It seems that the initial public offering (IPO) of SpaceX (NASDAQ: SPCX) shares is quickly turning into one of the biggest spectacles the investing world has ever seen. I don’t know about you, but I can’t recall a time when the floating of an American company on the American stock markets prompted Australian brokers like CommSec to offer Australian investors the chance to participate.
And participate they seemingly are. Every time I have logged onto CommSec’s website in recent weeks, I have been greeted with “We’re experiencing extremely high call volumes”, followed by a prompt explaining to visitors how they can participate in the IPO.Â
To labour the point one more time, this is unprecedented.
SpaceX shares’ IPO to shake up the world of investing
It seems more than a few Australian investors are relishing the opportunity to buy SpaceX shares as soon as they can.
SpaceX, helmed by Elon Musk, is behind some of the world’s most advanced rocket technology. The company has several supplementary divisions, including its Starlink satellite internet services, artificial intelligence platform xAI, and the social media site X, formerly known as Twitter.
Musk already heads up electric battery and vehicle company Tesla Inc (NASDAQ: TSLA). SpaceX will be his second public company, and, if the IPO goes off as planned, the second of Musk’s companies to find a spot in the top ten largest stocks listed on the US markets.
Given this fact, it’s not hard to see why some are speculating that this IPO could well make Elon Musk the world’s first trillionaire.
However, Musk is a divisive figure for a multitude of reasons. Not all Australians would relish the chance to own shares of one of his companies. Unfortunately for those investors, we may not have a choice.
As we’ve already touched on, SpaceX looks destined to become one of the largest public companies in the world when it IPOs. The company is aiming for a market capitalisation of US$2.5 trillion. If hit, that would put it as the USA’s sixth-largest public company, right between Amazon.com Inc (NASDAQ: AMZN) and Broadcom Inc (NASDAQ: AVGO).
This fact makes it almost impossible for Australians to avoid having money tied up in SpaceX shares. Let me explain why.
Index funds and super
Firstly, anyone who owns a US-centric ASX exchange-traded fund (ETF) or index fund will own SpaceX shares. Popular ASX ETFs, whether it be the Vanguard MSCI Index International Shares ETF (ASX: VGS), the iShares S&P 500 ETF (ASX: IVV), or the BetaShares Nasdaq 100 ETF (ASX: NDQ), will all have to hold SpaceX as a relatively major holding. So if you own any of these funds, or the myriad of ETFs that offer exposure to the US markets, a slice of SpaceX stock will indirectly arrive in your brokerage account soon after the IPO fires off.
But even Australians who don’t own an international index fund or ETF will likely be exposed to SpaceX shares.
That’s because the vast majority of our superannuation funds allocate a large chunk of your money for investment in international shares. The US markets typically occupy a large chunk of that allocation, and typically include the market’s largest companies. Of which SpaceX looks likely to join the ranks.
As such, for better or worse, it seems none of us will be able to avoid an investment in SpaceX when the company goes public. Hopefully it works in our favour.
The post Don’t want to buy SpaceX shares? You may not have a choice appeared first on The Motley Fool Australia.
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Motley Fool contributor Sebastian Bowen has positions in Amazon. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon, BetaShares Nasdaq 100 ETF, Broadcom, Tesla, and iShares S&P 500 ETF. The Motley Fool Australia has positions in and has recommended BetaShares Nasdaq 100 ETF. The Motley Fool Australia has recommended Amazon, Vanguard Msci Index International Shares ETF, and iShares S&P 500 ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.