SpaceX, the once fledgling aerospace company that Elon Musk predicted had a slim chance of survival, reached new heights on Friday with an historic initial public offering.

Shares of SpaceX, trading under the ticker SPCX, closed the day at $160.95, 19% above the offering price, transforming it into one of the world’s valuable companies with a $2.2 trillion market cap. The IPO also made the 54-year-old Musk the world’s first trillionaire.

The IPO capped a remarkable journey for a 24-year-old company that nearly shut down after a series of failed launches until its Falcon 1 rocket in 2008 orbited the earth and clinched a crucial NASA contract.

“It is certainly hard to believe that a little company that started in a warehouse in El Segundo is now going public with the largest IPO ever,” Musk told cheering employees at the company’s Texas headquarters.

The company raised $75 billion in the offering after selling 555 million shares at $135 to institutional and retail investors. With the shares in high demand, SpaceX could raise even more money.

It granted the nearly two dozen underwriters of the IPO, led by Goldman Sachs and Morgan Stanley, an additional 83 million shares, which could raise its total take to $86 billion.

The IPO is easily the largest on record, surpassing the 2019 offering by Saudi Aramco, Saudi Arabia’s state-owned oil giant, which raised $29.4 billion.

“They clearly priced it right, at least for one day. It should just make you optimistic for the markets for, especially for growth stocks,” said Robert Gruendyke, senior portfolio manager at Allspring Global Investments.

Musk has big plans for the company, which already dominates the world’s rocket launch business and is the leading satellite-based broadband provider with its Starlink service. It also has spent billions to buy spectrum for satellite-based mobile communications service.

Key to its efforts is Starship, a rocket being tested that is larger than the Saturn V that took astronauts to the moon. NASA is relying on it return Americans there, while Musk eventually wants to fly it to Mars.

Musk sees it as crucial to his AI ambitions. Musk merged his xAI artificial intelligence company into SpaceX this year, with the combined entity recently announcing it was leasing computer power to rivals Anthropic and Google at two terrestrial data centers it has constructed.

Musk contends the future of AI lies in launching thousands of satellite data centers into space, where they will perform computer calculations while orbiting the earth powered by a continuous supply of solar energy — a vision critics see as far fetched.

However, Musk has proved skeptics wrong in the past, especially those who bet against Tesla when it conducted its $1.7 billion IPO in 2010. At the time, CNBC personality Jim Cramer called the $17 shares a “sell, sell, sell.”

While it took until 2020 for the stock to really take off as Model 3 sales grew, shares of the electric vehicle maker closed Friday at $406.43, giving Tesla a market capitalization of $1.5 trillion.

The SpaceX IPO was a gold mine for Musk’s venture capital backers in Silicon Valley, including Peter Thiel’s Founders Fund, Andreessen Horowitz and Sequoia Capital, which reportedly had stakes now valued at $10 billion or more.

It also made an estimated 4,000 current and former SpaceX employees millionaires, with another 400 achieving a net worth exceeding $100 million, said Andrew Benson, chief executive of Hill.com, an investment platform for trading stock in pre-IPO tech companies.

SpaceX is currently headquartered in south Texas after moving there in 2024 from Hawthorne, where it had its executive offices for years after expanding from its original El Segundo warehouse.

However, the company retains large operations in the South Bay city, where it has more than 6,000 employees out of at least 22,000 company-wide. And it blasts off its Falcon 9 rocket regularly from Vandenberg Space Force Base in Santa Barbara County.

Benson said that he estimates the “vast majority” of current and former employees with more than $100 million in stock are in Southern California due to a stock awards plan that has favored length of tenure over an employee’s role.

“It’s just great to see employees be able to convert their labor into capital,” he said.

Even before Friday’s IPO, former employees of SpaceX have helped seed an aerospace and defense boom largely in Southern California, starting some 70 companies, including well known startups Relativity Space, Impulse Space and K2 Space, according to the alumnifounders.com tracking site.

Van Espahbodi, co-founder of Generational Partners, a Los Angeles venture capital fund, expects the IPO will result in even more employees taking a crack at their own firms.

“It will allow many of them to pursue their vision,” he said. “I am aware of extreme cases where people took on credit card debt to maximize preserving their shares and not having to sell off, so that they can go and do their thing.”

Demand for the IPO shares was feverish on Wall Street.

The offering was reported to be oversubscribed four times over by big institutional investors. Blackrock, the New York money manager that is the world’s largest, was seeking to buy as much as $5 billion of the stock, Bloomberg reported.

That was despite concerns by critics that the company was overvalued and skepticism of a governance structure that puts few constraints on Musk. He holds special shares with 10 times the voting power of common shares that put him in control of the company’s board.

Investment research firm Morningstar placed a$780 valuation on SpaceX, focusing on its core rocket and Starlink broadband satellite businesses. It suggested investors wait a few months for the stock to settle before buying in.

With AI leaders OpenAi and Anthropic next lined up to conduct initial public offerings, Jim Chanos, a veteran short seller, likened the era to the first dot.com boom, which ended with a tech bust — except more extreme.

“This is much bigger,” he said, in a Bloomberg News interview.

Whatever the hype or unease about the offering, SpaceX reached the IPO after an impressive record of achievements that transformed the space business.

After outgrowing its original El Segundo space and moving into a massive former Northrop facility in 2007, the next year it launched its first successful rocket and set about developing its now workhorse Falcon 9.

The rocket, first launched in 2010, is partially reusable and is estimated to have lowered launch costs by some 95% compared to traditional single-use rockets.

It’s estimated the Falcon 9 accounted for more than 80% of the mass sent up into space last year — giving rise to the new generation of aerospace companies that rely on it.

It also has been key to the company’s Starklink business, which sent up its first satellites in 2019. SpaceX even launched 29 Starlinks on Friday. There are now more than 10,000 in orbit with plans for thousands more as demand grows.

Paul Habibi, a real estate lecturer at UCLA and principal of Grayslake Advisors in El Segundo, said he believes the IPO should boost the South Bay real estate market, as insiders granted stocks spend some of their newfound wealth.

“A lot of those folks are probably going to line up around the block to buy into neighborhoods like Manhattan Beach,” he said.

Meanwhile, retail investors placed more than $100 billion in orders, far more than had been reserved for them in the IPO, Bloomberg said. It was expected individual investors would end up with a 20% share of the offering.

Many of those retail buyers are devoted Musk fans and are assumed to want to hold the stock, but others were expected to have flipped the stock Friday for a quick profit.

Angela Lee, a professor at Columbia Business School, thinks the individual investors who think they will strike it rich could be mistaken — though she doesn’t entirely discount the possibility.

“I think they think it’s a golden ticket, when it’s more likely they are holding a lottery ticket,” she said.

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