SpaceX Prepares for a Historic Market Launch

**Leanna Byrne** (0:00)
We're t-minus 22 hours till the SpaceX launch, so what can we expect? It's World Business Express from the BBC World Service. I'm Leanna Byrne. Why controversy around the Air India investigation keeps ramping up and a look ahead to the World Cup?
As we've been hearing, Wall Street is counting down the hours until tomorrow when SpaceX will debut in the public markets. So what exactly are the steps to get the biggest IPO on record off the ground? Nicholas Hyatt is lead alternatives analyst at Hargreaves Lansdowne. Nicholas, tell me what the process is, what's the timeline?

**Nicholas Hyatt** (0:41)
Well, all being well, we'll find out how many shares people have been allocated in the early hours of tomorrow morning, UK time. That will depend exactly on how many bids have been put in for shares. Teams around the world, including at Hargreaves Lansdowne, will then be working through the night to allocate those to client portfolios with the goal that they will all be allocated in time for the US market to open tomorrow. When the US market opens, there's then an opening auction. That will determine the price at which the shares trade on the first day, and it's completely normal, it happens every single day.
But given the level of demand, it's worth bearing in mind it might take a couple of hours. But once that's out of the way, clients should be able to trade as usual.

**Leanna Byrne** (1:17)
Very good, Nicholas, you stay right there. Let's talk about pricing, because SpaceX has already set its price at $135 a share, which is actually an unusual move. To explain why, here is Susannah Streeter from the Investment Service Wealth Club.

**Susannah Streeter** (1:31)
That is pretty unusual. There's normally more price discovery going on, whereby you have the company listing, but also it's bankers assessing just how much demand there is in the market. They will arrive at some kind of listing price to ensure that there is enough demand effectively out there. Given the high demand and the hype surrounding SpaceX, this is probably why Elon Musk feels confident that he can say, look, it is $135 per share, take it or leave it, because it is already thought to be very oversubscribed.

**Leanna Byrne** (2:05)
Another unusual thing is SpaceX wants around 30% of the shares to go to retail investors rather than the usual 5-10%. Is this really a first?

**Susannah Streeter** (2:15)
It is quite unusual. Lots of retail investors are often left out of high-profile IPOs, and when they are let in, they only get a teeny allocation. So in many ways, this is very encouraging for retail investors because there's been a big campaign to ensure that they don't miss out and institutional investors don't get the first bite of the cherry. I think one of the reasons is because there is perhaps more skepticism within institutional investors about the longer-term prospects. And actually, Elon Musk wants his army of loyal fans to buy in to ensure that this launch is successful.

**Leanna Byrne** (2:55)
So once trading starts on Friday, Susannah, what will markets be watching most closely and what will you be looking out for?

**Susannah Streeter** (3:01)
I'll be watching to see whether there is this initial pop, which is expected. But then there is likely to be volatility. And actually, we're not really going to see where the share price settled for days, if not weeks, and potentially months. This is because SpaceX isn't just about Elon Musk's extraterrestrial ambitions. It also wraps up his AI ambitions as well, given the XAI is now part of SpaceX. So there's a lot to consider. It isn't just whether Starlink is super successful, which we know it is. It isn't just about his ambitions in space. It's also about the AI juggernaut and just how far it has to run.

**Leanna Byrne** (3:43)
That was Susannah Streeter from Wealth Club. Meanwhile, the European Central Bank has raised interest rates for the first time in almost three years from 2% to 2.25%. Nicholas, is this going to set a precedent for other major central banks, do you think?

**Nicholas Hyatt** (3:56)
I don't think we're going to see a flood of interest rate rises, but there is some speculation that the Bank of Japan might follow suit. That rise to 2.25% might not sound like much, but it is actually quite a symbolically important moment. It's the first time the ECB has raised interest rates since September 2023, and it's a move to curb inflation, which is spiked following the outbreak of the war in Iran. Disruption to oil markets is pushing up energy prices, and the ECB rate setters are clearly worried that that sort of energy price increase is going to seep into the wider economy. In fact, despite raising rates today, they still think interest rates are going to be higher over the next two years, and the market is forecasting another rate rise before the end of the year.