UK retail demand for SpaceX

Highlights

UK retail investors are allocated $364 million of SpaceX shares at $135 each, with most applicants receiving about 38 per cent of requested shares.
Platforms like Hargreaves Lansdown and AJ Bell report record-breaking retail demand for SpaceX's offering, driven by new FCA rules enabling wider participation.
SpaceX targets an $86 billion raise at a $1.78 trillion valuation, receiving global orders exceeding three times the offered amount, with 25 per cent reserved for retail investors.

Allocation details under new UK offer rules

As first reported by Financial Times, UK retail investors are allocated $364 million worth of SpaceX shares in the offering, equal to just under 2.7 million shares priced at $135 each. People familiar with the matter say applicants in the UK receive about 38 per cent of the shares they request, compared with 20 to 25 per cent for the broader global retail allocation.

Investors applying for up to $2,700 in shares receive their full allocation, rounded down to the nearest whole share, while larger applications are scaled back. No individual investor receives more than 1,000 shares, and Marex says 61 per cent of applicants receive their full allocation.

Marex Financial, which operates the UK public offer platform through its Winterflood brokerage, channels applications from platforms including Hargreaves Lansdown, AJ Bell, CMC Markets, eToro, Freetrade, IG, Interactive Brokers, Interactive Investor and Revolut. The sale is the first to be made available under fundraising rules introduced by the Financial Conduct Authority in January, allowing companies to sell shares to all types of investors without issuing an offer prospectus.

Platforms signal broader retail appetite

Simon Belsham, chief client officer at Hargreaves Lansdown, says the offer attracts significant attention and marks the strongest IPO demand seen by the platform since the privatisation of Royal Mail in 2013. He says UK retail investors secure a higher percentage allocation than investors in the U.S. and Europe despite exceptionally strong global demand.

Daniel Coatsworth, head of markets at AJ Bell, says demand for SpaceX is unlike anything the platform has seen before, with more than five times as many applications as any other IPO over the past 10 years. Chris Beauchamp, chief market analyst at IG, says the response underlines retail appetite for access to high-profile private companies, particularly in sectors associated with strong growth expectations.

Globally, people familiar with the situation say SpaceX seeks to raise as much as $86 billion at a valuation of $1.78 trillion and draws orders for more than three times the amount on offer. Elon Musk says he wants to reserve a quarter of the stock for individual investors, well above the 5 to 10 per cent retail allocation typically seen in large IPOs.

Separately, Leverage Shares lists an exchange traded product on the London Stock Exchange on Friday that is designed to return three times the daily change in SpaceX's share price. The dollar share class trades under the ticker ELON and the sterling version under MUSK, although the leveraged product only holds cash today and does not gain exposure to SpaceX until Monday.

In our earlier coverage of SpaceX’s IPO debut, we explained that the company was set to raise $75 billion by selling 555.6 million shares at $135, implying a valuation of about $1.77 trillion and putting mega tech listing demand in focus. We also noted that broader risk sentiment was improving at the same time, helped by optimism around a potential U.S.-Iran agreement that could reopen the Strait of Hormuz and weigh on oil prices.

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