Key Points
SpaceX is projected to raise $750 billion in its initial public offering, poised to set a record for the largest listing in history, attracting massive investor subscription. The public debut of this aerospace company led by Elon Musk is expected to dominate market attention, making it difficult for other new listings to gain investor favor. Europe's new share market is already experiencing a downturn, now facing multiple pressures including an unclear macroeconomic outlook, rising interest rates, and weak performance of new listings.
Market insiders indicate that SpaceX's upcoming listing path is set to break historical fundraising records, but this super-sized listing event may divert market capital and compress investment demand for other new shares. Samuel Kerr, Global Head of Equity Capital Markets at Merger Market Information Company, stated that SpaceX's long-planned listing, expected to launch on June 12, coincides with the sluggish development of Europe's new share market, forming a stark contrast with the soaring U.S. new share market. Kerr pointed out directly that SpaceX's planned fundraising of $750 billion, with an overall valuation of $1.75 trillion, is an unprecedented scale, far exceeding the size of several recently listed companies. This includes the heavyweight listing completed last week by artificial intelligence chip company Sribos Systems, which saw its market value rise to approximately $950 billion. On Tuesday, Kerr admitted in an interview with the U.S. Consumer News and Business Channel's "European Morning Finance" segment: "This listing could even have a negative impact on the global new share market as a whole." He explained that before the pricing of a conventional new share issuance, subscription demand typically reaches five times the fundraising amount. Based on this calculation, the market subscription demand for SpaceX's listing is highly likely to far exceed $750 billion. Kerr further elaborated: "It will completely capture all investment attention and capital in the market; all investors' focus will be centered on SpaceX." Given that this listing will absorb huge amounts of capital from the global equity capital market, and many investors will allocate substantial funds to this listing transaction, other companies are essentially choosing not to go public during the same period. It is reported that this company led by Elon Musk is expected to formally submit its listing prospectus in the coming days.
Multiple Negative Factors Overlap
In addition to SpaceX's heavyweight listing, several other giant companies, such as the Artificial Intelligence Open Lab, are also planning large-scale listings, continuously squeezing market capital space and worsening the already difficult situation for Europe's new share market. Currently, the European market is also mired in bond market volatility and rising expectations of interest rate hikes. Kerr believes that macroeconomic pressures, instability in Iran pushing up supply chain costs and energy prices, coupled with structural weaknesses in Europe's new share market itself—where most new listings performed weakly last year—and the intertwining of various unfavorable factors create multiple negative pressures suppressing market development. He added: "The global wave of interest rate hikes is already a major problem for the new share market, and rising bond prices are making the market situation increasingly difficult." "The industry originally did not expect a hot new share market in the first half of the year, and now most listing projects originally planned for the first half have been postponed to the second half."
Market Outlook
Salman Ahmed, Global Head of Macro and Strategic Asset Allocation at Fidelity International, warned that a concentrated listing of a large number of giant companies could temporarily drain market liquidity from the overall stock market. As companies like SpaceX, the Artificial Intelligence Open Lab, and Ansopik Technology successively prepare for listings, the ensuing super-large fundraising will create significant supply shocks in the stock market, forcing investment institutions to adjust their portfolio structures. This is highly likely to lead to a situation where the stock market struggles to absorb the capital. This phenomenon is particularly evident in the U.S. stock market, where the current uptrend heavily relies on a few leading large-cap stocks. Ahmed stated: "These giant listing projects need to absorb huge amounts of capital from the financial markets, which also means that currently popular leading stocks face the risk of correction. Market capital is highly likely to withdraw from these popular targets and flow into the track of large new share investments."
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