SpaceX Is Now America’s 6th Most Valuable Public Company

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Alex Ossola (0:34)

SpaceX is now America's 6th most valuable company. And that makes Elon Musk officially the world's first trillionaire. Plus, it's a mystery vexing analyst. How has China been able to stop importing millions of barrels of oil since the start of the Iran War?

Rebecca Feng (0:49)

China was able to slash oil imports without visible disruptions to its economy. Cars are still running on the street, people are still traveling, toilet paper is still there. You know, how is this possible?

Alex Ossola (1:00)

It's Friday, June 12th. I'm Alex Ossola for the Wall Street Journal. This is the PM Edition of What's News, the top headlines and business stories that move the world today.

Today, SpaceX made its long-awaited stock market debut. Shares opened trading at $150 around midday, 11% above the IPO price of $135.

And the rocket company stock ended the day up 19% at $160.95. Its market cap is $2.1 trillion, making it America's sixth most valuable company just below Amazon. CEO Elon Musk's other company, Tesla, is now number eight. The IPO gripped Wall Street and transfixed investors worldwide. And it was as near a picture perfect debut as most bankers could imagine, with a pop that was neither too big nor too small. Speaking from Starbase Texas this morning, Musk said that when he began SpaceX more than 20 years ago, he told people that the company was probably going to fail.

Elon Musk (2:06)

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.

Alex Ossola (2:29)

That record IPO also helped Musk become the world's first trillionaire. Of course, Musk was already the world's richest person before the IPO, but a trillionaire is a notch above. WSJ special writer Teo Francis explains how Musk got here.

Teo Francis (2:43)

Late last summer, we estimated that he was worth just a little more than $400 billion. A few weeks ago, we checked back, $811 billion.

And of course, now he's crossed the trillion dollar threshold. Most of that huge increase since last summer is really about SpaceX.

Alex Ossola (3:00)

As of today's market close, Musk's net worth was about $1.2 trillion. Teo says that Musk's money is almost all tied up in his companies, like SpaceX and Tesla.

Teo Francis (3:10)

He's not only the biggest shareholders in these companies, he's also their leader. If you start selling, that could drive the share price down. He can borrow against his holdings to some degree, but ultimately his fortunes are tied up with the fortunes of these companies.

Alex Ossola (3:23)

Speaking of Tesla, it also closed up today, gaining 1.8%.

Stocks rose overall, with the Dow leading the gains and finishing 0.7% higher.

Today, oil prices are around $85 a barrel. That's certainly higher than before the conflict, but nowhere near the $150 to $200 a barrel that many analysts predicted when the Strait of Hormuz effectively closed. There are two main reasons global oil prices aren't higher. The US is exporting more and China is importing less. To better understand the China side of the equation, energy markets reporter Rebecca Feng joins me now from London. Rebecca, this mystery of the 3 million barrels, this is the missing amount of oil that China would normally be importing every day, but now isn't. So, how is China able to avoid importing all this oil?

Rebecca Feng (4:14)

That actually is the mystery.

So yeah, as you said, normally China would import around 11 million barrels a day. But in May, the official data is showing that China only imported 7.8 million barrels a day. It seems to us that China was able to slash oil imports without visible disruptions to its economy, you know, cars are still running on the street, people are still traveling, toilet paper is still there. And China is probably the country that prepared a lot for this exact moment.

Alex Ossola (4:48)

Yeah, how did they do that?

Rebecca Feng (4:49)

It's been stockpiling crude oil for months, if not years, mainly by buying up cheap Russian and Iranian oil. China, for the record, doesn't quite publish its actual stockpiling.

But analysts estimate it to be between 1 to 1.4 billion barrels, which is multiple, multiple months of imports. And then the EV penetration in China is pretty high, it's over 60% by the most recent estimate. So people are able to just consume less gasoline in general. So China actually relies on coal quite a lot for generating electricity. One is part of it, but the other is renewable. So wind, solar, you name it. And China has made it almost like a national priority to really heavily develop this renewable industry.