SpaceX IPO Set to Mint 4,400 Employee Millionaires

Trevor Hise came into the world to be a scientist and engineer working for SpaceX, but his parents had hoped that he would have a more stable, more traditional career. Rather he chose a new rocket company which was, at the time, no household name. That bet seems to be proving to be a lucrative one over 10 years, as SpaceX is ready to go public on June 12, in what is said to be the largest IPO in history.

A Record-Breaking Listing

The IPO is expected to generate $75 billion, with 555.6 million shares priced at $135 each, making the valuation of the company about $1.75 trillion. The offering is reportedly oversubscribed by almost 3.5 to 4 times as demand has reached $250 billion. SpaceX will make its debut on the Nasdaq under the symbol SPCX.

The event became a turning point in the workforce for company founder Tom Mueller, who was the first person to join the company. Elon Musk, he said, "always talked about the importance of equity over pay for long-term employees" and that is happening now.

The lives of thousands of New Millionaires will be turned upside down

Over 4,400 employees, present and former, of SpaceX are projected to see their net worth multiply by a million once the listing is complete. Of these, about 400 of them could have stakes of $100 million or more. The study, done by the San Francisco investment platform Hill.com, was reported for the first time by The New York Times.

Most of all, this wealth is not limited to the top executives. In fact, reported the NYT, some of these employees slated for life-changing payouts are hourly, blue-collar workers who were employed at the launch sites. Jessica Karl of Bloomberg got the joke: “SpaceX cafeteria has a ton of new millionaires going around.”

The View From the Top

Senior leadership will also benefit hugely. The Financial Times reports that both Chief Operating Officer Gwynne Shotwell and Chief Financial Officer Bret Johnsen have stakes valued at over $1 billion.

Board member Antonio Gracias, founder of Valor Equity Partners, holds stock that could be worth about $65 billion, and fellow director Luke Nosek's stake is worth about $5 billion.

The listing may be a big step for Musk as well. His net worth is now $788.8 billion where they are speculating that he may become the first trillionaire in the world.

A Word of Caution

Not all analysts believe the valuation is warranted. Morningstar has priced SpaceX at more than 50 percent lower than the IPO price, at $63 a share.

In two of the three scenarios, the equity analyst Nicolas Owens gave SpaceX the benefit of the doubt, assuming the company can make the Starship rocket rapidly reusable, and commercialise space-based data centres long term, but that would not happen until at least 2028.

Why It Matters

Musk has been a critic of public markets plenty, but the fact that SpaceX's more than 14,000 employees were paid with equity and that they were banned from trading shares internally had been putting pressure on Musk to provide more widespread liquidity, said Minmo Gahng, a finance professor at Cornell.

The IPO, in the sense, addresses a long term balance between private control and employee reward, cornell.

The listing is more than just a market move for people such as Trevor Hise; it is the culmination of several years of placing their money on a company that was not seriously considered by many in the beginning.

If the high valuation is correct or not is a significant issue for one of the world's most closely followed companies, on June 12.